Legislature urged to drop sunset provision on legal services funding

Maryland’s legal service providers that aid low-income residents in everything from domestic violence proceedings to foreclosures told a Senate committee Tuesday they need legislators to do away with a sunset provision on civil filing fee surcharges that fund the majority of their budgets.

The Maryland Legal Services Corp. is funded by the filing fees, the Interest on Lawyers’ Trust Accounts and a flat distribution from the state’s Abandoned Property Fund. In 2010, the filing fee surcharges were raised to continue to support MLSC after IOLTA revenues plummeted, from $7 million to $2.3 million, due to declining interest rates.

The legislation had a sunset date in 2013, which was extended to 2018 after the economy did not rebound as expected, according to Michael J. Baxter, a past Maryland State Bar Association president who testified Tuesday before the Senate Judicial Proceedings Committee in favor of Senate Bill 811.

“While we wait, civil access to justice in the state suffers,” Baxter said. “If you don’t know if you’re going to have the money next year, you can’t plan your programs this year.”

The 35 legal service providers funded by MLSC, including House of Ruth, Maryland Legal Aid and Maryland Volunteer Lawyer Services, need the certainty of continued funding from the fees, which account for 80 percent of MLSC’s $12.8 million annual revenue, according to the proponents. The filing-fee surcharge ranges from $3 to $30.

MLSC Executive Director Susan M. Erlichman said the revenue is “absolutely fundamental” to providing legal services in the state.

“We fund the core operating services,” she said. “We keep the lights on for these programs.”

At a hearing on the cross-filed House Bill 972 last month, MLSC Chairman Glenn Ivey also stressed the funding was necessary to give potential donors and employees confidence in the service organizations.

“From a staffing standpoint, hiring and retaining top flight staff is difficult to do when they feel like the funding for their organization is at risk every few years,” he said.

The House committee has not yet voted on the bill.

MLSC also supports Senate Bill 856, cross-filed with House Bill 1291, to increase, from $1.5 million to $3 million, the organization’s annual share of the Abandoned Property Fund, which comes from unclaimed property held by the state comptroller. The General Assembly previously increased MLSC’s share from $500,000 to its current level in 2013.

Retired Chief District Court Judge Martha F. Rasin, a recent addition to the MLSC board of directors, said funding the organization allows Marylanders to have access to legal services they can’t afford, and the need has only grown.

“It’s a need that’s not going away and it’s a need that both these bills will help serve,” she said.

The House Judiciary Committee heard testimony on HB 1291 on Tuesday.