South Carolina Republicans Propose Using Foreclosure Fraud Settlement Funds For Corporate Tax Breaks

Several states are planning to spend their share of the $25 billion foreclosure fraud settlement brokered with the nation’s biggest banks on things other than helping homeowners, even though the point of the settlement was to address improper foreclosures. Wisconsin, for instance, wants to use the money to plug a hole in its general fund; Georgia wants to bolster its rainy day fund; Ohio plans to use some of the money to demolish vacant homes; and several other states have proposed using the funds on everything from education to “inflation expenses.”

But South Carolina may take the cake in the quest for the most ridiculous perversion of the settlement, as its GOP-controlled state House voted to use the money for corporate tax incentives. The state’s Republican attorney general, Alan Wilson, would also like to spend the money on a slew of programs, including “to help pay for the state’s lawsuit to block the expansion of the Savannah River port in Georgia”:

South Carolina Attorney General Alan Wilson wants the state’s portion of a $25 billion mortgage fraud settlement to go to shelters for battered women and homeless military veterans, and to help pay for the state’s lawsuit to block the expansion of the Savannah River port in Georgia.

Last week, House Republicans voted to give South Carolina’s portion of the settlement – about $31 million – to the state Commerce Department to create incentives for companies to locate in the Palmetto State. Democrats vainly argued the money should be used to help people who have lost their homes to foreclosure.

Wilson, a Republican, told House Democrats Tuesday that while the settlement gives him “a lot of discretion” in how the money is spent, he thinks the state Legislature should decide.

Some of these suggestions — like shelters for women or aiding homeless veterans — are surely good ideas. But the foreclosure settlement money is simply not intended for them. And it certainly is not meant for states to throw tax incentives at corporations or to pay for lawsuits entirely unrelated to anything about housing.

State Rep. Gary Simrill (R), said that using the foreclosure fraud settlement on corporate tax incentives is legitimate because it “has an exponential impact … that it is going to bring in jobs.” “[Commerce Secretary Bobby Hitt] tells us he needs help. He needs to be able to bring the fish into the boat. We want jobs. We need jobs,” Simrill added. And evidently those in the state hoping for some housing help will just have to look elsewhere.