Legal Services Face Drastic Cuts

July 8, 2011

Yesterday, a House subcommittee cleared a bill that would reduce federal funding for civil legal services for the poor to its lowest level in more than a decade. The House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies reported out of committee a proposal to cut the budget of the Legal Services Corporation (LSC), which funds 136 non-profit civil legal aid providers around the country, by a staggering 26 percent, or $104 million. 

Under the proposal, funding would be reduced to $300 million, the same level of funding in 1999, without adjusting for inflation. The proposed cuts, which await approval by the full Appropriations Committee next week, would severely hamper the ability of already strained legal aid providers to represent low-income Americans in civil cases such as mortgage foreclosure, eviction, domestic violence, and child custody. These service cuts occur at a time when legal aid providers are already stretched thin— for every client served, one eligible client is also turned away due to lack of resources.

Federal support for civil legal aid is crucial. The 136 providers who rely on LSC for some portion of their organizational budgets have seen other sources of funding shrink dramatically in recent years, while demand for services has increased. Interest pooled from lawyers’ trust accounts, or IOLTA, which have historically constituted a significant source of private revenue, are at record lows. Legal Services of New Jersey, for example, received $40.2 million from IOLTA accounts in 2007. In 2010, IOLTA-generated income fell nearly 78 percent to $8.9 million. State funding for civil legal aid is also disappearing as legislatures tighten their budgets. This Brennan Center state-by-state overview details the funding cutbacks under which civil legal aid providers are forced to operate while demand for services continues to rise.

These proposed cuts come at a time when an increasing number of Americans are struggling financially, relying on LSC programs to address their legal needs.  A record 63 million Americans are now eligible for LSC services. According to LSC data, from 2009 to 2010, foreclosure cases increased 20 percent at LSC-funded programs, unemployment compensation cases increased 10.5 percent, landlord-tenant disputes increased 7.7 percent, bankruptcy, debt relief, and consumer finance cases increased 5 percent, and domestic violence cases increased 5 percent. Providers have struggled to meet this rising demand, and have been forced to turn away eligible clients (whose legal needs are likely to go unmet). According to LSC’s preliminary estimates, about 235,000 low-income Americans eligible for civil legal assistance at LSC-funded programs would be turned away if the proposed cuts were enacted.

Congressional members in both parties recognize the importance of civil legal aid for the fair administration of justice for low-income Americans. Earlier this year, Republicans and Democrats voted down a proposal to eliminate all LSC program funding, citing the importance of civil legal aid to the livelihoods of so many Americans in rural districts and low-income communities. The proposed budget for LSC threatens the integrity and the efficiency of our justice system, while saving the federal government relatively little money. Congressional leaders must reverse these proposed cuts and restore full funding for legal aid.