The Board of Governors recently approved distributing $11.9 million in IOLTA and Justice Gap funding for the July, 2010 through June, 2011 grant year. Included in that amount are $4.2 million of IOLTA revenue, $750,000 in Justice Gap contributions, and $6.95 million from reserves. This distribution level represents a 15% reduction from the current year, but grants to individual legal services programs may reflect a different percentage change, due to the statutory distribution formula.

While these reductions are painful, given the increasing client need, they are not as bad as we had feared a year ago. The Trust Fund Commission has been working hard on its "Peak Your Interest" Leadership Bank campaign, and 74 banks are participating in the program or are paying rates that are higher than mandated by the comparability legislation. This has made a substantial difference, and has cushioned the impact of the recession.

Projections for the next couple of years, however, remain grim and we have already used much of our reserves to avoid more drastic cuts. We now project a reserve of $4.9 million as of June 30, 2011. Unless things turn around somewhat by then, or the Leadership Bank and the Justice Gap campaigns are able to bring in substantially more funds, the grants for the following two years will be extremely low - approximately $5 to $6 million each year - a 50% reduction! So far, of course, there has not been a reduction in the Equal Access Fund, which will be distributed when the state budget process is finalized.