Left out of COVID relief, Legal Services Corp. prepares $1B budget request

Legal Services Corp., the national funder for legal aid providers across the country, including Indiana Legal Services, was unable to get additional funding through the American Rescue Plan Act of 2021, but the organization is planning to nearly double its annual budget request to more than $1 billion for fiscal year 2022.

In February, LSC had asked Congress to provide an extra $350 million to $500 million for legal aid in the COVID-19 relief package.

However, to pass the $1.9 trillion bill, Capitol Hill used the reconciliation process rather than the normal appropriations method, according to Ronald Flagg, LSC president. As a result, Legal Services Corp.’s funding request was not considered because the House and Senate judiciary committees, which usually handle budget proposals from LSC, were excluded from the American Rescue Plan negotiations and therefore could not advocate for support of legal aid.

Flagg emphasized his organization was a “victim of the process.” Congress did not review the request and then decide not to make the additional appropriation. Rather, the reconciliation process blocked LSC’s request from even being debated.

“We’re certainly disappointed that no funding is included but we want to make clear it was not because somebody thought about it and thought it was a bad idea,” Flagg said.

Looking ahead to the 2022 federal budget, LSC is already talking to lawmakers and preparing a request for an appropriation that is “just over $1 billion,” Flagg said.

“We think it’s absolutely necessary to make America’s promise of equal justice for all a reality,” Flagg said.

LSC had asked Congress for $652.6 million for fiscal year 2021. This is a $59.6 million increase over its appropriation request for fiscal year 2020 of $593 million.

Despite the Trump administration consistently excluding LSC funding from each of its proposed federal budgets, Congress regularly increased the appropriation but did not provide the amount LSC requested. In fiscal year 2020, Capitol Hill appropriated $440 million, a $35 million increase over the fiscal year 2019 appropriation but $153 million less than what LSC wanted.

A key impetus for the substantial boost in the coming appropriate request, Flagg said, is the justice gap that was wide even before the COVID-19 public health crisis. He pointed to the LSC’s study, which found that prior to the pandemic only about 14% of the civil legal problems faced by low-income Americas received assistance sufficient to be helpful. The other 86% of the problems either received no assistance or insufficient assistance.

“We estimate to make a material dent in that justice gap requires hundreds of millions of additional funding above our current funding levels,” Flagg said.

Even without the supplement from the American Rescue Plan, Flagg pointed out the LSC grantees might still be able to access some extra support through the additional funding the ARP is funneling to other agencies. The organization’s grantees could bolster some of their own programs by partnering with other local social service agencies that could be getting more money to provide services to the homeless and assistance to homeowners.

Also, Flagg noted the need for legal aid might be lowered as individuals and families benefit from the enhanced unemployment benefits and the child tax credit that are included in the COVID relief package.

The child tax credit alone is expected to have a profound impact on poverty. Under the plan, low- and middle-income families will receive periodic payments during the year totaling $3,000 for each child ages 6 to 17 and $3,600 for each child under 6.

Economists project this provision will reduce child poverty by nearly half, from 14% to 7%.

Flagg said with the additional money flowing into households, people will possibly be better able to pay their bills and keep their homes. Also, the financial support may alleviate some of the emotional stress, which could reduce the incidents of domestic violence.

However, Flagg said the catch is that much of the added benefits are self-executing. Individuals seeking the enhanced unemployment payments, for example, often need help in filling out and filing the application.

“They don’t just show up on your doorstep,” Flagg said. “You have to apply for them. So what we saw in 2020 was an enormous amount of work our grantees did helping people apply for unemployment benefits.”