Immigrants facing deportation could lose access to a lawyer as New Haven’s legal aid office wrestles with a sudden $1 million cut.
That loss stems from the current economic meltdown. Legal aid groups throughout the state depend on the real estate market for much of their budgets, through a program that steers them donations from the interest on escrow accounts. The program is called IOLTA, for Interest On Lawyers’ Trust Accounts. The bulk of the program’s money comes from escrow accounts tied to real estate transactions.
Now that the real estate market has tanked, the amount of money available from the program to legal aid groups statewide is dropping some $10 million this coming year, a full 50 percent.
The Connecticut Bar Foundation, which administers the program, broke the bad news to the heads of eight statewide legal aid groups at an emergency meeting last week.
New Haven Legal Assistance Association (NHLAA) learned it will receive $1.3 million from IOLTA in 2009 — down from $2.6 million in 2008.
NHLAA depended on IOLTA money for more than half of its current $4 million budget. Suddenly the agency is faced with cutting close to $1 million from its overall budget.
“This is a crisis for us,” group’s executive director, Pat Kaplan (pictured), said Wednesday. The agency faced dramatic cutbacks twice before, after Ronald Reagan’s election in 1980 and after Republicans gained a majority in Congress in 1994.
Unlike those two times, this emergency has nothing to do with politicians opposed to legal aid lawyers, Kaplan noted. “This is strictly the economy.”
It’s too early to tell where most of the cuts will fall at the unionized agency, which currently employs 20 attorneys, seven paralegals and a social worker. The agency serves about 5,000 people a year who otherwise can’t afford lawyers. Besides helping individuals with divorce or eviction cases or other routine legal matters, the agency has also taken the lead on broader social challenges to the poor, like problems with the state’s health care insurance system for low-income family.
Layoffs now seem inevitable, with the result of fewer people being served. Some attorneys have already offered to take pay cuts, according to Kaplan. Other suggestions floated so far include switching people to four-day or 30 or 35-hour work weeks, with proportional pay cuts. All proposed suggestions will be negotiated with the agency’s two unions representing lawyers and paraprofessionals.
The first casualty was announced Wednesday morning: Renee Redman learned that in early 2009 her job will be eliminated.
Redman came to NHLAA earlier this year to represent immigrants facing deportation. Many immigrants detained by the feds and accused of being the country illegally lack lawyers and end up not knowing how to contest their cases in court.
“Having a lawyer at least allows a person to understand the system and understand if he has a chance of not being deported,” said Redman, a former state ACLU legal director who has practiced immigration law on and off since 1993.
“Immigration law is complicated. It changes a lot. A lot of people are not deportable [under the law] — but it takes a lawyer to figure that out.”
Redman said she’s confident of landing a new job next year, but hopes she can continue to representing detainees.
NHLAA will be able to continue a separate new immigration initiative thanks to a three-year, $150,000 grant it just received from the Community Foundation for Greater New Haven. The grant supports an effort to help immigrant families in the Naugatuck Valley navigate the special education system for their children.
A See Saw
The shock to the statewide legal aid system comes less than two years after an IOLTA bonanza.
A change in the IOLTA rules sent millions of new dollars to legal aid agencies in 2007. Some banks were skimping on the interest they were forwarding on IOLTA cases; they were paying less interest on those accounts than they did on other, similarly sized commercial accounts. Following at least one confrontation at a bank’s annual meeting and a legislative hearing in Hartford, state judges instituted a rule whereby the interest rate had to be comparable.
The extra money produced by the new rule enabled New Haven’s legal aid to hire five new attorneys, including creating Redman’s immigration position.
The money has suddenly dried up for two main reasons: The collapse of the real estate market, in which fewer sales were producing smaller interest-bearing trust accounts; and lowered federal interest rates, which lower interest rates at banks. (The Fed lowered its benchmark rate another half percent Wednesday.)
The Bar Foundation took in $20 million in IOLTA money to distribute to legal aid agencies in 2007, according to Executive Director Sandy Klebanoff. That number has suddenly shrunk to $8 million for 2008. It is projected to shrink to $4 million in 2009, she said — “if we’re lucky.” Because the Foundation had $12 million saved in a stabilization funds, it was able to allow legal-aid groups to keep their full 2008 allotments.
“I don’t know of any nonprofit sector that’s been hit as badly” as legal aid by the economic meltdown, Klebanoff said — at a time when hard times more poor people need legal help than before.
Pat Kaplan said her New Haven agency plans to highlight the IOLTA mess in its upcoming winter fund-appeal mailing. She also said the state’s legal aid groups plan to lobby the legislature to increase its support this coming year — an uphill campaign giving ongoing cuts to the rest of the state budget.