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Texas Access to Justice Commission and Foundation announce possible remedies for the legal aid funding shortfall creating risks for low-income Texans and the state

The Texas Access to Justice Commission and Texas Access to Justice Foundation hosted a news conference yesterday at the Texas State Capitol to emphasize the ongoing funding crisis in the Texas legal aid system. At the conference, Texas Supreme Court Justice Nathan L. Hecht, the Court’s liaison to access to justice issues, announced a comprehensive legislative plan to address the funding crisis. In addition, a new economic impact study by The Perryman Group was announced.

Texas Legal Aid Funding

The continued rise in poverty, combined with a slow recovery of the national economy, has vastly increased the number of low-income Texans in need of free civil legal services. Currently, 5.7 million Texans qualify for legal aid for help with issues such as benefits for veterans, health care for the elderly, domestic violence and foreclosures.

Interest on Lawyers’ Trust Accounts (IOLTA) is a significant funding source for legal aid services in Texas, but those funds have decreased significantly due to historically low interest rates. IOLTA revenue for legal aid has dramatically declined from $20 million in 2007 to a projected $4.4 million for 2012. This decline in funding harmfully affects legal aid programs throughout the state.

“Helping struggling Texans with civil legal needs not only improves their lives and their families’ lives, it is a boost to the entire state as well,” Justice Hecht said. “Ensuring that Texans have access to justice allows them to be self-sufficient and ultimately lessens the need for taxpayer support.”

One legal aid lawyer is available for approximately every 11,512 Texans who qualify. To be eligible for legal aid, an individual must earn no more than $14,363 a year. For a family of four, the household income cannot exceed $29,438. 

Legislative Remedies Proposed

Several bills are expected to be filed this session that will help address the funding shortfall. The House and Senate budget bills (HB 1 and SB 1) as introduced include $13 million for legal aid in the Texas Supreme Court budget. The Texas Supreme Court requested an exceptional item that restores $4.6 million in general revenue back to the 2012-13 budget level of $17.5 million.

In addition, Senator Robert Duncan and Representative Senfronia Thompson have filed companion bills in the House and Senate (HB 1445 and SB 635) that would increase the funds dedicated to legal aid for indigent Texans from civil penalties and civil restitution recovered by the Attorney General. Senator John Carona is co-author of SB 635 and Representatives Sarah Davis, John Davis and Sylvester Turner are co-authors of HB 1445.

“The success of our civil justice system depends on the ability of all types of citizens to access our courts," Sen. Duncan said. "Civil legal aid provides significant services to veterans, women, children and the disabled and that is why I am proud to sponsor SB 635."

Rep. Senfronia Thompson noted, “Legal aid often means the difference between life and death, living in a home or on the streets, being self-sufficient or needing to rely on governmental agencies. HB 1445 is urgently needed to help address this critical funding shortfall.”

“Providing access to justice is a cornerstone of our democracy, and I am proud to play a leadership role in this effort,” Rep. Sarah Davis said. 

Findings from Economic Impact Report by The Perryman Group

A study to determine the economic impact of the legal aid delivery system in Texas was commissioned by the Texas Access to Justice Foundation, and findings were announced today. The study was conducted by Dr. Ray Perryman of The Perryman Group. 

The study examined the economic impact of legal aid currently being provided as well as the potential effect of expanding funding for legal aid. Currently, legal aid services lead to a sizeable stimulus to the Texas economy. The estimated gain in business activity equals an annual $722.4 million in spending, $346.9 million in output (total value of goods and services produced) and 4,528 jobs.

For every dollar spent in the state for indigent civil legal services, the overall annual gains to the economy are estimated at $7.48 in total spending, $3.59 in output (total value of goods and services produced) and $2.22 in personal income. This activity generates about $47.5 million in yearly fiscal revenues to state and local government entities.

There is a large unmet need for legal aid, and increased funding (and, thus assistance) would lead to further gains in business activity in addition to the other social benefits of more equitable access.

A copy of the full economic impact report from The Perryman Group is available at the Texas Access to Justice Foundation website.

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