City Bar Urges Full IOLA Funding in Final FY27 New York State Budget
As New York State’s annual budget session enters final negotiations, the New York City Bar Association joins the civil legal aid community and the private bar alike in supporting State Senate and Assembly proposals that include $102.5M to fund the second year of five-year Interest on Lawyer’s Account (IOLA) contracts and the Justice Infrastructure Project, and the Senate’s recommended additional $50M to enhance civil legal services for low-income New Yorkers, moving the state closer to meeting an estimated $1 billion civil justice gap.
For nearly 50 years, New York’s IOLA Fund has harnessed market-generated revenue from interest on private funds held in attorney escrow accounts to support a vital civil legal aid ecosystem. When the Fund’s creation changed ethics and compliance rules governing the legal profession, those reforms benefited the profession by introducing management efficiencies while enabling the private bar to support low-income New Yorkers’ critical legal needs through a robust, stable, predictable IOLA grantmaking authority.
Like its peers, the New York City Bar Association plays an essential leadership role for the private bar. That includes safeguarding the legal profession’s independence – a value more important than ever. Closely connected is the City Bar’s fierce commitment to preserving access to justice, especially for the most vulnerable in our communities. Because IOLA funding – which is not taxpayer money – sits at the intersection of these two principles, the City Bar urges Governor Hochul to join the Legislature in restoring full IOLA spending authority for FY2027 in the amount of $102.5 million. The Governor’s proposed budget included only $77.5 million – nearly 25% less in spending authority than needed – for IOLA’s Year 2 grants. It is critical that the IOLA Board retains discretion to spend funds in accordance with IOLA’s governing statute, as proposed in the Senate’s budget bill.
Two years ago, the City Bar helped lead a broad coalition of private legal institutions and hundreds of private-sector attorneys who joined with the public interest legal community to ensure that IOLA funds – again, not taxpayer dollars – were not swept into the state’s general fund. That successful effort underscored two important truths: that the legal profession in New York is independent, and a critical partner in ensuring access to justice. Today, in 2026, at a time when federal authorities continue unprecedented attacks on the independence of the private bar, it is imperative that New York respect the legal profession’s expectations regarding how IOLA funds are used.
The New York City Bar Association has a unique lens into the private bar’s long partnership with civil legal services organizations – through pro bono work, referrals, and a shared commitment to the principle that legal representation should not be a privilege reserved only for those who can afford it. The City Bar works alongside these organizations and daily sees their professionalism and lasting impact on communities across New York. As a testament to that, 67 major private law firms and corporate legal departments have supported this year’s effort to restore full IOLA spending authority. IOLA grantee organizations are not asking for charity. They are asking for stable, predictable funding so they can plan, hire staff, serve clients, and honor grant commitments made in good faith.
Both the Assembly and Senate have acted to restore the requested $102.5 million in IOLA spending authority, and we are deeply grateful for that leadership. We respectfully urge Governor Hochul to complete that work in the final enacted budget. Civil legal services organizations have earned the trust and support of the private bar across New York State, and vulnerable New Yorkers who rely on them deserve nothing less as well.
We accordingly urge members to learn more at the City Bar’s IOLA advocacy campaign page, or register your support for full IOLA Fund spending authority via an IOLA digital action co-sponsored by the City Bar, New York Lawyers for the Public Interest, and the New York Legal Services Coalition.
About the Association
The mission of the New York City Bar Association, which was founded in 1870 and has over 20,000 members, is to equip and mobilize a diverse legal profession to practice with excellence, promote reform of the law, and uphold the rule of law and access to justice in support of a fair society and the public interest in our community, our nation, and throughout the world. www.nycbar.org