New Jersey finds way to fund charter school buildings

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Charter and renaissance schools now have a way to support their building projects through a low-interest loan program. Gov. Phil Murphy signed a bill Tuesday approving the funding program.

Harry Lee, president and CEO of the New Jersey Public Charter School Association, called it a “landmark” move because the state never funded charter schools’ capital improvement projects.

“​​This is a huge step in the right direction,” he said. “To have a charter facilities loan program on the books is a major win for students and families in our urban charter schools.”

Over the next decade, $900 million is needed to address the building needs of charter schools, according to a survey by the association.

The state Economic Development Authority will administer the new loan program. The total amount for the fund will be allocated during the budgeting process.

Ultimately, this is a compromise from the original proposal, which sought to give charter and renaissance schools the ability to compete alongside traditional public schools not in School Development Authority or SDA districts for capital improvement projects.

SDA districts are among the poorest in the state. A series of court decisions have charged the state with putting these districts on par with wealthier ones. The original proposal would have created a fund specifically for schools in SDA districts.

The Education Law Center opposed the original proposal. It cited the $7 billion backlog of construction needs in SDA districts. Phone calls seeking comment from the center were not returned.

Loan programs for charter schools are nothing new, according to Robin Lake, director of the Center on Reinventing Public Education at Arizona State University.

“A lot of them are privately provided through nonprofits that exist to support growth in the charter sector,” she said.

While Lake says the program is “a step in the right direction, [she] would not say it’s exactly equitable treatment” because the charter schools are not receiving direct funding, and they would have to pay the money back.

“We don’t ask our district schools to take out loans for buildings,” she said. “Charter schools are taking out the loans based on their pre-existing revenue that’s coming from the state; the per pupil amount. It’s a much smaller pot in which to build a loan.”

She adds that other states have instituted direct funding for charter school buildings or provided access to existing buildings for “a very, very low” rental fee.

Oregon and Pennsylvania are now the only states in the country without any funding measure for charter school buildings.