Archive for May 29, 2015

Camden Internet provider closes on $4 million state-backed loan

Wireless Internet provider RedZone Wireless announced Thursday it closed on a $4 million loan from Camden National Bank to help with startup costs.

The Finance Authority of Maine in March agreed to guarantee the loan, which means taxpayer funds would be used to repay up to 90 percent if the company defaults.

RedZone, which began a move from Rockland to Camden in January, has said it plans to reach more than 90 percent of the state’s population with 4G LTE wireless broadband service, getting to 25 percent within a year.

With the move, RedZone applied for and received other state incentives under the Pine Tree Development Zone program, allowing the company to recover 80 percent of the payroll taxes that would be paid on income for new employees and qualify for other tax reductions.

FAME said it found the RedZone loan will help create or retain 18 jobs in the near future.

Community justice courts can be an innovative reform

Revamping the municipal courts in St. Louis County and beyond is imperative given the growing public mistrust and the myriad of problems, inequities and inefficiencies. More is at stake with municipal court reform than just changing policies and procedures. Change in Missouri’s municipal court system is crucial in the process of restoring public confidence in government, eliminating civil rights violations, repairing community relations, and ensuring that the judiciary is perceived as independent, transparent, and fair.

How might municipal court reform come about? One option would be for multiple municipalities (such as the 24 municipalities in Normandy school district) to vote to operate a joint, full-time, professional municipal court located in their geographic area, with a full-time judge, prosecutor, bailiff, court administrator who runs the pay docket, and court clerk who documents court records, and possibly defense attorneys and social workers. This would maintain some local control, while providing a professional, full-time court.

Almost inevitably, such a court would be better run, more available to the public, less beholden to outside pressures — and, in the end, less costly and more efficient than the current system of multiple part-time courts, with part-time employees, some with arguable conflicts of interest, that meet a couple of evenings a month.

Or, municipalities could vote to join the existing St. Louis County Municipal Court, which runs three courts on a full-time basis. To encompass all the municipalities would require at least three or four additional courts that could be regionally located, perhaps one in each of the seven St. Louis County Council districts. Unfortunately, it seems unlikely that either of these options will come to fruition.

Meanwhile, the Missouri Supreme Court and the Missouri Legislature have taken important steps. The court took quick action as to the Ferguson Municipal Court and made important rule changes regarding individual’s inability to pay. They are likely to do more to mandate that municipal courts state-wide abide by the Supreme Court Rules.

In a major bipartisan effort, the Legislature has developed comprehensive municipal court reform legislation that addresses concerns about detention, fines for failure to appear, suspension of driver’s licenses, excessive fines and fees, community sentencing alternatives, electronic payment systems, and accessibility of the courts. Among other proposed reforms, the legislation articulates minimum standards for budget keeping, accounting, audits, and police processes, and tightens restrictions on the percentage of a city’s annual general operating revenue that can come from traffic tickets and fines. Although some refinements are needed, this legislation if passed by the General Assembly could go a long way to rebuild public trust in the municipal courts..

After the dust of this legislative session settles, however, the ultimate questions remain: What could true municipal court reform look like? What else could be done to improve public safety, increase trust in government, enhance community relations, and address some of the root causes of disparity, ie, to truly move forward beyond Ferguson?

At this point, the goal has to be more than remediation of the problems, inequities, and inefficiencies. True reform could be accomplished through the development of innovative, problem-solving, community justice, municipal courts that might serve as a model for the rest of the country. A community-based, municipal justice approach would divert low-level offenders facing municipal violations to a community justice center, perhaps starting with a pilot program for youthful offenders from 16 to 18 or 16 to 21.

These community justice courts would include case management and social work services, providing judges and prosecutors with a broad range of alternative sentencing options, such as access to social services, community restitution, community service, and group counseling. These courts would provide citizens with limited legal advice on how to avoid future violations and connect people to organizations that can assist with housing, employment, mental health, and credit counseling needs that not infrequently underlie traffic and other municipal violations.

