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Empire Justice Center Testimony on the 2009-2010 Human Services Executive Budget Proposal

January 14, 2009


Prepared by:

Susan C. Antos

Kristin Brown

Don Friedman

Louise M. Tarantino

Presented by:

Kristin Brown Lilley, Cathy Roberts


Good morning.  Thank you for the opportunity to share our recommendations for the 2009-10 State Budget.  My name is Kristin Brown Lilley and I am Director of Legislative Advocacy for Empire Justice Center and with me today is Cathy Roberts, Senior Paralegal.  Empire Justice is a non-profit legal services organization with offices in Albany, Rochester, White Plains and Central Islip.  Empire Justice provides support and training to legal services offices statewide, undertakes policy research and analysis, and engages in legislative and administrative advocacy.  We also represent low-income individuals, as well as classes of New Yorkers, in a wide range of poverty law areas.

Our testimony today will focus on a series of recommendations for the human services budget and will touch on the need to restore the elimination of civil legal services funding.  While civil legal services are not in the Education Labor and Family Assistance Budget, they are closely intertwined with the human services delivery system and if not restored, will have a serious impact on the way in which the laws, services and programs created by the legislature are implemented, accessed and enforced. 

As you begin the process of negotiating the budget with the Governor, we are all hoping that we will soon see a substantial influx of federal funding through a major stimulus package.  Empire Justice joins with colleagues in urging you to also push for revenue raising options here in New York that are fair and equitable to help make restoration of funding for essential programs and services for low income New Yorkers.  We also urge you to consider making targeted investments, including the Governor’s proposed welfare grant increase, that will recognize and help mitigate the disproportionate impact the fiscal crisis will have on low income families and individuals. 

A. Child Care

1. Take Child Care Out of the Flex Fund - The Executive Budget funds the state Child Care Block Grant (CCBG) at $510.3 million dollars with combined Federal Child Care Development Funds (CCDF) of $299.4 million, the State General Fund of $137.4 million, separate TANF funding of $5.154 million and $68.3 million in maintenance of effort funding.  The Executive Budget also transfers TANF funding which had previously been committed for child care ($356.3 million) to the Flexible Fund for Family Services (Flex Fund). The Flex Fund is funded in total at $1.32 billion. Last year, this same $356.3 in TANF money was added to the CCBG, which was funded at $906.4 million.

Once in the Flex Fund this $356.3 million in TANF funding can be used by counties for a range of services, but is not earmarked for child care. Putting dollars that are desperately needed for child care into the Flex Fund creates the potential for a reduction in overall child care funding despite a budget that appears not to cut child care. If districts fail to use these dollars for child care slots, reductions in child care will result.  Even if funding was to remain at last year’s level, there will be a reduction of slots because a market rate increase is scheduled to go into effect in October of 2009.

We urge you to return this $356.3 million in TANF  funding from the Flexible Fund to the child care block grant to prevent further erosion in child care funding and ensure that low-income working families have access to child care subsidies.  This is all the more critical because, as discussed below, New York is expecting a $6 million cut in federal child care funding as a result of population shifts, which will cause an additional loss of slots. 

2. Add State Dollars to the Child Care Block Grant - Investment in child care will stimulate the economy  -  Child care plays a critical dual role in New York State – it supports a robust economy and promotes the healthy development of young children. Child care maintains a stable and reliable workforce, allowing parents to focus on their jobs, knowing that their children are well cared for; the business of child care is a multi-million segment of our economy which employs over 100,000 New Yorkers.   Quality child care also supports our most vulnerable - young children, not only keeping them safe and cared for while their parents work, but also developing young minds in a way that research now shows is critical for later learning.
In New York State this year, 46,000 fewer children received subsidies than just four years ago - declining from 259,386 in FFY 2003-2004 to 213,171 this past year. It is expected that an additional 10,000 child care slots will be lost in this year due to a reduction in the federal block grant funding and the impact of market rate increases, which are scheduled to take place in October of 2009.  This will result in a total loss of 56,000 child care subsidy slots in 2009. Funding for child care in New York State has decreased from a high of $929 million in FY2004-05 to last year’s $906 million.   During this time, the market rate cost of a subsidized slot has increased steadily, further reducing the number of purchasable slots even if the funding had not decreased.  

