A bill to raise funds for legal aid with a $1 court filing fee surcharge will run tomorrow in the Pennsylvania House, according to the office of the bill's sponsor Rep. Tarah Toohill. Hopefully, the increase will tide over struggling legal aid organizations; it should raise $2.48 million, a 24 percent increase from the current budget.
A major source of funding for legal aid, the Interest on Lawyers Trust Accounts, has all but evaporated during the recession. IOLTA draws from interest on fees or assets held in the short term by lawyers, and funds pro bono counseling and other legal aid services.
But since IOLTA revenue depends on the interest rate, its yield also crashed with the economy. Since 2007, yearly revenues from IOLTA in Pennsylvania have decreased from $12 million to $3 million. Legal aid providers have drastically downsized. Executive director of Community Legal Services Catherine Carr said she faces a $2 million budget gap this year, half of which corresponds to losses in IOLTA funding.
As a result, legal aid organizations are serving less people. According to Executive Director of the Pennsylvania Legal Aid Network, Inc., Sam Milkes, members of PLAN now have to turn down about half of potential clients. At Community Legal Services, this means turning down people who are threatened with losing running water or electricity to prioritize those who have already lost their utilities.
At the same time, the recession is sending people in droves to legal aid organizations. “There are many families that would have been middle class and not eligible for services only a few years ago,” said Milkes. And more families now need assistance to fight off foreclosure, like Anthony and Denise Bellita, who testified at a Senate Judiciary Committee hearing held by Sen. Stewart Greenleaf in May that addressed the necessity of legal aid in Pennsylvania.
After Denise Bellita had a heart attack, the family was temporarily unable to pay their mortgage because of medical bills. When they did file for a Homeowners' Emergency Mortgage Assistance Program loan, the mortgage company illegally refused their money and filed a foreclosure action. They turned to Legal Aid of Southeastern Pennsylvania for counseling, and now their foreclosure fees and loan interest rates are under review. If they had lost their house, Bellita said, the family would have had nowhere else to go. “I don’t have a credit card to get a hotel or motel,” she said. “I probably would have been one of those homeless people.”
The $1 court filing fees surcharge could help in the short run. But it will not make up for lost IOLTA funds, according to Milkes. Legal aid deserves a durable source of funding that isn’t contingent on the economy. It's an essential public service that guarantees “meaningful and equal access to our justice system."
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