Following in the footsteps of the innovative and successful Red Hook Community Justice Center and Midtown Community Court in New York, municipal community justice courts could improve access to justice by connecting individuals with the services and community support needed to maintain public safety, diminish the likelihood of future interactions with the court, and improve community engagement. Such courts could be advanced by the Missouri Supreme Court, the Missouri legislature, the Ferguson Commission, or municipalities themselves.

Municipal courts are Missourians’ first — and sometimes their only — impression of the legal system. Increasingly, it is a bad impression. For some, it is the beginning of the poverty-to-prison pipeline. We all have to be worried when a disproportionate number of poor and nonwhite people get caught up in the legal system. We all have to be concerned when the public begins to lose faith in courts, judges, and government. Now is the time for true court reform, true community justice.

Karen Tokarz is professor of law and director of the Negotiation and Dispute Resolution Program at Washington University. Sam Stragand is a third-year legal intern, Civil Rights and Community Justice Clinic, Washington University School of Law.

7 things to know about refinancing credit card debt

By Andrew Housser

Many people find themselves burdened with credit card debt at some point in their lives. It might happen because of unexpected home expenses, large medical bills or because they were caught off guard in an emergency, without a financial cushion. For some people, spending beyond their means left them with big bills. Sometimes, new college grads find themselves owing.

No matter how it happens, the challenge is getting out of debt. The idea of refinancing credit card debt into a fixed, amortizing installment loan might be appealing. How do you know if this option is right for you? Ask yourself these seven questions.

1. Are you juggling multiple payments at varying interest rates?

A personal loan that refinances multiple bills has several advantages. It has just one monthly payment, with one due date and one interest rate, which can relieve the stress of multiple due dates and amounts. For borrowers with fair-to-good credit scores (often in the 600-700 range), it can make sense.

2. Are your credit card interest rates high?

Many credit cards carry interest rates of 15-25 percent. A personal debt refinance loan can lower the total interest rate by 2 to 4 percentage points, which can bring significant savings. For example, if you repaid $10,000 over 60 months at a 20 percent interest rate, you would pay $265 per month. The interest fees you paid would total $5,894. If you could lower the interest rate to 16 percent with a personal loan, over the same 60-month period, you would pay $243 a month and save more than $1,300 in interest expense.

3. Will you be able to pay off your credit cards in a year or less?

If you will be able to repay your existing debt in a year or sooner, you probably do not need to refinance debts with a personal loan. Personal loans usually will charge an origination fee of anywhere between 1 percent and 5 percent of the loan amount, so you will need to take that into account when calculating your overall interest savings. If you anticipate repayment taking longer than a year, you might save considerably on interest fees with a personal loan, even after paying the origination fee.

4. Do you want an achievable schedule for getting out of debt?

Most debt refinance loans are issued for a period of 36 to 60 months (three to five years). These have a set monthly payment and a set timeline for repayment. This means you can anticipate and look forward to when your debt will be paid off (as long as you stick to the payment schedule). Revolving debt, such as credit cards, lets you get away with not paying down your debt, so even if you plan on paying off your credit card debt in three to five years, you may find the payoff date slipping further and further into the future. A personal loan helps promote financial discipline, as the required payments necessitate that you pay down the debt in the allotted timeframe. The value of this behavioral nudge is hard to quantify, but depending on your self-discipline, it may mean that the interest savings from a personal loan will be much greater than the calculation done in No. 2 above.

5. Are you still adding to your debt?

If you are continuing to add to your debt, be careful about applying for a personal loan. If you refinance your debt, but then continue using credit cards, you could wind up with more debt than you began with. Personal debt consolidation loans are best for people who are ready to pay off all debt.

