Despite bar associations and legal organizations across the state urging the governor to expand a public fund for civil legal services, Gov. Kathy Hochul made no changes to the budget item in the slate of amendments to her proposed financial plan released last week.
She 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 requested $102.5 million spending authority for its public legal fund that provides grant funding to legal nonprofits. It would receive only $77.5 million in the governor’s proposal.
While still the largest spending authority allocated to the IOLA, the $25 million gap means the fund will not have enough to cover the volume of legal organizations seeking grants during the current bidding cycle.
Even though legal aid organizations warned of staff and service cuts unless funding increased, IOLA remained untouched in the budget amendments.
That 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.”
QCBA said in a statement that Queens relies on legal aid and civil legal services to secure justice and is significantly vulnerable due to its diverse population. “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 Brooklyn Eagle the governor’s decision was disappointing.
“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,” she told the Eagle.
QCBA’s disappointment was shared by the Legal Aid Society, which 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 grant cycle contract, during which legal service organizations bid for grant awards 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 may be disappointing for many legal services providers, advocates said they will continue to call for further IOLA funding as budget negotiations in Albany continue.
“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 current available resources, New York Legal Assistance Group said the consequences extend beyond 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 nonprofit Volunteers of Legal Services, said their organization also relies on IOLA grant funding to maintain their services. The organization operates in all five boroughs and works to find pro bono volunteers from private law firms to meet legal service needs.
For groups like Volunteers of Legal Services, 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 the entire organization’s plan.
“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.”
