Republicans in the state legislature abruptly slashed funding for civil legal aid for low-income clients this month.
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When Hurricane Helene hit western North Carolina in September 2024, it left behind it a trail of death and destruction—and a huge number of legal headaches. Residents struggled to understand the process of receiving help from FEMA, people were beset by scams and price gouging, and tenants whose homes had been destroyed or made uninhabitable puzzled over their rights.
Pisgah Legal Services, a nonprofit that provides civil legal aid in the region, had 120 staffers, and all of them were somehow affected, Jaclyn Kiger, Pisgah’s executive director, told me. Within about a week, though, Pisgah Legal had hosted three clinics; it ultimately helped thousands of Helene victims.
Civil legal services like these may not be well understood, but they serve an essential role in ensuring that everyone has access to justice. The Supreme Court’s landmark 1963 decision in Gideon v. Wainwright established that any criminal defendant has a right to legal counsel. But most legal issues are civil, not criminal. This includes any number of disputes between parties, but also issues such as evictions, scams targeting senior citizens, and domestic-violence protective orders. Recourse to courts in such cases can be lifesaving, but they are not free, and they are not easy for ordinary people to handle on their own.
Since 1981, every state has created programs to fund civil legal services with Interest on Lawyers’ Trust Accounts. It’s an elegant solution: Lawyers frequently hold money in accounts for clients, accruing interest that doesn’t truly belong to any party. IOLTA-funded programs use that interest to provide legal support without any cost to taxpayers. Kiger told me that Pisgah Legal received nearly $2 million in fiscal year 2025; overall, NC IOLTA provided clients roughly $12 million for civil legal services that year.
But in a budget passed this month, the Republican-dominated North Carolina General Assembly effectively cut this funding off. The budget permits $2 million in IOLTA funding in the coming fiscal year for civil legal aid, but that will sunset in the future. (Governor Josh Stein, a Democrat, signed the budget—the first that the state has managed to pass in more than a year—while criticizing elements of it, including the IOLTA cut, which he said “cruelly punishes low-income people who need access to justice.”) Most IOLTA money will be redirected to criminal legal services for indigent defendants, which the state is already constitutionally required to fund. Providers I’ve spoken with recently are crestfallen but also baffled. Although they all support funding for public defenders, they note that civil legal aid gets no other state money. “Hundreds of thousands of low-income people in the mountains are going to suffer,” Kiger said.
Civil legal services have historically been a bipartisan priority, popular among both parties and lawyers as well. Last year, a coalition of leaders of some of the state’s biggest law firms wrote a letter to the state supreme court backing IOLTA funding for civil legal services. “We believe a fair and functioning court system is not a partisan goal—it is a constitutional one,” they wrote. “By enabling litigants to participate effectively, IOLTA-funded legal aid strengthens both the efficiency and fairness of judicial proceedings.”
But some North Carolina Republicans have objected to the fact that some of the state’s biggest providers of civil legal aid also engage in progressive political advocacy or do legal work related to immigration or social-justice issues. The driving force behind the change in this month’s budget is state House Speaker Destin Hall, who is also an attorney in private practice. “IOLTA funds were shifted to ensure they’re not being utilized to bankroll progressive political pet projects like the NC Justice Center or provide government services to illegal immigrants. Instead, those funds will be used to provide legal services to underserved communities,” he said in a statement in June.
To that end, the general assembly placed political limits on a small portion of civil legal aid. The budget allows IOLTA money collected before July 2025 to be distributed, but only $2 million a year until the funds run out, and only to providers who don’t engage in political advocacy or take cases involving transgender health care or federal immigration law. This is less a way of removing politics from legal aid and more a way of instituting a different set of ideological priorities, and in any case, it applies only to this small and disappearing pot of money. The overarching goal appears to be not just going after progressive groups, but ensuring reductions in civil legal aid per se. This has led providers to speculate that the general assembly is less worried about “wokeness” and more interested in defending business interests. “I think it comes down to who we serve,” Kiger said. “We are serving the most vulnerable among us.”
When I contacted Hall’s office to try to understand the decision, a spokesperson asked me for detailed questions but never replied when I sent them. Ashley Campbell, who leads Legal Aid of North Carolina, the state’s largest civil-legal-aid firm, told me that she sought meetings with Hall but was rebuffed. In a statement, the executive director of the North Carolina State Bar lamented that “months of good-faith efforts” by the bar and NC IOLTA leaders had failed to sway the general assembly: “This loss of funding will prove devastating to the tens of thousands of low-income North Carolinians facing legal concerns that threaten their housing stability, income, access to health care and benefits, and safety from domestic violence and human trafficking.”