6. Are you unable to qualify for a bank loan?

Following the Great Recession several years ago, many banks and credit unions tightened their lending requirements. As a result, some consumers find it hard to get a personal loan. Fortunately, the marketplace has responded with products to help people whose credit scores might not reflect their repayment capabilities. Companies known as peer-to-peer lenders, as well as other independent lenders, can be helpful. Consider the products offered by lenders such as FreedomPlus, Prosper or Lending Club. Some of these companies use different criteria to evaluate how likely a person is to repay their loan. These different criteria mean it might be possible to obtain a debt refinance loan even if a bank has denied you credit.

7. Are you in serious financial hardship?

If you are in such severe financial hardship that you cannot make minimum payments on your current debt, a loan might not work for you. You also might not qualify for a personal loan. Instead, consider other help, such as debt negotiation (settlement) or credit counseling.

For many people, refinancing credit card debt into a personal installment loan can be a smart decision. It can bring peace of mind, predictable payments, lower total interest costs and confidence that the debt will end. This kind of loan is not the same as debt consolidation with a credit counseling company or other agency. You remain responsible for making payments, and the company does not negotiate with your creditors. The debt solution that is right for you depends on your individual situation.

3 Things People With Bad Credit Need to Know

By Jonathan Roisman,

Its not the end of the world if you have bad credit. Actually, millions of Americans have credit thats rated below average. While its not something you might be proud of, its important to know that there are some ways to make it better. If you have less-than-perfect credit, here are three things you need to know to turn your credit scores around.

1. Your credit wont be bad forever

Its important to know that just because you have bad credit it doesnt mean it will stay that way forever. In fact, with good discipline, youll be able to raise your credit scores over time, earning you better terms on loans and access to premier credit cards. By paying your debts on time (and in full whenever you can), youll climb your way out of having bad credit. The best place to start is to understand what your credit scores and reports look like. Its hard to know how youre doing without checking your financial pulse. A credit report monitoring service can be a great tool to help track your credits progress because many of them will give you access to your credit reports and scores from all three bureaus — Equifax, Experian and TransUnion. Your credit scores are essentially your financial grades, and your reports track your history of making payments, opening new lines of credit and other relevant information. For a small monthly fee — $14.99/month for most services — a credit report monitoring service will also track the activity on your credit reports and alert you when changes are made to a credit report — and in some cases, your scores as well. To sweeten the deal, most of these services also offer some sort of free trial, allowing you to test out the service before you make a financial commitment.

One of our top-rated services is Identity Guard. Itll provide you with your credit reports and scores from the three major credit bureaus immediately after signup, as well as update your reports and scores on a quarterly basis so you can see how youre progressing. It also comes with Credit Analyzer, a tool to estimate how your credit scores might change under certain scenarios, such as paying off a car loan or filing for bankruptcy. Its a great way to estimate your progress and see how fast you can improve your finances. Another bonus is that it comes with comprehensive identity theft protection features to help safeguard your personal information, such as scanning public records and black market websites for the use of your information. Another great option is FreeScoresAndMore. Although it doesnt include all of the identity theft tools that Identity Guard does, FreeScoresAndMore gives you updated credit reports and scores on a monthly basis so that youre always up to date on how youre doing. Visit our credit report monitoring reviews to learn more about these services and see which service will be the best to help you track your credit progress.

2. Getting a credit card wont be easy

If you have bad credit, you shouldnt be thinking about what credit card will offer you the best travel rewards or the most cash back. Your goal should be to rebuild your credit by paying your credit card back on time every month and in full whenever possible. Getting a credit card with bad credit isnt easy, but if youre willing to open a secured credit card, youll be on the right track to rebuild your credit. Secured credit cards look and act as a regular credit card, however the logistics behind them are a little different because they are designed to build your credit. When you open the card, youre required to put down a security deposit. If for some reason youre unable to pay your bill, your deposit will be taken as payment. Although many providers will also charge a monthly or annual fee to keep the secured card open, the benefit is that your payment history will be reported to all three of the major credit bureaus. As long as you make your payments on time with a secured credit card, your score will rise over time, and you will eventually qualify for a regular credit card that doesnt require a security deposit.

