Civil legal service fund go unchanged in gov’s budget amendments
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Governor Kathy Hochul did not include a $25 million increase to the Interest on Lawyer Account Fund that advocates said is needed to maintain operations in her latest budget proposal . Photo by Darren McGee/Office of Governor Kathy Hochul
By Noah Powelson
Despite bar associations and legal organizations across the state urging the governor to expand a public fund for civil legal services, the governor made no changes to the budget item in the slate of amendments to her proposed financial plan released last week.
Governor Kathy Hochul did not include the additional $25 million allocation requested by the Interest on Lawyer Account Fund, otherwise known as the IOLA Fund, in her 30-day amendments to the 2027 proposed executive budget released on Thursday.
IOLA had requested $102.5 million spending authority for their public legal fund that provides grant funding to legal nonprofits, but would receive only $77.5 million in the governor’s proposal. While still the largest spending authority IOLA has received, the $25 million gap means the fund will not have the money to account for the volume of legal organizations seeking grants during the current bidding cycle.
Even though legal aid organizations warned staff and service cuts could come unless more funding is appropriated, IOLA was untouched in the budget amendments.
The lack of further funding came as a disappointment to the over 130 legal organizations and individuals who signed an open letter to the governor urging the further spending authority, including the New York Legal Assistance Group, Brooklyn Defender Services, the Legal Aid Society and the Queens County Bar Association.
The day before Hochul released her 30-day amendments, QCBA’s Board of Managers released a statement echoing calls to fund IOLA, which they say has a critical role in ensuring civil legal service coverage in the World’s Borough.
“Queens is one of the most diverse counties in the country and has a significant vulnerable population that relies on legal aid and civil legal services to secure justice,” QCBA said in a statement. “The IOLA Fund’s ability to award and distribute grants to legal aid programs is an essential safeguard for those in need, including immigrants, low-income seniors, victims of domestic violence and others.”
The day after the amendments were released, QCBA President Kristen Dubowski-Barba told the Eagle the governor’s decision was disappointing.
“We are disappointed the governor didn’t do the right thing to protect low-income individuals and families across New York State,” Dubowski-Barba told the Eagle. “We will continue to advocate for the restoration of the IOLA Fund’s full spending authority and call on the legislature and governor to commit to restoring it during budget negotiations.”
QCBA’s disappointment was shared by the Legal Aid Society, who said the lack of full funding authority puts many contracts between IOLA and legal aid services organizations at risk.
“Full spending authority for the IOLA Fund is critical to the stability of New York’s civil legal services system, especially amid unprecedented demand,” Adriene Holder, chief attorney of the Civil Practice at The Legal Aid Society, said in a statement. “Without full authority, the State risks breaking multiyear commitments and undermining the legal services safety net for low-income New Yorkers.”
The IOLA Fund is not taxpayer sourced – the money comes from interest rates on attorney escrow accounts and is held for the express purpose of providing grants to civil legal services for low-income New Yorkers.
IOLA is currently in the second year of a five-year contract grant cycle, when legal service organizations bid for grant awards that are used to pay for staff and services.
Hochul has more than doubled IOLA spending since she took office, but advocates say it’s not enough for organizations reliant on the fund to maintain staff levels and further develop programs and training.
While the news is disappointing for many legal services providers, advocates said they will continue to call for further IOLA funding as budget negotiations in Albany continue.
“Governor Hochul will continue to negotiate in good faith with the state legislature to deliver a budget that makes New York State safer and more affordable,” a spokesperson for the governor’s office said.
The New York Legal Assistance Coalition also said public funds like the IOLA Fund are one of the few ways low-income New Yorkers can receive representation in their legal cases.
If IOLA cuts back on grant awards because the demand outpaces the resources available from the currently available spending authority, NYLAG said the consequences would just be more than just staff cuts. Legal services provided, including for cases around housing, domestic abuse or immigration, could see serious disruptions as legal organizations have to cut back on staff and programs.
“Without stable IOLA funding, low-income New Yorkers will be left to navigate life-altering legal crises alone,” a spokesperson for NYLAC said in a statement. “IOLA is now in the second year of a carefully structured five-year contracting process designed to provide predictability and strengthen services statewide. Failure to provide full spending authority will force cuts to contracts already awarded, resulting in job losses, fewer services, and disruption to long-planned system improvements.”
Abja Midha, the executive director of the legal non-profit Volunteers of Legal Services, said their organization also relies on IOLA grant funding to maintain their services. VOLS operates in all five boroughs, and works to find pro bono volunteers from private law firms to meet legal service needs.
For groups like VOLS, the IOLA Fund not only provides money but stability, Midha said. Legal services groups carefully plan their programs and expenditures around the fund, and if any funding is put into question, it risks putting the entire organization’s plan in jeopardy.
"We're very much counting on this money for this next fiscal year," Midha told the Eagle. "Without full funding we're going to have to go back to the drawing board on how we will maintain service levels."
