By Eric Kleiman

Making The Case 
For $415 Million

Three hundred twenty-nine million, three hundred thousand dollars. 

$329,300,000.00

It sure does sound like a lot of money. Nine digits, lots of zeroes. It’s almost a third of the way on the road to a billion.

Barring last-second action in the nation’s capital this winter, Congress will approve Legal Services Corporation’s FY 2003 budget at the same level for the third year in a row. This begs the question: What does $329.3 million buy these days in the civil justice business? The answer: Horrible odds in a real-life game of craps, if you are an American living in poverty. 

The scope of the access crisis facing our civil justice system is profound. To understand it, dust off the old Monopoly set, find a six-sided die, take a roll, and hold your breath. If you’re a low-income victim of domestic violence, a defrauded consumer, an evicted tenant, or a senior denied vital benefits, you can exhale if the dice comes up “6.” A 1, 2, 3, 4, or 5, and – with Uncle Sam’s regrets – you’re on your own.

In the mid-1990s, the American Bar Association conducted a national legal needs survey. It found that were availing themselves of the law’s protection in times of legal crisis. The survey did not canvass those making 12K or even 20K, or else the unmet need surely would have registered even greater. 

In the years since the survey, well over a dozen independent state studies have put the percentage of poor people served between 15 and 20 (odds of a “6” on a dice roll: 16.7 percent). For advocates in the field who’ve dedicated careers to tearing the price tag off our justice system, these are familiar funding realities. However, in Washington, D.C., America’s leaders must grapple with a broader set of realities: Families need health insurance. Seniors need pensions. Children need better schools. America needs securer borders. The world needs to eradicate terrorism. 

In 1996, Congress cut the national legal services budget by a staggering $122 million. Opponents of LSC seized on a small number of controversial cases to paint a picture of a “renegade” agency – a depiction bearing no resemblance to reality. It was a painful time, but we in LSC’s leadership took from it important lessons. Avoid controversy. Forge a bipartisan path. And realize a basic nonprofit truth: Diversify funding sources … or else.

LSC instituted a national campaign to expand client services on a shoestring budget. One of the least popular directives to our grantees was to get serious about local resource development … or else. Many advocates squawked – lawyers want to be lawyers, not fundraisers. But LSC persisted and persistence paid, to the tune of a three-year, $18 million increase in private bar giving and a two-year, $26 million increase in state appropriations. Legal services programs formed new partnerships, tried new approaches, and leveraged their federal investment.

LSC’s budget has been fixed at $329.3 million since FY01. Respecting the Administration’s entreaties to exercise fiscal discipline, the LSC Board has asked for no more than level funding for the last three fiscal years, even though the need for a substantial increase has been compelling. Today, the President recognizes that LSC is “the only resource available to access the justice system … for millions of Americans,” and his leadership has quieted congressional criticism of LSC. 

Which brings us to the lead-up to Fiscal Year 2004, a time when the funding hemorrhaging has stopped in the capital but not in the states. On August 23, the LSC Board of Directors approved a preliminary budget request to Congress of $415 million. Such an increase would return LSC’s budget to the level approved by Congress back in 1994 – when there was more funding and fewer poor people, and still four of five clients went without help. Today, new census data tells us that we have 5.7 percent more Americans living in poverty than we did a decade ago, meaning more than 43 million people qualify for our help.

Who will help them? State budget crises, coupled with dramatic declines in virtually every major non-LSC funding source, have left our fundraisers in the field with nowhere else to turn. Without a federal funding boost in FY04, offices will close and already undermanned staffs will absorb more cutbacks.

Most years, special lawyer’s trust accounts known as IOLTA (Interest on Lawyers Trust Accounts) generate more than $100 million in interest income. But as interest rates plunge below one percent, IOLTA is projected to bring in a small fraction of its usual sum. California, for instance, stands to lose an estimated $3.8 million in IOLTA funding this year alone. Even if interest rates go back up, the prognosis is bleak for a full or speedy recovery for IOLTA.

Other traditional funders of legal aid, such as state legislatures and private foundations, are facing their own crises. State governments will run an aggregate deficit of $58 billion this fiscal year, according to the National Conference of State Legislatures. Foundation giving, meanwhile, has mirrored Wall Street’s slump. America’s 10 biggest foundations reported asset losses of more than $8.3 billion in the first half of 2002. 

The need for a congressional response has never been more urgent. Legal services needs a serious federal funding boost in FY04 … or else the next time we pledge allegiance to the flag, it just might be with liberty and justice for one in six in need.