Letter To Legis Leadership

Maryland Legal Services Corporation

Charles Towers, 15 Charles Plaza, Suite

102, Baltimore, MD 21201

(410) 576-9494

Toll-Free 1-800-492-1340 Fax Number (410) 385-1831

Board of Directors F. Vernon Boozer, Esq. Chairman Teri A. Heger, LCSW Bernard L. Jennings Nathaniel E. Jones, Jr., Esq. Hon. Robert B. Kershaw Derrick Richardson Nancy A. Sachitano, Esq. Douglas S. Snyder, Ph.D. Hon. Pamela J. White Susan M. Erlichman, Esq. Executive Director Harriet Robinson Deputy Director

February 23, 2009

Thomas V. Mike Miller, Jr. Senate President Michael E. Busch Speaker of the House Maryland General Assembly State House Annapolis, MD 21401-1991 Dear President Miller and Speaker Busch: I am writing to you in my capacity as Chairman of the Maryland Legal Services Corporation (MLSC) to bring to your attention a serious matter regarding MLSC’s ability to maintain the current level of funding for the civil legal services delivery system in our state. As you are aware, a primary source of revenue for MLSC is the Interest On Lawyer Trust Account (IOLTA) program. Due to the economic crisis and unprecedented low interest rate environment, IOLTA income will fall far short of the original income projections for fiscal year 2009 (July 1, 2008 – June 30, 2009), generating approximately 51% less revenue than the prior year. Looking ahead, unless interest rates improve in the short term, MLSC will experience an additional 39% decrease in IOLTA revenue in the coming year. The total loss in IOLTA revenue will exceed 70% -- from $6.7 million in FY 08, to an estimated $2 million in FY 2010 (see enclosed charts). For the first time in its history, but for spending from its reserve fund MLSC would not have been able to meet its grant commitments for the current fiscal year. Preliminary plans for FY 2010 (July 1, 2009 – June 30, 2010) include eliminating all grants except core operating grants, and spending aggressively from the modest reserve that remains. Such action will still result in cuts to core operating grants to Maryland’s legal services providers of approximately twenty-five percent (25%) as compared with current funding. This loss of income will create significant hardship for programs that rely on MLSC funds in the coming year. Moreover, if the interest rate environment does not improve in the near term, FY 2011 will prove devastating to the civil legal aid system in Maryland. The Maryland Legal Aid Bureau will be forced to close some county offices, and many other providers throughout the state will be forced to lay off staff or cease operations altogether.

February 23, 2009 Page 2 Since the inception of IOLTA programs there has never been such a swift, dramatic loss of IOLTA income that has critically impacted legal aid locally, throughout Maryland and nationally (see press clippings from the Daily Record and New York Times, enclosed). The situation is particularly dire due to the alarming increase in Marylanders eligible for and needing legal assistance due to loss of housing, employment, health benefits, and a variety of other civil legal matters resulting from the economic crisis. MLSC is doing its best to responsibly address this downturn with current revenues, as described above, and has not pursued state funding during this legislative session in light of the state’s current fiscal circumstances. However, given the cutbacks MLSC will be making for FY 2010, and potential magnitude of the problem should the economy not improve in the coming year, I believe it is important to bring this matter to your attention at this time. Sincerely,

F. Vernon Boozer Chairman Enclosures