This erosion of funding has left many working families scrambling for child care and using makeshift solutions that leave them stressed and concerned about the well-being of their children.  The reallocation of state funds which was made last June, has caused families further distress, as counties struggle to cope with reduced funds. Counties have responded by reducing eligibility levels – for example, even though the Social Services Law provides that those with incomes under 200% of the poverty level are eligible for child care subsidies, Monroe County, which sustained a $1.8 million cut in subsidy funding, discontinued subsidies for 900 children and reduced eligibility to 125% of poverty.  Suffolk County received a $2.2 million cut in funding for subsidies, causing it to entirely halt enrollment in its subsidized child care program.

New York State must invest in child care to keep low income wage earners employed. New York also must undertake a federal strategy to increase funding in this next federal fiscal year.  As noted above, New York State’s share of the federal Child Care and Development Fund block grant - a primary source of both child care subsidy and quality dollars - has decreased significantly over the last five years.   Without a substantial influx of child care block grant funds from the state and federal government, the number of children receiving subsidies in New York State will continue to decrease in the years ahead, putting the jobs of parents with low wages  in jeopardy and  and putting  their  children at risk. We urge the legislature to ensure that child care subsidies are protected from further decline and to allocate funding for additional child care slots in this year’s budget. 

3.  A Patchwork of Policies: Statewide Standards for the Administration of Child Care Funding would create a fair and equitable use of federal and state funds - Against this backdrop of limited funding is New York's archaic system of allowing eligibility rules and parent fees to be determined on a local basis. Although more than 90% of child care funding is federally and state driven, with only about 7% of the cost paid with local funding, the cost of a child care subsidy and many eligibility rules are determined at a local level.  These locally driven policies are listed by each social services district in a plan that is filed biennially with the Office of Children and Family Services.  These rules mean that the child care subsidy program is administered differently all over the state.

For example, the cost of care to similarly situated families depends on where they live. In Nassau County a family of three at 200% of poverty pays a parent share of $58 per week for a child care slot; In Suffolk County the same family would pay $83 per week. This results in an annual difference of $1,289 to similarly situated families, in the two counties on Long Island. Off Long Island, the disparities are even greater, with four counties charging a family of three at 200% of poverty $33 per week ($1717 per year) and twenty counties charging $116 per week ($6010 per year).

Providers get paid for absences in some counties but not others (53 counties pay for absences; 4 do not); parents with young children who work nights can get a subsidy to pay for child care while they sleep during the day in 47 districts; the income of 18 and 19 year olds is counted towards eligibility for a subsidy in some counties when determining household eligibility and not in others (23 social services districts count teen income only  if it benefits the family; others don’t count it or count regardless of its effect on eligibility).  

To make matters more confusing, counties can change their rules by simply amending their plans. This means that parents are not able to budget and plan properly. From year to year, their co-payments and their very eligibility may change at any time. It would increase the economic stability of low income working families and provide a safe nurturing foundation for the next generation if New York State established statewide standards for the rules of its child care subsidy programs.

B. COST CUTTING PROPOSAL - Eliminate Finger Imaging for All Public Benefits Programs

The state could immediately save about $5 million annually and streamline access for low-income families and local social services districts by ending the finger imaging requirement for public assistance, food stamp and Medicaid applicants.  In fact, in his health budget, the Governor has made this very proposal for Medicaid purposes, under his initiative to “streamline access to health insurance coverage by eliminating unnecessary steps in the enrollment process.” We applaud this initiative and believe it should be expanded to OTDA’s public benefit programs, including public assistance and food stamps.

