The title says it all. Nationwide, legal aid funding has suffered mightily since the recession. According to the American Bar Association’s Commission on Interest on Lawyers’ Trust Accounts, interest paid on lawyers’ trust accounts, which is used to help fund agencies providing civil legal services to the poverty population, has dropped from $371.2 million in 2007 to $75.2 million in 2014. At the same time, the number of people qualifying for such services has risen from 37.3 million to 46.7 million.
Connecticut is no different. In 2007, IOLTA generated revenue of nearly $20.8 million. The real estate market was active and the average interest rate being paid by the commercial banks at the time was 1.5 percent. By 2014, IOLTA revenue totaled less than 10 percent of the 2007 amount, or just over $2 million. The average interest rate was 0.23 percent. Meanwhile, Connecticut’s poverty population grew from 268,880 (7.9 percent of the population) to 374,772 in 2014 (10.8 percent). Not surprisingly, the legal needs of those people increased significantly during this period, making it even more crucial that low-income families and individuals get help securing their most basic human needs: food, shelter, health care and employment. Providing critically needed legal representation for such individuals during tough economic times helps stabilize communities by making sure families are protected against loss of homes, jobs, and government benefits and children are able to attend school without interruption. Yet, for far too many, getting legal help to protect these needs goes unmet. For fiscal year 2013-14, legal aid providers estimate that 300,000 eligible low-income Connecticut households were denied legal services due to significant staff reductions caused by the sudden and significant loss of IOLTA revenue and the inability of these individuals to afford private lawyers.
