Florida banks on new way to fund legal aid

Florida aims to take up some of the slack left in legal aid services by federal budget cuts with an innovative program to begin this fall.

Proponents of the Interest on Trust Accounts (IOTA) program admit that it may not totally replace federal support. But they say it offers an alternative not dependent on tax revenue or direct donations, and provides a funding base from a previously untapped source.

Under the IOTA program, certain escrow bank accounts previously considered either too small or too short-term to be placed in interest-bearing deposits will now be pooled by the banking institutions so that they become interest-bearing.

Florida is one of four states, including Maryland, California, and Idaho, which have approved the program. Some 31 other states have the concept under study. The decision to participate is mandatory only in California.

In Florida, banks send the revenue directly to the Florida Bar Foundation, which makes a decision on distribution to grant applicants. According to Foundation executive director Jane Robertson, almost $288,000 in funds had already been received in early September for direct legal aid redistribution. ''With 31 applicants, it will be a tough decisionmaking process,'' she says. Grants should be decided on by late September.

Some 1,720 attorneys out of 17,500 who use trust accounts in the state have already volunteered to participate by the end of the first funding year ending Sept. 1, 1982, says Ms. Robertson. With full participation during the coming year, at least $1.2 million will be available for 1983 funding - even if no other attorneys participate. The $288,000 collected represents only about 80 percent of the IOTA funds, with the balance earmarked for legal scholarships and community activities.

Jeffrey Barker, director of the state's Legal Services Corporation, says federal cutbacks have decreased its budget this year by about 25 percent.

The Florida Bar has rejected a proposal to donate direct legal services to the needy, and has relied on the trust fund program to meet those needs instead.