Finger imaging technologies are used in just four states (Arizona, California, New York, and Texas), and because of the large populations of three of those four, by some estimates, in offices serving twenty three percent of the nation’s Food Stamp caseload.   Over the years there has been no evidence on a national or statewide level that finger-imaging is a cost effective method of avoiding duplicate participation.  Indeed, finger imaging systems have proved costly to states, and it is unclear that the amount of fraud deterred warrants their costs to the state itself, even without consideration of the costs to eligible households that do not apply. Other states, such as Maryland, Illinois, and Michigan, considered implementing finger imaging systems, but found that such systems were not cost effective and that other methods could fulfill the federal requirement to detect duplicate-aid fraud.
Furthermore, current finger imaging technologies are not failsafe and sometimes produce errors.  Such errors can mean that applicants guilty of fraud are not detected and that legitimate applicants are deemed fraudulent.

Several published studies have shown that finger imaging requirements in the Food Stamp Program deter eligible households from participating .  This is especially true with respect to certain groups in the food stamp-eligible population, specifically: elderly and disabled individuals; families living in rural areas of the state, many without reliable access to transportation; families with working adults who cannot take time off from work and households with children between the ages of 18 and 21, whose cooperation with the finger imaging requirement is sometimes impossible for the parents to obtain.  The imposition of finger imaging requirements in the food stamp program has never been mandated by either state or federal law. 

We urge you to strongly consider eliminating the policy and reap the benefit of streamlining access to federally funded benefits for New Yorkers in need as well as the substantial savings generated by eliminating the need for a multimillion dollar contract. 

C. Reject the Proposal to Reduce the Supplemental Security Income (SSI) State Supplement

The Governor’s proposed reduction to the sate supplement paid to New York’s Supplemental Security Income (SSI) recipients will result in short-changing the state’s neediest and most vulnerable citizens, its poor, elderly and disabled.

New York State currently pays a supplement of $87 to SSI recipients living alone. SSI recipients living with others receive a $23 supplement. Due to the negative impact of 2008’s economic turmoil on consumers, the Social Security Administration (SSA) announced a record 5.8% cost of living adjustment (COLA) for 2009 for all its beneficiaries, including retirees and SSI recipients. This translates into a $37 monthly increase in the federal benefit rate for SSI recipients, effective January 2009. This relatively modest increase still fails to raise SSI recipients above the federal poverty level.

The Executive Budget proposal would take away $24 a month from New York’s poor SSI recipients starting in June 2009.  The budget proposal rationalizes that the resulting payment still exceeds 2008 levels by $13. New York’s SSI recipients living with others fare a little better, keeping $21 a month over 2008 levels.

But the Executive Budget’s spin on this grab of SSI dollars is disingenuous: New York’s SSI recipients are the poorest of the poor, and asking them to forego any precious dollars or cents that SSA, the federal agency paying their benefits, determined was necessary to bring them closer to some sort of economic parity in these dismal times, will cause each of these elderly or disabled recipients increased pain and suffering they can ill afford.  Although the Executive Budget touts significant savings from this maneuver, any savings come at the expense of those least able to afford any cuts.  Perhaps a $24 a month decrease is insignificant to able bodied working people with sufficient income to meet monthly expenses. For SSI recipients already struggling to maintain some semblance of real purchasing power with the 5.8% COLA granted by SSA, any cuts at the state level go right to the bone.

There are better ways to generate savings than to take money out of the pockets of the neediest New Yorkers.  We strongly urge you to reject this proposal.

D. Support for the Welfare Grant Increase

At a time when too many public officials consider the severe inadequacy of the public assistance grant to be politically off limits or no longer relevant, we appreciate Governor Paterson’s determination to address this crisis, and willingness to propose what would be the first increase in the basic welfare allowance in 19 years.  We regret that the increase would be phased in over three years, not to begin until January 2010, but we recognize that this may be unavoidable.  We also feel that it is incumbent upon us to point out that the increase, while welcome, is also modest and will not sufficiently improve the ability of the poorest families in New York to meet their most basic needs.  Having said that, we at the Empire Justice Center strongly endorse this initiative as offering a painfully overdue, if incremental, improvement in the lives of needy families. 

