This article from the Baltimore Sun discusses Maryland’s decision to not use funds from the National Mortgage Settlement to plug holes in the state’s budget , but to reserve the funds for there intended purposes. HUD Secretary Shaun Donovan commented on Baltimore’s decision and criticized other state’s proposed use of the money.
“The settlement makes very clear that the intention of this funding is to be used to help homeowners stay in their homes, to help communities recover, and yet we have attorneys general in some states, governors in some states, legislatures, that are trying to divert this funding away from the intended purpose to fill gaps in state budgets,” Shaun Donovan said.
He pointed to Virginia as an example. The commonwealth’s General Assembly — given the right to decide by Virginia’s attorney general — is discussing a plan to send the lion’s share of its $66 million to local governments for education. Officials there said local budgets took a pummeling as the mortgage crisis reduced property-tax collections.