Which secured cards are the best?

Searching for a secured credit card can be overwhelming, so weve detailed the top two options here:

The Capital One Secured Mastercard (NextAdvisor advertiser) is a reliable option when trying to rebuild your credit. A $49, $99 or $200 security deposit, assigned to you based on your creditworthiness, grants you a $200 credit line. Unlike other credit cards, the Capital One Secured Mastercard reports your credit history to all three of the major credit bureaus, so be sure to use the card responsibly, as it can easily build up your credit history if you pay your bills back on time and in full, but it can also hurt you if youre careless. To help you track the progress of your credit, the Capital One Secured Mastercard also gives you free access to your TransUnion credit score through its Capital One Credit Tracker. In addition, this card has no annual fee and no foreign transaction fees.

The OpenSky Secured Visa Credit Card (NextAdvisor advertiser) is another good option for those with bad credit. It comes with a slightly lower APR than the above card, and you can put anywhere between $200 and $3,000 into a security deposit to open a line of credit. Your credit history with the card will be reported to the three major credit bureaus, which will help rebuild your credit if you use the card responsibly. Although the card does have a $29 annual fee, it wont charge you any interest on new purchases if the balance is paid in full by the due date each month.

3. Borrowing money will be expensive

One of the biggest downsides to having bad credit is that youre going to get unfavorable loans. From credit cards to mortgages to auto loans, the worse your credit, the higher your interest rates will be. You might not even qualify for a loan at all.

There are options available to you, however. If you need a personal loan, its unlikely a bank will be very helpful, and this could leave you vulnerable to payday loans that come with expensive interest rates. If you prefer to get a loan in a more traditional sense, a credit union may be an option for you, as theyre nonprofit organizations that are owned by the members of the institution. Because of this, they generally offer lower-interest loans and are usually more willing to take on people with poor credit. Another great option for getting a loan is personal lending services. These services cater to individuals with less-than-perfect credit, and some of them even offer peer-to-peer loans, which means your loan is funded by a group of individuals rather than a bank. Although your credit score will be checked to assess your risk, an individual investor is more likely than a financial institution to be more empathetic and give you a loan.

If your credit issues are bad enough that you cant get a personal loan, a credit repair service might be a good option to you. These services work with the credit bureaus to remove errors from your credit reports, as well as help you make progress on raising your credit scores. Some, such as the top-rated Lexington Law, are actual law firms so you can be sure they are operating within the letters of the law.

While having bad credit isnt an ideal situation, its usually only a temporary problem. With the right tools and dedication, youll have your credit scores back up in no time. For more information on how to manage your credit, visit our credit report monitoring blog.

This blog post originally appeared on

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are authors alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. may be compensated through the credit card issuer Affiliate Program.

Financial planning for the freelance worker

The nature of work has been changing — partly as a result of a sluggish economic recovery but also because of evolving expectations for employment, especially among younger adults. Millions of Americans no longer labor in 9-to-5 jobs for a single employer. Many are independent contractors or freelancers, some work for temporary staffing agencies and others hold one or more part-time jobs.

Whatever the case, people who dont have a full-time, permanent position with a single employer face somewhat different financial-planning considerations compared with those who do. Health insurance, retirement plans, taxes, budgeting and saving are some of the key topics. Independent workers might need to take greater responsibility for these areas.

Health insurance is the obvious example. The Affordable Care Act has extended subsidized coverage to millions of people who dont get it through the workplace. Instead, people can buy it through government-supervised marketplaces or exchanges.

The act might even contribute to the rise of independent workers by weakening the link between affordable health insurance and employment. Many small companies, especially those with under 50 full-time workers, might attempt to keep their head counts down (firms with more than 50 workers face penalties if they dont provide coverage). Many workers might be tempted to work for themselves now that their insurance is portable and not dependent on a specific job.