While welfare reform resulted in massive reductions in the public assistance rolls, there are still more than half a million people receiving assistance at any given point during the year.  It should be noted that as individuals cycle on and off the rolls, a substantially higher number of people actually receive public assistance over the course of a year.  Furthermore, it is our belief that thousands more New Yorkers do not receive assistance, despite their need and eligibility, only because of the highly restrictive nature in which the program is administered.  In addition, beginning late in 2008, the number of New Yorkers receiving public assistance, and across the country, began to steadily increase for the first time in many years, as the faltering economy left more households without employment.  

In considering this issue, we must move away from tired stereotypes about the public assistance population.  It is critical that the light of reality be shone on the myth of the undeserving poor. 
First, a substantial percentage of individuals receiving public assistance struggle with a range of barriers to employment, including physical and mental disabilities, severely limited levels education, literacy, English proficiency and work-related skills, domestic violence, and other disabled persons in the household.  A series of studies in recent years suggest that between 35 and 44% of TANF families across the nation include one or more members with disabilities or other health-related limitations.   By 2002, over 17% of TANF households included at least one adult or child receiving Supplemental Security Income (SSI), aid for the aged, blind and disabled.

Second, 37% of all public assistance households in the state are children in “child-only” cases, with no adult on the case.  Among the most common types of child-only cases are those in which the parent is receiving SSI or is otherwise ineligible for welfare, and cases in which a non-parent caretaker relative is receiving welfare only on behalf of the children.   

Finally, more than 10% of all cases in New York State report earnings from employment.  These represent households in which at least one family member is employed but earnings are low enough that the family is still eligible for public assistance.  Thus the failure to increase the grant falls heavily on households with disabled family members, children in child-only cases, and employed recipients struggling to make ends meet.

Once we acknowledge the need to provide some form of assistance for our neediest residents – and New York has repeatedly done so, in the state constitution, by statute, by regulation and by budgetary appropriation – then it follows that the amount of assistance provided should bear some relationship to the cost of meeting the most basic human needs.  Current grant levels bear no relationship whatsoever to the cost of living in New York.

The basic allowance has not been increased in nearly 19 years.  The basic allowance, including the two “home energy allowances” that were added in the 1980s, should theoretically enable a household to cover its basic, recurring needs other than rent and fuel for heating.  In the years since the basic allowance was last increased, the cost of living in New York has increased by nearly 70%.   It is therefore hardly surprising that significant increases in the demand for assistance have recently reported across the state by homeless shelters, food pantries and soup kitchens.  Clearly, the simple failure to increase assistance while costs rise steadily results inevitably in intensifying hardship.

One other measure highlights the shameful inadequacy of the grant.  The Federal Poverty Level seriously understates the cost of living particularly in expensive states like New York.  Nevertheless, the increasing disparity between the FPL and the public assistance grant in New York is telling.  In 1975, the typical welfare grant for a family of three in New York would bring the family to roughly 110% of the FPL.  In 1990, the last time the basic allowance was increased, the grant brought the family to 66% of the FPL.  Nineteen years later, the grant leaves that family at less than 50% of the FPL.  

The proposed grant increase will, after the three-year phase-in is complete, bring that family of three to less than 55% of the poverty level.  When food stamps are included, household income approaches 80% of the FPL, a substantial, but insufficient improvement.  The reality is aggravated by the fact that the FPL seriously understates the true cost of living in New York State.  On Long Island, for example, the site of Empire Justice’s newest office, a recent study suggests that a more realistic gauge of poverty would be 50% of the region’s median income.  On Long Island, this would result in a figure – roughly $45,000 – that is more than double the FPL and four or five times the current public assistance grant.

It must also be noted that this discussion, and the Governor’s proposal, only address the non-shelter portion of the grant.  Although the shelter allowance was increased modestly in 2003, it remains perhaps the portion of the grant that is most dramatically at odds with the true cost of living throughout the state.  For example, in the Albany-Schenectady-Troy metropolitan area, the federal Department of Housing and Urban Development’s Fair Market Rent level for decent but modest housing for a family of three is $711 per month.  In stark contrast, the designated rent maximum for Albany County is $309 per month.  The result of this disparity is that people living on public assistance here are, as a matter of course, relegated to inadequate, overcrowded and substandard housing, or to homelessness.  It is therefore most unfortunate that the Governor’s proposal would not touch the shelter portion of the grant. 

