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AG Denn's bank settlement spending plan unlikely to stay intact

Attorney General Matt Denn’s (D) plan to tackle the roots of crime is meeting with more support from community groups, business organizations and nonprofits than from state lawmakers.

Legislators on the Joint Finance Committee commended the proposal, but nearly all of the 12 members said the cash should partially be used for other initiatives or to balance the budget.

Denn’s plan would hire new teachers for low-income elementary schools, bolster substance abuse programs and award grants for after school and summer programs over three years.

Half of it would also go toward increasing affordable housing options and neighborhood revitalization efforts.

The recently sworn in attorney general gave a passionate presentation, urging JFC to act quickly to help stem what has already been a bloody first month of 2015 in Wilmington with 11 homicides already recorded.

That ruffled some lawmakers' feathers.

"I kind of detected a tone in your presentation that if we don't hurry or make a quick decision that something worse will happen," said Rep. James Johnson (D-New Castle). "

Johnson continued, "I don’t feel that we should make a perfunctory decision because of this presentation."

Co-chair Sen. Harris McDowell (D-Wilmington North) and others had concerns about funding those initiatives with one-time money.

“That runs out in three years and then we have to figure out if we have the money to replace it because sometimes if you build something in the budget that runs for two or three years and then runs out, you’ve actually done more harm than good if you can't replace it at that point," said McDowell.

"Is that money going to come out of your office next year?" added Rep. Joe Miro (R-Pike Creek Valley.

Another issue was the amount of money itself.

Sen. Karen Peterson (D-Stanton) made a similar point to one she made last year when then AG Beau Biden presented a plan to spend $19 million in a similar settlement with JPMorgan Chase.

Peterson says she feels like it's too little money to have an actual effect on the problem.

"What concerns me here is that we're scattering a bit of fairy dust here and a bit of fairy dust there and hope that the problem goes away."

Sitting next to her, Sen. Dave Lawson (R-Marydel) wanted to more specifically target crime itself. "We've got a factory fire in Wilmington and I'm afraid we're using a water gun to fight it," he said.

Several public speakers supported the plan during the roughly two-hour hearing – including those who may be able to bid for grants outlined in the proposal – along with the state Chamber of Commerce and community groups.

Denn says he’s willing to make compromises, but potential cuts haven’t been discussed at this point.

“We put it forward as a cohesive whole and people come back to us and say that they want to reduce this portion of that portion, we’ll certainly listen to that. But I don’t think we’ve put a lot of thought into which portions are less important.”

Three legislators – McDowell, Sen. Robert Marshall (D-Wilmington West) and Rep. Bryon Short (D-Brandywine Hundred) – requested specific allocations like improving the Wilmington Boys and Girls Club.

The money comes from multi-state lawsuit settlements with Bank of America and Citigroup that must be spent to help remediate harm caused by the financial crisis.

An additional $25 million settlement with credit-rating agency Standard & Poor's announced earlier this week has no strings attached. Denn told lawmakers the cash could be fully used anywhere in the budget, but said he would also be drafting a spending plan in consultation with the Markell administration and the General Assembly.

JFC took no vote on the issue and did not set a timeline for signing off on any proposal.