Michael R. Schmidt
Karina Ayala-Bermejo, executive director of the Legal Aid Society of Metropolitan Family Services.
April 24, 2016

Feeling the pinch

Stephen Drinker, a legal aid clinic client in Chicago.
Michael R. Schmidt
Stephen Drinker, a legal aid clinic client in Chicago.
Margaret R. Duval, executive director of Domestic Violence Legal Clinic.
Michael R. Schmidt
Margaret R. Duval, executive director of Domestic Violence Legal Clinic.
By David Thomas
Law Bulletin staff writer

Legal aid clinics have, for the most part, managed to stay afloat as other social services begin to sink after nearly a full year without a state budget.

Directors at these clinics have acknowledged a perverse fact about their continued survival: Because they were getting so little money in the first place, losing out on that money from the state wasn’t going to automatically shut down their clinics.

But the cracks are starting to show for some legal aid clinics, and some indicated they will have to either lay off workers or cut back on services if their funding situation doesn’t improve.

For years, Stephen Drinker didn’t realize his wages had been garnished to support a child that wasn’t his.

He said he first noticed it in 1997, but didn’t really process it at the time because he was usually high on heroin. After getting sober, Drinker researched and learned about the tens of thousands of dollars in child support he had been paying.

Drinker, 45, went to the Chicago Legal Clinic for help in 2013. And after three years of fighting, he won his case earlier this year.

“Those guys, they stepped up to help me. They helped me,” Drinker said. “And I appreciate their help right now. I am glad they was there.”

“It was a very, very long hard battle for him,” said Edward I. Grossman, the executive director of CLC. “He would not have gotten relief without us. The guy probably got better than 50 hours of legal representation. Ultimately, It freed him from these tens of thousands of dollars of child support that he didn’t owe.”

But if Drinker came into the clinic today?

“I don’t know if we could dedicate that kind of resources to the next guy in a similar situation,” Grossman said.

The state’s social service net is in tatters, and legal aid clinics find themselves increasingly unable to help their clients who rely on other social service agencies for assistance.

These clinics cannot refer their clients to other agencies who can help them find housing or employment because those agencies have either reduced their services or closed altogether.

For instance, the attorneys at the Chicago-based Legal Aid Society of Metropolitan Family Services have been unable to link two of their Spanish-speaking clients to other agencies for the Supplemental Nutrition Assistance Program, Medicaid, unemployment, employment counseling and immigration relief assistance.

“What I think we are preparing for is the reality that many nonprofits — especially social service providers — are going to close,” said Karina Ayala-Bermejo, the society’s executive director. “We have to prepare to absorb as much as we can while continuing to stay afloat because this is a tipping point.”

Meanwhile, Metropolitan Family Services has had to cut mental health services for about 50 youths and their families because the organization is not receiving a $270,000 grant from the state, Ayala-Bermejo added.

Land of Lincoln Legal Assistance Foundation, which provides free legal services to 65 counties in southern Illinois, has seen many of its partners reduce their services as a result of the budget impasse, according to Lois J. Wood, Land of Lincoln’s executive director.

For instance, Centralia-based PAVE, which provides domestic violence services to four counties, cut back on their work week from five days to three, Wood said.

She described the relationship between legal aid clinics and their social service partners as vital. Often, one client who comes in for legal services will need the help of another agency and vice versa.

As Diana C. White, the executive director of LAF — formerly the Legal Assistance Foundation of Metropolitan Chicago — put it: “If you don’t have all of those pieces in place, the legal issues won’t solve the problem. I can get an order of protection, but what if [a domestic violence victim] can’t get into a shelter?”

Ayala-Bermejo pointed to a January survey from the United Way of Illinois that probed how deeply social service agencies were being affected by the budget impasse.

In that survey, 23 percent of state-supported agencies reported it would be difficult to operate as they had been if the budget impasse lasted until March.

The state has been partially operating without a budget since July 1 — the beginning of the state’s fiscal year 2016 — as the result of an ongoing political showdown between the Democratic-controlled legislature and Republican Gov. Bruce Rauner.

The governor has been pushing for business-friendly reforms as part of his so-called Turnaround Agenda and has vetoed parts of the state budget. Lawmakers have been unable to overcome those vetoes.

Still, the state is funding parts of the government. K-12 schools and lottery winners have received money. And nonprofit organizations have gone to court to free up money for the state’s match in Medicaid and to enforce consent decrees — court-brokered pledges that keep money flowing to services for children in state custody, mentally ill patients and other programs.

However, state universities and social service agencies are left twisting in the wind without state funding.

In a normal budget year, the state typically funds legal aid clinics by appropriating money to the Illinois attorney general’s office denoted for the Illinois Equal Justice Foundation.

The foundation is a 501(c)(3) tax-exempt organization established by the state Equal Justice Act to distribute state-appropriated funding to legal aid clinics throughout the state.

In fiscal year 2015 — the state’s the last enacted budget — the foundation was allocated $1.4 million. The foundation would receive the same in Rauner’s proposed fiscal year 2016 and fiscal year 2017 budgets.