These facts must inevitably temper our enthusiasm for the Governor’s proposal, but far from opposing it, we would argue that the proposal represents the absolute least the legislature can do to mitigate the hardship for needy families in our state.

E. Additional Recommendations For Grant Increase – Small Changes Would Have Big Impact for Low Income Relative Care Givers

As mentioned previously, 37% of the public assistance caseload consists of  “child only” cases. These relative caregivers are often grandparents, aunts and uncles, caring for children who are not able to live with their parents because of the death, disability, or incarceration of the parent. 

When the legislature acts on the Governor’s proposal for a public assistance grant increase, it should also authorize the following changes, which come with modest budget impacts but which would assist these vulnerable, child only cases. Although, two of these measures are regulatory, because they may have some small fiscal impact, we have included them in our budget testimony:

1. Repeal the requirement that children repay the public assistance debts of their parents.  When a relative caregiver receives a “child only” grant on behalf of a grandchild, niece or nephew, the size of the grant may be reduced if the child’s parent received an overpayment of public assistance during some previous time that the child lived with the parent. Current policy requires a local social services district to reduce the child only grant by 10% to repay a parent’s overpayment of public assistance if the child was in the parent’s household at the time the overpayment was incurred. 

State regulations at 18 NYCRR 352.31(d)(1)(iii) make anyone who is in the household at the time an overpayment was incurred responsible to repay it.   An amendment or repeal of this regulation would assure that recoupments follow the parent who is responsible for the overpayment but not their children.  

2. Allow relative caregivers on public assistance to receive “child only” grants. When relative caregivers are on public assistance the household receives a small incremental increase in its entire grant rather than a full “child only” grant. All other relative caregivers receive a full child only grant regardless of their income.   If 18 NYCRR 352.32 (e) and (f) were amended or repealed, households with care givers receiving public assistance would also be eligible for “child only” budgeting, which would increase the grant to the children.
3.   Repeal the requirement in Social Services Law 131-c that requires a child to support other children on the child only grant. When a child in a kinship family is supported by child support or an absent parent’s Social Security disability or survivor’s benefits that income will reduce the public assistance paid to any other children in that household. This means that if a grandparent is caring for two grandchildren who have different parents (i.e., the children would be cousins), and one child receives Social Security Survivor’s benefits because their parent is deceased, that child’s income must be used to support the other grandchild, eliminating or reducing the eligibility of the child without income for a “child only” grant.

F. Restore Cut to Kinship Program 

Non-parent relative caregivers save the state money because they keep thousands of at-risk children out of the foster care system. For every child served in an OCFS Kinship Program,  New York State avoids $16,500 in foster care costs.  Despite these demonstrated savings,  Governor's proposed  2009-10 budget  cuts the entire OCFS Kinship Program by fifty percent to $997,500 ($875,000 for the thirteen regional programs and $122,500 for the statewide Navigator).At its peak before the interim 2008 cuts of 2% and 6%, the programs were funded with $2.15 million.   We urge the legislature to recognize that this investment actually saves the state money, and to restore kinship care funding to $2.15 million.

G. Access to Education and Training

The Governor has proposed significant reductions in funding for a range of education and training programs that would severely impact low-income New Yorkers, including those receiving public assistance.  At a time where a shrinking job market makes it ever-more difficult to obtain decent-paying employment without a basic level of skills and education, these cuts may only serve to widen the shameful gap in New York State between its most affluent and its poorest residents.  Recent research by the Fiscal Policy Institute revealed that New York continues to have the widest income gap between rich and poor in the nation, and this gap has grown dramatically since the 1980s.  A complex mix of factors contributes to this situation, but certainly one critical factor is the obstacles, including inadequate preparation for the current job market, that confront low-income New Yorkers struggling to earn a livable wage.   We urge the legislature to restore these proposed cuts.

We will also take this opportunity to renew our strong support for legislation that will enhance public assistance recipient access to education and training activities.  A bill crafted to advance this objective was introduced in both houses of the Legislature this past session, and garnered considerable support, although it did not ultimately come to a vote.  A significant factor was opposition by the Office of Temporary and Disability Assistance (OTDA).

