Republican lawmakers are moving to use state funds to help privately-run charter schools borrow money at better interest rates.

Daniel Scarpinato, press aide to Gov. Doug Ducey, said his boss wants to ensure there is space for students in the most in-demand public schools in the state.

"He believes that our best schools, our best public schools in the state should have the ability to expand so they can offer a great education to more students right now," Scarpinato said.

The plan would set aside $100 million that the state would pledge to make payments on loans if the schools defaulted, a guarantee that should result in lenders demanding lower interest rates.

Legislative budget staffers say it's mostly charter schools that would benefit as traditional public schools already have a guarantee with taxpayers.

Sen. Steve Farley noted the Arizona Constitution bars the state from lending its credit to private firms and House Minority Leader Eric Meyer sees another problem: Nothing requires the borrowed money to actually be used to build more high-quality schools.

"All the dollars could be used to refinance existing bonds, lower the interest rate on those bonds and increase profits for the corporations that own charter schools," Meyer said.

The plan was approved by the Senate Appropriations Committee on a party-line vote.