Office of Education

Credit Enhancement

Achievement District

Funding Public Schools’ Waitlists

"It shouldn't matter what your zip code is - if you're a child in Arizona you deserve our absolute best." - Governor Ducey, January 2015

The Arizona Public Schools Achievement District was created to ensure every child in Arizona, regardless of where they live, has access to a quality public school. The Achievement District aimed to expand and increase access to high-quality public schools statewide for all Arizona students. Arizona has many high-quality public schools. Resources available for the Achievement District  prioritized expansion and replication of our state's top-performing public district and charter schools - schools that are at capacity and have waiting lists – through targeted financial support. Expansion is defined by adding quality seats at existing "A"-rated schools, opening new schools, or partnering with low-performing schools to replicate "A" school practices.

Investing in schools that have effectively leveraged funds towards proven student outcomes and can share their best practices ultimately increased the number of high-quality schools across the state.  The Achievement District will focused on creating partnerships between successful education programs and under-performing schools, allowing "A" schools to provide mentorship and guidance to schools on the path to achieving success. When we see excellence, we should look to understand and replicate that success.

Arizona Public School Credit Enhancement Program

Governor Ducey is committed to broadening access to in-demand high-performing schools for all of Arizona’s K-12 students by helping Arizona’s best public schools replicate and expand. One barrier to expansion is the cost of capital construction. The Arizona Public School Credit Enhancement Program schools' credit ratings on bonds, enabling financing at lower interest rates and lowering borrowing costs.


Public schools commonly issue bonds to finance school construction. The interest rates they pay depend on investors’ assessments of the risks associated with the bonds and vary from school to school.

The Arizona Public School Credit Enhancement Program (Program) reduces borrowing costs by making bonds less risky for investors by ensuring that bonds will be repaid even if a school is not able to make payment. The Program creates an “insurance fund” for the purpose of paying participating public schools’ principal and interest on debt-financings in the event that a school defaults. The State of Arizona is not liable for any school default nor does it have any impact on the State’s credit rating.

The Program is funded at a fixed and limited amount of $100 million -- derived from two sources: a) $20 million previously appropriated for this purpose and b) $80 million from the state treasurer's pool of investments. The $100 million in the Fund will enhance approximately $350 million of bonds issued by public schools’ participating in this program.

Bonds issued by participating schools have been assigned a credit rating of “AA“ by Standard and Poor's, which is higher than the underlying rating that the bonds would secure if they were not in the Program. The savings in interest costs may either serve as a benefit to the taxpayers or be reallocated for school instructional or operational expenses, such as classroom-related expenses or soft capital. 

Eligible schools who wish to finance new construction or refinance existing school construction debt applied to the Credit Enhancement Eligibility Board. The Credit Enhancement Eligibility Board reviewed those applications and approved school program participants. The Governor’s Office of Education will provided administrative support.


To be eligible to participate in the credit enhancement program, schools must be admitted as a member school in the Achievement District. The eligibility criteria include:

  1. The assignment of a letter grade of A, or an equivalent successor classification, pursuant to section 15-241.
  2. Proven instructional strategies and curricula that demonstrate high academic outcomes.
  3. Verifiable enrollment demand, including the placement of prospective pupils on waiting lists.
  4. A sound financial plan that contemplates operational costs and future enrollment growth.
  5. A commitment to provide technical assistance, including business services, curriculum development and teacher training, to an underperforming school in the state.


The Credit Enhancement Eligibility Board (Board) is comprised of the Governor, Treasurer and the Director of the Arizona Department of Administration. The decision to accept or reject a school’s application for the program is made by the Board. The Board designed an application form and process based on the general guidelines and requirements established in law. The Board used various metrics to evaluate applicants, including:

  • Membership in the Achievement District (see above).
  • Applicant’s financial position, including evaluation of financial metrics such as day’s cash on hand, debt service ratio, etc.
  • Terms of the proposed financing.
  • Whether the financing has a fully funded debt service reserve fund (charter schools are required to have a debt service reserve fund to be able to sell bonds)
  • Value of property pledged as collateral.
  • Impact of the proposed financing on the overall enhancement fund leverage ratio (maximum leverage ratio of 3.5:1 and no more than 25 percent of enhanced financings in aggregate may have an underlying credit quality of less than BB-)

Additionally, charter schools are required to pay an annual participation fee equal to or at least .25% of the school’s total outstanding principal that is enhanced through the Program. Participation fees are set by the Board.


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1700 W. Washington St, Suite 503
Phoenix, AZ 85007


Kaitlin Harrier
Director and Education Policy Advisor

Office Hours: Monday - Friday, 8 AM - 5 PM