The bill has three fairly simple elements:

  1. The bill would require that districts count towards a recipient’s work obligations hours spent doing unsupervised homework, to the extent permissible under the recently modified Federal TANF regulations.  We appreciate that OTDA, in an administrative directive, has given districts the discretion districts to do this, but for two reasons we urge your support for this legislation.  First, providing a statutory basis for this change would make it less subject to changing administrations and political tides.  Second, it is hard to conceive of a reason why the counting of these hours should not be mandatory.  The failure to count these hours will at best impede, and more likely render impossible a recipient’s capacity to pursue critical educational activities.  The counting of these hours also assists the district in meeting its participation rate obligations.
  2. As authorized in the federal TANF regulations, the bill would add participation in four-year college programs to the list of countable educational activities.  OTDA has supported legislation to this effect, so we have a meeting of the minds on this issue.  On the other hand, we are aware that this provision has generated some opposition, generally premised on the notion that allowing access to college for public assistance recipients would give them an unfair advantage over other lower-income families for which college is perhaps not seen as an option.  Our response is simply that, to the extent that this concern may be valid, the answer is not to punish the public assistance families, but rather to take action to ensure broader college access for all New Yorkers. 
  3. Finally, this legislative proposal would provide that a local district cannot unreasonably deny a recipient’s request to participate in education or training activities.  We recognize that this provision generated perhaps the strongest opposition on the part of OTDA; we believe that this opposition is not warranted.  This is not the place to address OTDA’s concerns in detail.  But we will note that, in its memorandum of opposition, OTDA pointed repeatedly to the ways in which the bill deprives local districts of needed discretion to make individualized assessments and assignments.  In fact, too many districts currently make assignments without regard for or without a meaningful effort to ascertain the individual’s needs, employment history, disabilities, education and skill deficits, or preferences.  The modest requirement that they not unreasonably deny a recipient the right to participate in education and training would mean that they now must make just such an individualized evaluation and determination.  It is inconceivable that the State would protect the districts’ discretion to unreasonably deny access to education and training.  This is all the more remarkable in that (a) OTDA increasingly recognizes that education and skill deficits tend to be inadequately considered when districts make work assignments, and (b) overwhelming research reveals that many former welfare recipients have been struggling in the labor market and have been unable to earn decent wages, largely as a result of their education and skill deficits.

We sincerely hope that OTDA will become a partner in the effort to expand access to education and training, and in turn, to improve the prospects that people leaving the welfare rolls may also exit from poverty.

H. Disability Advocacy Program: Generating Savings for the State and Stimulating Local Business

We were very pleased to see general funding for the Disability Advocacy Program (DAP) maintained in the Executive Budget at an 8% reduction and TANF funding at 100%.  However, in light of the significant and very concrete savings DAP generates for the state, we are urging you to consider increasing funding for DAP as you negotiate the budget. 

Through the DAP program, legal services providers in every region of the state provide low income disabled New Yorkers with legal assistance when their SSI/SSD applications have been denied or their benefits terminated.  Many of the clients represented receive welfare benefits while they await a decision about their application.  For each successful case, the Social Security Administration provides a retroactive award to the client for benefits they would have received, beginning from the time of initial application and reimbursement to state and local governments for the benefits provided. With a success rate of 83% in 2007, the DAP program consistently generates federal reimbursement money for the state that exceeds the state funding used to provide the services.

In 2007 DAP advocates statewide generated $24,494,483 in retroactive awards for their clients and $7,620,771 in interim assistance for benefits provided for the State.  The program also generates significant ongoing cost avoidance by avoiding long term benefit costs for the state.  According to the Office of Temporary and Disability Assistance’s (OTDA) most recent Biennial Report to the Legislature, it is estimated that in 2005 DAP generated $10.5 million in public assistance cost reduction, resulting in a net gain of $14.6 million for the state and localities, more than twice the initial investment. 