Life insurance is another type of coverage for which independent workers should be thinking. The same holds for disability insurance, which would be nice to have if you suffer an injury or face a medical condition that makes it difficult to work.

Will big brands boost or blemish financial planning?

Can big brands make a success of financial planning and do they really want to?

Both Lloyds Banking Group and Standard Life have recently unveiled plans to launch national financial planning propositions but face questions over whether they are committed to the concept or just using it as a brand.

In April Lloyds announced it had placed its 360 bancassurance, turned private bank, advisers on an eight-day training course on financial planning. It also launched a financial planning tool created by Voyant and customised by Lloyds Bank Private Banking.

In February, when Standard Life announced the acquisition of Pearson Jones and plans to build a national advice offering, managing director Barry O’Dwyer said it intended to a create a professional financial planning firm.

In January 2014 Santander relaunched its investment advice proposition and hired consultant Brian Sweeney, chief executive of the Financial Planning Training Company, to train advisers in financial planning later that year.

Marketing ploy fears

So is it for real or is just a marketing gimmick? Will the support of large companies help to promote the concept of financial planning or will a continued focus on products rather than clients tarnish the brand?

Those at the heart of the financial planning profession are wary of the term being used as a marketing ploy.

Paul Etheridge (pictured above), chief executive of Prestwood Financial Planning and founding member of the Institute of Financial Planning (IFP), said: ‘There are a lot of people who are regarding [using the financial planning label] as an alternative way of selling financial products and that isn’t really what many of us think financial planning should be about.

‘It’s not just another name or label to brand yourself with to get more assets under management. That’s completely missing the point. There is absolutely nothing wrong with firms doing what they’re doing to increase funds under advice but it’s a pity they’re using the same title. What would be wrong with financial adviser or investment adviser instead of financial planner?’

Steve Gazzard, chief executive of the IFP, said the financial planning brand had already suffered as a result of being used by firms that only offered advice.

‘I think the financial planning brand in the UK is massively diluted because there are fundamentally no controls over who uses it and how they use it,’ he said. ‘[Big brands] can’t possibly dilute it more than it already has been.’

Financial planning practise

According to the IFP, financial planning is ‘the ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it’s not just about buying products like a pension or an ISA’.

It requires a six-step process and firms can be audited by the IFP’s accreditation, which recognises businesses that have reached the highest standards in financial planning.

Gazzard said many firms probably thought they were practising proper financial planning, but were falling short of the six-step process (see box below) or inadvertently manipulating it to sell products.

He said many firms made mistakes in establishing the client relationship and engaging the client.

‘If you don’t really establish the relationship with the client properly and ask them really good-quality questions to deeply understand the clients’ wants, it’s very difficult to do financial planning,’ he said.

Sweeney (pictured below), who has helped a number of banks teach advisers about planning, sympathised with the idea that if a firm was not doing full, comprehensive financial planning then it probably should not be using the term financial planning in its branding.

‘Where the real problem lies is that the puritans in the financial services profession – and to be fair to them they have spent a lot of time and resource and gained high-end qualifications – might feel somewhat let down by the sector if [banks and providers] use the term financial planning as a catch-all.’


Big brands explain move

Lloyds and Standard Life both denied they were diluting the financial planning brand, and Standard argued it hoped to help boost it.

O’Dwyer said Standard Life’s advice arm would not push unsuitable products onto clients.

‘If the right advice for a client is to not buy a product, then that’s the advice they will be given,’ he said. ‘It won’t be a situation where every client buys a product from Standard Life, far from it.

‘The advisers we recruit and train will be people that are client focused. We’re not hiring sales people, just professional financial advisers.’

He said it was his ‘core hope’ that Standard Life could put a big brand behind professional financial planning to expand access and awareness among consumers.

Head of pensions policy at Lloyds Bank Private Banking, Richard Anderson, said Lloyds took on the financial planning challenge as a result of the pension reforms, and the idea that it needed to help clients understand their income and expenditure over the long term.

