A conservative law firm has questioned the legality of a mortgage assistance program announced last year by Gov. Tony Evers — challenging the program’s intention to steer federal funds toward people of color as discriminatory.
The Democratic governor announced the Wisconsin Help for Homeowners program in August. It’s set to provide about $92.7 million in federal American Rescue Plan Act funds to eligible homeowners across the state. The program is intended to help mitigate financial hardships associated with the ongoing COVID-19 pandemic by preventing mortgage delinquencies, defaults, foreclosures and loss of utilities and energy services.
The federal government directs states to provide the grants to homeowners with incomes equal to or less than 100% of the area median income for their household size. However, states can increase the income eligibility pool to those earning 150% of the area median income if funding is allocated to “socially disadvantaged” individuals, which is defined by the federal government as Black Americans, Hispanic Americans, Native Americans, and Asian Americans and Pacific Islanders. Other individuals would be ineligible.
The Wisconsin Institute for Law and Liberty, a nonprofit conservative law firm founded in 2011, sent a letter to Evers Wednesday claiming that the state’s plan to follow federal guidelines would be illegal under the U.S. and state constitutions.
WILL has previously challenged the federal government’s reasoning for allocating federal funds based on race to help end systemic racism.
“The government cannot condition benefits and assistance based on race,” WILL president and general counsel Rick Esenberg said in a statement. “Governor Evers should make clear that Wisconsin’s housing assistance grants will not discriminate on the basis of skin color.”
The state Department of Administration estimated there are more than 914,000 Wisconsin households earning between 100% and 150% of the area median income, according to the letter from WILL. Almost 60,900 of those households meet the federal government’s definition of “socially disadvantaged,” while the remaining more than 850,000 households are white.
Esenberg has urged Evers to postpone the implementation of the housing assistance program to review and remove any racial classifications. Evers’ office did not respond to a request for comment Wednesday.
The latest challenge by WILL follows two previous efforts by the group to prevent the state from allocating federal coronavirus funds based on race.
A handful of business owners last year successfully challenged the U.S. Small Business Administration’s prioritization of businesses owned by women, veterans and socially disadvantaged individuals when allocating $28.6 billion in Restaurant Revitalization Fund grants.
The business owners alleged in the lawsuits, one of which was filed by WILL, that the policy pushed white men “to the back of the line” for aid.
A federal appeals court ultimately ruled in favor of WILL, issuing a 2-1 opinion that said the government cannot allocate limited coronavirus relief funds based on race and sex. As a result, SBA notified 2,965 business owners who had originally been approved for grants that those funds would now be denied and the application process shifted to a first-come, first-serve basis.
Another lawsuit brought forward last year by WILL on behalf of a handful of residents in several states including Wisconsin challenged President Joe Biden’s plans to allocate $4 billion to more than 20,000 Wisconsin farmers.
The lawsuit alleged the Biden administration was engaging in unconstitutional race discrimination through a provision in the American Rescue Plan to provide debt relief to “socially disadvantaged” farmers and ranchers. A temporary restraining order was granted last June.
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