Wisconsin will use a chunk of its $140 million share of a national settlement over foreclosure and mortgage-servicing abuses to help the state budget rather than assist troubled homeowners, Gov. Scott Walker and state Attorney General J.B. Van Hollen said Thursday.
Walker and Van Hollen said the majority of the settlement amount earmarked to Wisconsin under a $25 billion proposed nationwide agreement announced Thursday still would go to aid consumers in Milwaukee and other communities struggling with the specter of home foreclosure.
But of a $31.6 million payment coming directly to the state government, most of that money - $25.6 million - will go to help close a budget shortfall revealed in newly released state projections. Van Hollen, whose office said he has the legal authority over the money, made the decision in consultation with Walker.
"Just like communities and individuals have been affected, the foreclosure crisis has had an effect on the state of Wisconsin, in terms of unemployment. . . . This will offset that damage done to the state of Wisconsin," Walker said.
And why is there a budget shortfall all of a sudden? Because Walker's budget games have led to a $140 million plus deficit that will require more "emergency" measures to fix. Walker's budget team was projecting a surplus just four months ago. Then reality hit.
A large reason for the change is a $273 million drop in projected tax collections, the memo said.
And now struggling homeowners get shafted again. Walker cannot be kicked out of office fast enough.