Funding for Civil Legal Aid in Maryland Faces Drastic Decline

MARYLAND LEGAL SERVICES CORPORATION –the largest funder of civil legal aid in the state – is facing a funding decline of approximately $9.8 million, threatening the availability of crucial services.

MLSC’s nonprofit grantees – who are also facing canceled fundraising events and decreased corporate donations – need support now more than ever as they continue their vital work safeguarding the basic human needs of low-income Marylanders.

Both of MLSC’s major funding sources have taken a hit due to the pandemic. Decreased filings during court closures led to a loss of more than $2.3 million from filing fee surcharges last fiscal year.

“The services provided by MLSC grantees – including help with eviction, foreclosure, domestic violence and more – will be critical in helping Marylanders recover from the COVID-19 pandemic,” said Susan Erlichman, MLSC’s executive director.

Both of MLSC’s major funding sources have taken a hit due to the pandemic. Decreased filings during court closures led to a loss of more than $2.3 million from filing fee surcharges last fiscal year. Even as courts have reopened, filings have not yet rebounded. MLSC’s filing fee revenue for July and August was down approximately 50% compared to the same time period last year, and the tremendous uncertainty surrounding the COVID-19 crisis means that this funding source could be volatile for some time.

Meanwhile, the interest on lawyer trust accounts (IOLTA) program is heavily dependent on interest rates, which now hover near 0% and are expected to remain rock-bottom for years to come. These rate cuts translate to projected IOLTA losses of nearly $5 million – a drop of 78% from fiscal year 2020.

“We saw similar interest rate cuts during the Great Recession, but the rapid drop in available funding is truly unprecedented in our 38-year history,” Erlichman said. “At a time when the need for civil legal aid has never been higher, we’re facing devastating losses.”

Layoffs and furloughs will also radically increase the number of clients who meet income-eligibility requirements for services from MLSC-funded providers. Even before the pandemic, more than 22% of Marylanders – approximately 1.3 million people – were income-eligible for MLSC-funded services.

How You Can Help

Donate in support of civil legal aid at MLSC.ORG/GET-INVOLVED/CONTRIBUTE.

Bank with an Honor Roll bank – these financial institutions pay favorable rates on IOLTA. Find the complete listing at MLSC.ORG/IOLTA/IOLTA-HONOR-ROLL.

Volunteer with a civil legal aid provider. Learn more at MLSC.ORG/GET-INVOLVED/VOLUNTEER.

Spread the word! Make sure your colleagues know the importance of civil legal aid – especially as Marylanders recover from the COVID-19 pandemic.