Legal Aid's Chief Attorney Praises IOLA Bailout, Calling the Need for Civil Legal Services Dire During this Economic Downturn

Steven Banks, the Attorney-in-Chief of The Legal Aid Society, said the proposed $15 million allocation for the Interest on Lawyer Accounts Fund in the Office of Court Administration's budget has prevented every legal services program in the State from severely cutting back on civil legal services to the neediest New Yorkers.

Without the commitment of funding in the Judiciary's budget, Banks said, the Society would have started to scale back on the services it offered to civil legal clients beginning next month. "In the absence of these dollars to bail out the fund in the judiciary's budget, that would have begun at the Legal Aid Society and literally across the state just as the greatest economic downturn since the Depression has made civil legal services more needed than ever." Currently, The Legal Aid Society is able to help only one out of every nine New Yorkers who seek our help with civil legal problems because of the lack of resources. The need for civil legal services is crucial. Homelessness, for example, is at record levels in New York City, and unemployment, hunger, and foreclosures are on the rise.

The IOLA Fund has allocated $25 million in annual funding for civil legal services programs across the State, including $4.5 million in annual funding for our Civil Practice. Because of the dramatic drop in interest rates and economic activity due to the severe economic downturn, the IOLA Fund has suffered a devastating drop in revenue. As a result, we have been expecting a cut of as much as 90 percent in our $4.5 million IOLA grant after April 1, 2010. The proposed $15 million allocation to IOLA in the proposed OCA budget will make the IOLA Fund whole for one year during April 1, 2010 - March 31, 2011.


New York Law Journal
December 3, 2009
Judiciary Budget Projects Rise in Spending
By Joel Stashenko

ALBANY - Citing an inexorable rise in new court filings and unavoidable increases in pension, wage and benefit payments for employees, state court administrators are asking Governor David A. Paterson and the Legislature for a 7.4 percent increase in the judiciary's budget for the fiscal year beginning April 1, 2010.

Though lawmakers and the governor have largely adopted the judiciary's spending plans as proposed in recent years, the state's budgetary woes could increase pressure for tighter scrutiny of spending by the courts.

After weeks of wrangling, legislators completed adoption yesterday of some $2.8 billion in cuts in a "deficit reduction plan" Mr. Paterson said was needed to ensure that the state can pay its bills in the coming weeks without borrowing. The governor, who has projected a budget gap of $10 billion or more for the 2010-11 fiscal year, said lawmakers did not go as far as they should have, but that their cuts helped.

Court administrators are proposing to spend $2.44 billion in state tax dollars in fiscal 2010-11, about $168 million more than the current figure.

In a summary of the spending proposal delivered to the governor and Legislature late Tuesday, administrators said they are unable to keep spending for the courts at $2.27 billion for another year after holding the line on spending in the current year.

"There are no discretionary programs to cut and no nonessential initiatives to defer," judicial administrators said.

And they argued that the consequences of not providing additional funding would be severe.

"Reducing the budget request to accommodate the mandatory cost increases facing the Judiciary would deprive the courts of the resources essential to meet their constitutional duty to the people of New York," the executive summary said.

Chief Administrative Judge Ann Pfau (See Profile) said that virtually all of the $168 million in requested increased spending would go for mandated, personnel-related costs.

"From a real operational perspective, this is a zero growth budget because all of the growth in there, except for the one quarter of 1 percent for the judges who haven't gotten raises in more than a decade, everything else is labor," Judge Pfau said. "So the ability to handle the new cases, the record level of filings, is still going to be contained within a zero-growth budget."

Administrators estimate that filings in New York courts would exceed 4.7 million in 2009, up from 4.5 million in 2007.

They said the increases have been especially high in Family Court, where the current caseload is 16 percent higher now than in 2005, and in civil parts in Supreme Court due largely to a doubling of foreclosure cases since 2005.

The Legislature has imposed a number of mandates on both Family Court and those handling foreclosure cases, including mandatory pre-foreclosure court conferences and the issuing of orders of protection by Family Court to people who have been threatened by non-married partners.

Judge Pfau said the only discretionary increase was $6.3 million requested to expand the Judicial Supplemental Support Fund, which helps judges pay for life insurance, medical coverage, robes, judicial license plates and other expenses.

Chief Judge Jonathan Lippman announced in October that the accounts would be doubled, to $10,000 from up to $5,000 per judge in the fiscal year beginning April 1, 2010 (NYLJ, Oct. 15). Court administrators justify the payments by the fact that judges have gone 11 years without a pay raise.

The chairwoman of the Assembly's Judiciary Committee, Brooklyn Democrat Helene Weinstein, acknowledged that the percentage increase requested by the judiciary will probably be criticized by some of her colleagues, but she defended the spending plan as necessary to help the courts meet growing caseloads and legislative mandates.