Legal aid clinics would normally be struggling in this environment, according to Leslie Corbett, the executive director of the foundation.

“You would definitely see some of our smaller grantees closing their doors, and our foundation would itself would have most likely have had to close its doors,” Corbett said. “But the attorney general … is a fan.”

On July 8, seven days after the state began its current fiscal year without a full budget, Attorney General Lisa M. Madigan announced that part of a joint state-federal $136 million settlement with Chase Bank would go to the foundation to fund legal aid services like consumer debt counseling and legal representation.

Corbett said the $7.2 million the foundation received from the attorney general’s office will be stretched out over a three-year period. This year, $2.3 million will be divvied up among 29 legal aid clinics across the state.

But Corbett doesn’t like to talk about the money the foundation received this year.

“We have not been shouting from the rooftops that the attorney general has given us this money,” she said.

Corbett expressed fear that, somehow, the money they received would be used by Rauner and lawmakers as a justification for zeroing out the foundation’s funding in the future.

“We are worried. We are desperately worried the way the political landscape is right now, if this doesn’t get refunded, in two years when the attorney general’s money is gone, so will state funding be gone for state legal aid,” Corbett said.

“That is the fear,” she added.

Legal aid clinics can also receive annual grants from the Lawyers Trust Fund of Illinois, a nonprofit foundation established in 1983 that directs the interest on lawyers’ trust accounts, also known as IOLTA accounts, to those clinics. In the current fiscal year, the fund will distribute $8.69 million to 16 legal aid clinics.

Then there’s the federal government, which distributes money through the Legal Services Corp.

The corporation, established by Congress in 1964, directs money to only three entities in Illinois to serve three specific populations: LAF in Cook County, Prairie State Legal Services in the northern part of the state and Land of Lincoln Legal Assistance Foundation serving the rest.

LSC allocated a total $12,307,702 for federal FY16, which ends Sept. 30. According to White, this funding has strings attached. By accepting the money, those clinics cannot work on litigation like class actions, abortion rights, redistricting reforms, voting rights and grassroots organizing.

Outside of these funding streams, clinic workers said they receive a smattering of other support from government sources.

But even with this diversification of government funding sources and generous support from private donors, legal aid clinics are still beginning to feel the pinch.

For instance, approximately 35 percent of the Chicago-based Domestic Violence Legal Clinic’s annual budget comes from the state Department of Human Services.

That portion of the clinic’s budget was unpaid until Dec. 7, when the Illinois General Assembly passed and Rauner signed into law appropriations that provided domestic violence-related funding to clinics like DVLC.

DVLC Executive Director Margaret R. Duval emphasized that while the clinic has never been in danger of closing its doors, they would have needed to either lay off staff or reduce core services if that DHS funding had not been appropriated soon after.

“We would have to plan for layoffs. We really had almost no information when the funding was going to be restored, if ever,” Duval said. “How long do you continue services — if the funding is not going to return for a year or if it will be wiped out completely. We have an operating reserve. It would not have been prudent to spend the operating reserve to the last penny.

“We’re not at risk of depleting the operative reserve but we had to make a prudent business decision about how much do you spend without any information or hope that the funding is going to return,” she explained.

Prairie State Director Michael T. O’Connor said the clinic is running a deficit as result of flat funding from LSC and might have to resort to layoffs in 2017 if its funding situation isn’t resolved.

He acknowledged the LSC funding the clinic has received for this federal fiscal year is 1 percent greater than last year — and it’s considerably more than the 8 percent cut they were expecting — but it’s still not enough to match inflation and rising costs.

Meanwhile, agencies like Metropolitan Family Services have tapped into credit in order to maintain their level of operations and staff.

“Many social service agencies are essentially default, involuntary banks for the state, and this can’t go on much longer,” Ayala-Bermejo said.

Even if the budget were restored in the near future, many of the clinic directors said the budget impasse has done too much damage to social service agencies for them to recover right away.

Part of the problem is that these agencies would not receive all of their allocated funding right away; the revenue has to be collected first and then passed through the state comptroller’s office.

“In terms of how fast the state could pay out if a budget is passed, we simply do not know how long this would take for providers — if we can get paid at all,” Ayala-Bermejo said. “Providers have quietly speculated different options, including that the state could back-pay up until a certain point (some date in time) for services, but then who knows after that.”

Duval expressed similar sentiments. For agencies that have shut down projects or closed entirely, it’s not as if a new state budget gives them a “reset” button to hit, she said.

“You’ve lost experienced staff, you’ve probably exhausted cash reserves and your connections to the communities you serve have probably suffered as well,” Duval said.

Moreover, the fact the state would be passing an FY16 budget in March of 2016 doesn’t inspire confidence in her or others.

“We are currently creating our own FY17 budget, and the degree of uncertainty related to state funding makes it a pretty challenging exercise,” Duval said. “Until I feel fairly confident that this type of impasse is not just our ‘new normal,’ I won’t feel as though we have recovered.”

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