Indeed, OTDA estimates that for each Safety Net recipient DAP advocates secure Disability benefits for, $3180 in annual savings is generated.  Again, according to OTDA, for each TANF recipient we successfully help, $831 in annual savings is generated.  In 2007 DAP secured Disability benefits for 1199 Safety Net recipients, and 501 TANF recipients for a total savings of $4.2 million a year for the state. These savings compound year after year, as DAP helps more and more clients secure disability benefits. 

Unfortunately, the DAP program has been flat funded for years.  Providers have had to increasingly turn clients and thus potential savings for state and local government away due to lack of resources.  This lack of resources has resulted in a reduction in the number of cases programs can close.  Between 2004 and 2007, DAP saw an approximate 25% reduction in the number of cases closed.  Obviously, these reductions had a direct impact on the savings generated for the state and the stimulus for local economies. 

An informal survey of DAP providers conducted by Empire Justice in early December found that despite high demand, providers have had to utilize strategies such as waiting lists, scheduling appointments months into the future, severely limited intake of new cases, and even temporarily shutting down intake so that advocates can catch up.  One program reports that they have an active case list of over 800 cases. Empire Justice only does intake two days a week for two hours because we are unable to meet the need.  Of those who responded, 80% of programs indicated that flat funding has resulted in being able to serve fewer clients and thus generate less savings for the state. Many have had to jeopardize the quality of services because they are unable to hire experienced staff.  Most have stopped doing any form of outreach or education about their services, as they simply can’t encourage people to call for assistance.  

Clearly without an additional investment DAP will lose its ability to keep bringing federal dollars into New York. To help maintain and increase the savings and benefits generated by the DAP program, we ask that you support provision of 9.74 million in general fund dollars and $1 million in TANF dollars in the 2009-10 state budget, an increase of just over $4 million dollars, which,  again, will generate many more million dollars in savings. 

I. Restore State Funding for Civil Legal Services

Empire Justice coordinates and staffs the Legal Services Funding Alliance, a coalition of the 20 civil legal services providers outside New York City.  The Legal Services Funding Alliance works closely with our colleagues in New York City in our collective effort to maintain and expand funding for the provision of civil legal services. We will be testifying at the Public Protection budget hearing as well, but wanted to make sure that you are all aware of the fact that all general fudnign for civil legal services has been eliminated in the Executive Budget.

History of State Funding - Civil legal services have been funded in the state budget as a statewide initiative since 1993. For fourteen years, civil legal services were funded annually through the efforts of the Assembly Majority.  Finally in 2007, recognizing the state’s responsibility to provide low income New Yorkers with access to these critical services, Governor Spitzer provided funding fir civil legal in his Executive Budget.  In 2008, funding was once again included in the Executive Budget, but at a nominal level, in expectation of a substantial increase in Interest on Lawyers Account (IOLA) Fund resources that never materialized. This year, the Executive Budget includes no funding for civil legal services, once again anticipating an increase in IOLA funding.  Unfortunately, it more likely that IOLA funding will be down substantially. In a New York Law Journal article published on December 26th, 2008, IOLA Fund Executive Director, Lorna Blake notes that IOLA grant making remained flat from 2008 to 2009.  Blake goes on to warn that IOLA revenue could be down as much as 70% in 2010. Given that the need for civil legal services is expected to increase exponentially as a result of the economic downturn and IOLA funding is expected to be cut dramatically, it is essential that the Governor and Legislature work together to not only maintain, but increase funding for civil legal services in this year’s budget.

Civil Legal Services Save and Generate Money for the State - Civil legal services programs play a critical role in our state’s justice system by helping to ensure that access to justice is not based on one’s ability to afford an attorney.  Indeed, as the economy worsens, fewer New Yorkers will be able to afford a private attorney at the very time they are more likely to need one.  When that happens, civil legal services programs are there helping to connect low income, struggling New Yorkers with benefits such as disability and unemployment, we are helping single parents navigate the child support system, we are helping  domestic violence victims obtain orders of protection, we are helping people avoid homelessness by staying evictions and avoiding foreclosure.   We are there, that is, to the extent that we have the financial resources to be there.  