‘We believe holistic financial planning, supported by our cashflow modelling capability, is critical to identify the best outcomes for our clients,’ he said.

Customer service

Anderson said Lloyds had shifted away from sales targets to focusing on adviser training in an effort to embrace financial planning.

‘We have no sales targets and we want to make sure we can recognise colleagues who respond to our clients’ changing financial needs and help clients manage their finances better by delivering outstanding customer service.

‘As a customer-focused business, we expect our colleagues to show knowledge and expertise when helping customers, presenting a range of options to make sure the product or service they receive is the right one for their circumstances.’

A spokeswoman for Santander said: ‘We see financial planning as a service that will often, but not always, lead to a recommendation in relation to products. The essential point is that a clear process must be followed to fully understand the customer’s needs and objectives, then use this information to put a plan in place to help the customer meet those objectives.’


Support and scepticism

Advisers and planners are generally supportive of banks’ and providers’ change in strategy but remain sceptical about whether the changes will take root.

Mike Godfrey (pictured above), director of Southampton-based Cube Financial Planning, said: ‘I don’t think competition is a bad thing. It can raise the standards all around. The good and forward-looking firms will continue to be exactly that because they don’t rest on their laurels.

‘And if the other bigger players start to embrace the principles, that has to be healthy because if more proper financial planning reaches the public, that is better for everybody.’

Potential stumbling blocks

However, Godfrey warned that scale could be a challenge for these firms’ financial planning ambitions, something he has experienced himself. In 2008 he joined Thinc Group, which rebranded as Bluefin, to help build a scaled financial planning firm. The plan did not work out.

‘Building scale in the advice community, with proper financial planning, is extremely difficult,’ he said. ‘That’s one of the things within Bluefin that we found. The problem with larger firms is that to gain scale, you have to commoditise the service proposition and you will always dilute the client experience as a result of that.

‘Smaller firms and niche players can have a much more bespoke approach but are then limited by time factors. There’s always a conflict and it’s going to be hard. No-one’s been able to build a true, professional financial planning model with scale.

‘The challenge boils down to a combination of time, cost and getting recruitment right,’ he said.

‘Getting the individuals you need who have a varied range of abilities, such as experience, tax knowledge and technical knowledge, along with the talent of cementing good client relationships is difficult,’ said Godfrey. ‘Pairing that with the task of keeping them in a large firm once they realise they can probably go out on their own is even harder.’

More than cashflow modelling

Yeovil-based Old Mill Financial Planning, with its 60 employees, is one of the largest firms attempting to secure the IFP’s accredited firm status, which it hopes to achieve in the next 18 months.

Duncan Parkes (pictured below), head of financial planning compliance at the firm, said it took more than just cashflow modelling to become a financial planning firm.

‘Anyone can cashflow model; it’s what you’re cashflow modelling for [that matters],’ he said. ‘If you are using it to grow your clients’ money to keep pace with inflation, that’s not really financial planning. If you’re talking about what their dreams are, how they can achieve them and what resources they have available to do that, that’s more than cashflow modelling.

‘It would take a serious amount of work [for the banks and providers] because they traditionally focus on the sale of products. If [financial planning] is a route they think they can go down, then best of luck to them, but it’s a massive change from where they are currently.’



1. Establish the client’s goals in life – short, medium and long term.

2. Work out what assets and liabilities the client has.

3. Evaluate their current financial position. How close are they to achieving their goals?

4. Develop a plan; create a route map for achieving different goals.

5. Implement the plan: make the changes and make it happen.

6. Monitor and review the plan at least annually and make adjustments when needed.

The Wintrust Business Lunch: Real estate, financial planning, GPS locating …

We open up the show with Dennis Rodkin from Crains Chicago Business with the latest update on the city/suburban real estate news, Chicagos slow recovery and the sewer camera inspection bill. Financial planner Bill Geiger joins us to talk about planning for retirement and ways to protect your money.  CNET Executive Editor Ian Sherr is here for some Tech Talk including GPS on mobile devices and iCloud storage. Kara Carmichael from Choose Chicago lets us in on the social events around Draft Town in Grant Park and James Beard Eats Week.