"I think some people who would not be familiar with what makes up the main component of the judiciary budget might have almost a knee-jerk kind of a reaction to the increase," Ms. Weinstein said yesterday in an interview. "But when you focus on the fact that the judiciary, the court system, has been so overwhelmed in these past few years…and you look below the raw numbers, it is clearly justified."

Another lawmaker said he would argue that the proposed increase should prompt the Legislature to more closely question spending by the judiciary.

William Parment, a Democrat from Jamestown, Chautauqua County, said he had to call the president of his local community college to explain state budget cuts totaling $130 for each full-time student.

"But there was no reduction at all by the judiciary, not even a token reduction," said Mr. Parment, a 27-year veteran of the Assembly who sits on its Ways and Means Committee. "To say that you couldn't find even a small amount of money to reduce in the judiciary on a budget that size? I just don't think that we [legislators] are doing our job in being good stewards of the public's funds."

Mr. Paterson must submit the judiciary proposal to the Legislature without change when he makes his own 2010-11 budget proposal. But he is free to critique the courts' spending plan. Moreover, the governor and lawmakers are free to make cuts in the final budget that they adopt.

Mr. Paterson's office had no comment yesterday on the judiciary's budget proposal.

Mandated Contributions

Of the $168 million budget increase requested by the courts, Judge Pfau said $84.6 million would go to increased contributions to pensions. Pension contributions by all government employers have soared with the state pension fund's heavy losses due to the slump in the stock market.

Judge Pfau said pension payments for state agencies are made centrally in state government and do not end up on the balance sheets of individual agencies, like they do on the court system's books.

Another $58.6 million would go for salary increases contained in collective bargaining agreements with non-judicial court employees. Most unionized court employees are in line for a 4 percent raise for the year ending on March 31, 2011.

The judiciary's budget, for a fifth straight year, contains a proposed pay raise for state judges retroactive to April 1, 2005. The raise would bring pay scales for Supreme Court justices in line with those for U.S. district court judges, with other state-paid judges receiving proportionally sized raises.

The governor and lawmakers have removed the increase from the budget in the last four years, but Judge Lippman has insisted he is still lobbying for higher salaries, despite the state's fiscal woes (NYLJ, Aug. 3).

The budget also requests $10 million more to meet the costs associated with the beginning of a phase-in of caseload caps for counsels assigned to defend poor criminal defendants in New York City (NYLJ, April 6).

Judge Pfau is to promulgate rules setting the case load caps by April 1, 2010.

The court system is also requesting $4.1 million to pay for the final phase-in of caseload caps for attorneys for children ordered by the Legislature in 2007.

The budget plan does not contain proposals to add more Family Court judges, but Ms. Weinstein said she intends to push a plan to create 21 new judgeships during discussions over the 2010-11 budget in the coming months. The plan has passed the Senate and is supported by Judge Lippman (NYLJ, Sept. 14).

Judge Pfau said a series of cost-saving measures by the court system, some begun more than a year ago, would continue in the new judiciary budget. They include an administrative hiring freeze, tight controls on overtime and bans on all non-essential travel and equipment purchases.

Court officials estimated that cost-cutting programs will save at least $30 million in the next fiscal year. The measures include nearly $3 million in projected reductions in overtime, which the court system estimates to be about $37.9 million, including savings, in both the current and next fiscal years. They also estimate saving $15 million through personnel reductions of about 200 positions as of April 2010. There are about 16,000 non-judicial staff.

There are no layoffs projected in the budget. The personnel cuts include 144 court employees who this summer accepted $20,000 payments and agreed to leave the state payroll (NYLJ, Aug. 14).

IOLA Bailout

The judiciary's budget also includes a $15 million allocation for the Interest on Lawyer Accounts Fund to make up for a projected funding gap (NYLJ, Aug. 18). Income at the fund, which provides civil legal services for the indigent, has suffered due to low interest rates and a drop-off in the real estate industry.

The fund is projecting that it will take in $8 million next year, or about one-third of its average income in 2008 and 2009.

The income comes through interest payments on accounts lawyers hold in escrow for clients.

Steven Banks, attorney-in-chief of the Legal Aid Society of New York, said yesterday the civil legal services allocation was the product of negotiations between Mr. Paterson's office, the Legislature and the judiciary and gives certainty to providers facing unprecedented demand for their services due to the economic downturn.

Without the commitment of funding in the judiciary's budget, Mr. Banks said the Legal Aid Society would have started to scale back on the services it offered to civil legal clients beginning next month. The group has about 32,000 civil legal clients each year and receives about $4.5 million from IOLA.

"In the absence of these dollars to bail out the fund in the judiciary's budget, that would have begun at the Legal Aid Society and literally across the state just as the greatest economic downturn since the Depression has made civil legal services more needed than ever," Mr. Banks said.

Total spending in the proposed judiciary budget, a figure that includes both the general fund and federal aid, is projected at $2.7 billion. That is an increase of $183.5 million.