While our own missions involve helping low income and marginalized people assert their rights, we also provide an incredibly cost effective service to the state.  As a result, providing funding for civil legal services is not just the right thing to do, it’s an economically sound investment that generates economic activity and helps state and local governments avoid substantial costs.  As our state and local economies continue to falter, the likelihood that low income New Yorkers will encounter issues that they need legal assistance with increases exponentially.  So does the potential for cost avoidance and cost savings generated by ensuring that legal services programs have the capacity to respond this increased demand for services. 

A substantial investment in civil legal services would get the state a double bang for its buck – leveraging both cost savings and pumping additional federal and private dollars in the pockets of low income New Yorkers by helping our clients access SSI/SSD payments, food stamps and increasing child support payments. 

As is well acknowledged, providing dollars to lower income individuals is a sure way to ensure that the money is spent expediently on necessities and in local economies, local businesses. Notes Peter R. Orzag, Congressional Budget Office Director, “To boost cost-effectiveness further, policymakers would need to focus on lower-income households and those with difficulty borrowing. The studies of the 2001 tax rebate suggest that such lower-income and credit-constrained recipients increased their spending substantially more than the typical recipient. “And in his testimony before the House Budget Committee, in January, 2008, Federal Reserve Chairman Ben Bernanke testified that the greatest economic effect of the stimulus would come from people with lower incomes, Mr. Bernanke said.”If you're somebody who has lots of financial assets and you receive an extra dollar, you may not change your spending much because you can simply either put the dollar in your bank account or take out a dollar as you need it. If you're somebody who lives paycheck to paycheck, you're more likely to spend that extra dollar."

Here’s how civil legal services save the state money and drive dollars into local economies:

  • We avert costly “crisis” services such as emergency and homeless shelter stays. 
  • We offset state costs by helping families and individuals secure federally funded benefits such as Social Security and Food Stamps. 
  • We help stabilize families and thus avoid foster care costs and
  • We help increase economic security by maximizing child support benefits for low income parents and children.
  • Finally, we leverage private and federal funds that bring dollars and jobs to every region of the state where a legal services program is located. 

According to the IOLA Fund, in 2006, IOLA grantees helped win $131 million in benefits for their clients.  This includes over $88 million in Social Security and SSI payments, over $12 million in child support payments, approximately $3.5 million in Unemployment Compensation and over $23 million in federal and other benefits. 

Taking into account total funding allocated to IOLA grantees from all sources, civil legal services generate over $9,000 in client benefits for every $10,000 invested, a return of 93 cents on the dollar.  The impact of these client benefits on local economies cannot be understated.  Low income families primarily spend their resources on subsistence items – from utility and grocery bills to paying for child care or transportation to and from work.  As a result, the majority of the benefits flow almost immediately into state and local economies resulting in sales tax revenues and business income to state and local businesses.  

Indeed, in their 2001 Grantee Activity Report, the IOLA Fund used a standard economic activity multiplier to estimate that in 1999 IOLA grantees generated $634.9 million in new economic activity and 10,793 jobs resulted from both the benefits generated for clients and federal funding secured by grantees to provide services. 

Current Status - Civil legal services providers face a stark reality. As the economic crisis deepens, more and more clients come to our doors in need of help.  They’ve lost their job, they’ve lost their health benefits, they’ve lost their disability assistance, they are in foreclosure, they are being wrongfully evicted, they can’t afford a lawyer and they need help.  Yet in this time of crisis, our state funding has been cut in half.  Before the economic downturn and before the state funding cuts, more than 80% of low income New Yorker’s civil legal needs went unmet.  Without immediate intervention, that already dismal number will continue to climb.

We stand before you today in fear. Afraid that our plight and the plight of our clients will be lost in the midst of “big budget” concerns.  But we simply cannot afford to fall between the cracks.  In the interest of justice we ask that you help us to ensure that we do not fall between the cracks. 

We are hopeful that Governor Paterson, who has long been a supporter of our services, will work with you to restore the funding for civil legal services, given the new information from the IOLA Fund that has come in since he developed the Executive Budget to 75% of the 2007 funding level, or $11,400,000. 


Supporting Documents:

2009 Human Services Testimony- CLS Funding Restoration Chart