Finance panel pushes back vote on $29 million in settlement funds

 

DOVER — Efforts to allocate $29 million in bank settlement funds failed Tuesday when members of the Joint Finance Committee (JFC)were unable to agree on a plan.

After about an hour of discussion, the committee elected to postpone a vote to another day.

The Department of Justice currently holds $29 million in settlement funds gained from Bank of America and Citigroup in 2014 as a result of alleged mortgage-related improprieties. The committee allocated settlement funds to create crime-fighting initiatives in Dover and Wilmington in December and to balance the budget last year.

Under a proposal by Attorney General Matt Denn and modified by the co-chairs of JFC, the state would use about $28.3 million on a variety of initiatives mostly relating to housing.

They include $3.8 million for crime prevention, $7.2 million for the Delaware State Housing Authority to renovate abandoned and blighted homes in low-income areas, and $8 million to provide after-school programs and add resources for students in high-poverty areas.

“This may not identify the previous victims, but there’s a lot of people that don’t have the wherewithal to know to pick up the phone and call and ask for help,” Chairwoman Rep. Melanie George Smith, D-Bear, said.

While every member of JFC who spoke agreed with at least a sizable portion of the proposal, several took issue with individual items.

“I and others have felt very strongly that it should be used to help the people who lost their homes to foreclosure because of the banks’ actions,” said Sen. Karen Peterson, D-Stanton.

She believes the state should work with the New Castle County sheriff’s office to identify those people and provide direct help to them.

But others disagreed.

“I don’t know that we would want to give money to people who lost their mortgage because they had an overpriced beach home and ski chalet,” JFC Chairman Sen. Harris McDowell, D-Wilmington, said.

Sen. Peterson objected to using $200,000 to establish broadband in rural areas of Kent and Sussex counties. Sen. Bruce Ennis, D-Smyrna, called for members to use some of the funds to create a broader coordinated office to oversee manufactured homes and address related issues.

Sen. Dave Lawson, R-Marydel, and Rep. Joseph Miro, R-Pike Creek Valley, both recommended using some money to balance the general budget, a notion Rep. George Smith quickly rejected.

As lawmakers made requests to add or remove items, Rep. J.J. Johnson, D-New Castle, asked for more information on individual proposals.Several JFC members also raised concerns.

“We can use the money here, we can use the money there — all of a sudden now we’re right back where we started,” Sen. Lawson said. “We’ve done a 360 on this and gotten nowhere.”

Following the meeting, Mr. Denn said he supported the proposal crafted by JFC and remained hopeful it would be approved within days.

Sen. McDowell said afterward he was not surprised there was no vote.

“We thought we had a consensus brewing, but apparently we didn’t have enough tea leaves in the pot, so we’ll go and see what has to be done,” he said.

“It is difficult, I think, one of the things that people are missing here is we could get fried if we start giving out lumps of money to people some sheriff thinks might have been wronged and then it turns out that they — 10 percent of them went to Atlantic City with the money, and I’ll just say, not on my watch.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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