Georgia To Spend $100 Million Meant For Helping Homeowners On Corporate Giveaways Instead

Photo by flickr user gilsonrome

Several states have been taking their share of the $25 billion foreclosure fraud settlement that was crafted in February with the nation’s five biggest banks and, instead of using the money for its intended purpose of providing foreclosure relief to troubled homeowners, have used it to bolster other areas of their budgets. Georgia lawmakers, for instance, have been planning to stash nearly $100 million from the settlement into their state’s general fund.

As Kate Little, president of the Georgia State Trade Association of Nonprofit Developers wrote today, that money did indeed wind up in the state’s general budget, where it will be spent on corporate giveaways — economic programs meant to entice companies to move to Georgia — rather than helping homeowners:

According to Georgia’s Attorney General Sam Olens, the state’s Constitution requires such funds to be deposited in the general fund with the General Assembly responsible for determining how to allocate the money.

Gov. Nathan Deal and the General Assembly decided in the waning days of the 2012 session to divide the money between the Regional Economic Business Assistance (REBA) and the OneGeorgia Authority.

That means that none of the funds will go to address foreclosures, even though Georgia has consistently ranked in the top five of states across the country with the highest rates of foreclosure.

Georgia is hardly alone in siphoning off foreclosure settlement funds to plug holes in its budget. But using the money for corporate handouts — which often backfire on a state and lead to a race to the bottom as states attempt to out-do each other in terms of the biggest giveaways — is doubly insulting to homeowners depending on the settlement to provide them with a lifeline.