Civil Legal Services Community Fears Further Declines in Funding

From the December 26th New York Law Journal: "The new budget proposed by Governor David A. Paterson is silent on
spending for civil legal services for the poor, just as a precipitous
drop in resources is coming into focus for 2010 at the Interest on
Lawyer Account Fund. Advocates for civil legal services aid said Mr. Paterson's proposal for
the 2009-10 fiscal year comes at the worst possible time, as demand for
legal services rises due to foreclosures, consumer debt, unemployment
and even domestic violence due to tough economic times."

From the article by Joel Stashenko:

"I've been here for 10 years," said Sean C. Delany, executive director
of the Lawyers Alliance for New York. "This is the worst I've seen it."

Mr. Paterson's proposed $121.1 billion budget for the fiscal year
beginning April 1, 2009, contains scores of new taxes, fees and
cost-cutting initiatives to close projected budget gaps of more than
$15 billion (NYLJ, Dec. 17).

In the 2007-08 fiscal year, the state allocated a record $15.3 million for civil legal services.

That fell to $7.3 million for the current fiscal year, a total that was
reduced by 6 percent during a round of budget cuts ordered by Mr.
Paterson in August. Mr. Delany said the legal services community is
fearing another round of cuts before the end of the current fiscal year.

Jeffrey Gordon, a budget spokesman for Mr. Paterson, said the
administration believes the Interest on Lawyer Account [IOLA] Fund will
provide sufficient resources for civil legal services. He also noted
that the Legislature has traditionally added funding for legal services
above what governors have proposed before lawmakers adopt state budgets.

In 2007, then-Governor Eliot Spitzer announced a regulation change
making banks pay higher interest rates on the client escrow accounts
held by attorneys to benefit the IOLA Fund (NYLJ, June 1, 2007).

"This regulation will ensure that, even during a down economy,
increased funding will be available to support these important
services," Mr. Gordon said.

The IOLA board this month approved grants of $25 million for civil
legal services for 2009, the same amount as it allocated in 2008. The
fund allocated $13.7 million to legal aid societies and other
non-profit community groups the previous year.

Lorna Blake, executive director of IOLA, said it is apparent that the
next round of allocations will be down significantly due to a fall-off
in revenues coming into the fund. Those grants will be based on money
earned in calendar 2009.

"We anticipate that IOLA revenue will be down quite dramatically in
2010," Ms. Blake said Wednesday in an interview. "It could be as
dramatic as a 70 percent decrease. We are hoping that it is not that
bad, but other IOLA states have had 60 and 70 percent decreases."

In past years, the Assembly has come to the rescue in budgets with modest or no civil legal services allocations.

But Assemblywoman Helene Weinstein, D-Brooklyn, said this week she does
not know how much will be available in Assembly funding for civil legal
services with the myriad of other funding obligations Assembly
Democrats will be asked to meet in the tight 2009-10 budget.

 Read the full article by clicking here (free with NYLJ registration).