Fighting For Your Identity: Financial planning before a storm

Planning for severe weather and making emergency kits are always important this time of year. But those kits are often missing some important financial documents.

ABC 33/40 has met people at the Shredding For You events who are getting back on their feet following the April 27, 2011 tornadoes. Some brought boxes of documents to be shredded. They say its important to have a place, like a binder or portable vault, with financial information to grab before a storm.

Financial planning for kids


Teaching young students the value of money and how to save isnt a new idea, but a local foundation wants these lessons learned at a much earlier age. Theyre banking on many happy returns from a much younger generation of students.

According to the financial planning association of northeast Florida, even preschool kids can learn to save a buck.

“At 4 years old whats amazing is kids are able to differentiate between whats something that I want, and something I need. Theyre doing a week’s work of lessons about how to manage your money,” said Martha Cox from Family Foundations.

The teachers at A Bright Beginning agree and say this is an important life lesson the kids can carry with them throughout adulthood.

“Weve been learning this week about saving, income, bank, budgeting. These are the words we are learning. Most of us dont start thinking about saving until adulthood. If you look at whats happening with credit card debt in our country its clear were not learning about money at a young enough age,” said Cox. “These young Rockefellers arent just learning for themselves. They are bringing homework to their families, who also get involved and learn lessons of economics while working together.”

One of the assignments is for the parents to bring in 10 coupons. With this lesson, parents learn how to use coupons while showing their kids how to use them at the same time and how to manage their money.

Family Foundations has over 2,000 kids in local VPK programs priming their piggy banks, and sharing what they learn with their parents.

Charter school funding change wins Senate approval

By Laura Leslie

Raleigh, NC A bill passed by the state Senate on Wednesday would force school districts to share more of their tax funding with charter schools, but critics say it may open the coffers unfairly.

Under current law, charters are entitled to the same per-pupil state and local funding as traditional public schools. But the law offers school districts a list of types of revenue they can put into different funds to keep them out of the pot of money they must divide proportionally between traditional schools and charters.

That law, passed in 2010, allows local school districts to hold nine types of revenue out of the shared pot, which is known as the local current expense fund. One type of funding that can be held out is sales tax revenue that is distributed ad valorem, or according to property value, rather than per capita.

Counties can choose whether to use the ad valorem or the per capita method to distribute local sales tax revenue to cities. If the county uses ad valorem, the school district could hold all of that money out of the shared pot.

Senate Bill 456 would force school districts to share all local tax revenue proportionally by striking the ad valorem exception.

Sponsor Sen. Jerry Tillman, R-Randolph, said the bill puts the funding back where the courts say it should be.

Your ad valorem and sales taxes will go where the kids go, he told the Senate. They’ve been getting about 75 percent of the funding that public school students do.

However, the bill also strikes the laws exceptions for sales tax refunds, gifts and grants restricted as to use, and trust funds. That means donations, from school PTA fundraising dollars to booster revenues for bands or sports teams, would all go into the shared pot unless the school district sets up a separate account for those dollars and unless donors specify that their contribution is for that particular account.

Sen. Mike Woodard, D-Durham, said the change will force districts to give charter schools a share of money that donors intended to go to specific projects at specific traditional schools.

That’s money raised within that school for the purpose of that school, Woodard argued. It opens up funds that were approved by the General Assembly, litigated and upheld by the Court of Appeals, and it’s going to allow these charters to get money for nothing.

Tillman insisted that districts could still set up special accounts for boosters and fundraisers, saying that charters dont want your band booster money.

That will not be touched, he said. We just want a fair share of the money to go where the student is.

The proposal passed on a 35-14 vote. It now goes to the House.