The defunding of IOLTA in North Carolina is a major event in the state, but it could have national implications. As I have been reporting for more than a decade now, many of the major currents in national politics have originated in the Old North State. The state has also been used as a proving ground, including for Donald Trump–style attacks on elections. Right now, the partisan warfare over civil legal aid in North Carolina is an outlier; Texas GOP legislators even strengthened IOLTA funding in 2023. But a failed Montana bill last year tried to weaken IOLTA, and Trump has proposed eliminating or drastically reducing funding for the Legal Services Corporation, a national civil-legal-aid group established by Congress. People I spoke with in North Carolina worry that the state budget could provide a template for other states as well. If that happens, access to justice could become just another luxury good.
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Facts Only
* Republicans in the North Carolina state legislature slashed funding for civil legal aid for low-income clients this month.
* The funding mechanism involves Interest on Lawyers’ Trust Accounts (IOLTA), which utilizes interest accrued from client funds to provide legal support without taxpayer cost.
* Pisgah Legal Services had 120 staffers affected by the funding changes.
* North Carolina IOLTA provided clients roughly $12 million for civil legal services in fiscal year 2025.
* The budget permits $2 million in IOLTA funding for civil legal aid in the coming fiscal year, which will sunset in the future.
* Most IOLTA money will be redirected to criminal legal services for indigent defendants.
* Political limits were placed on a portion of civil legal aid, restricting distribution to providers who engage in political advocacy or handle cases involving transgender health care or federal immigration law.
* The North Carolina State Bar lamented the loss of funding, citing threats to housing stability, income, healthcare access, and safety from domestic violence.
Executive Summary
Republicans in the North Carolina state legislature reduced funding for civil legal aid, specifically IOLTA-funded programs, this month. This action follows a period where residents faced legal challenges related to Hurricane Helene, including issues with FEMA assistance, scams, and tenant rights regarding destroyed housing. Civil legal services address disputes beyond criminal law, such as evictions and domestic violence protective orders, which are not freely accessible for many. Historically, state programs have been funded through Interest on Lawyers’ Trust Accounts (IOLTA), allowing legal support to be provided without direct taxpayer cost by using accrued interest from client funds held in lawyer accounts.
The budget proposal shifts most IOLTA money toward criminal legal services for indigent defendants, which the state is already required to fund constitutionally. Providers expressed concern about losing funding for civil legal aid, noting that this aid is not covered by other state funding streams. While some Republican legislators argued redirecting funds was necessary to prevent the use of IOLTA funds for "progressive political pet projects," the stated goal shifted the focus from serving vulnerable communities to defending business interests. Furthermore, efforts by legal advocacy groups and the State Bar to secure bipartisan support for IOLTA funding were met with resistance, resulting in political limitations on how the remaining funds could be used.
Full Take
The process described illustrates a strategic realignment of public resources where philosophical priorities are translated into budgetary constraints. The shift in focus—from ensuring broad access to civil justice via IOLTA to prioritizing criminal defense funding, coupled with specific ideological carve-outs for political advocacy and sensitive legal areas (immigration, transgender health care)—suggests an attempt to redefine the function and scope of public legal aid rather than simply cutting it. This indicates that the mechanism of funding itself is leveraged as a tool for ideological gatekeeping; the IOLTA structure, designed for impartiality, becomes a site where competing political visions are negotiated. The stated aim appears to be achieving reductions in civil legal aid "per se," which suggests a prioritization framework where civil rights protections are secondary to other perceived state objectives. The underlying pattern suggests that when access to justice is framed as a political contest, the means of funding become contested battlegrounds, leading providers to speculate on the underlying motivations—whether they are purely pragmatic or driven by a specific ideological shift regarding who counts as "the most vulnerable." The core tension lies in whether the procedural fairness inherent in IOLTA can withstand intentional re-prioritization based on political alignment.
Bridge Questions: How does the constitutional requirement for legal counsel in criminal cases interact with the prioritization of civil services? What are the long-term systemic effects when funding streams that historically supported diverse legal aid functions are subject to partisan redirection? If the focus shifts to defending business interests as suggested by providers' speculation, what specific metrics will define "serving the most vulnerable" in this new allocation structure?
Sentinel — Human
The text reads like well-researched feature journalism, skillfully balancing specific legal and political facts with broader societal implications regarding access to justice funding.