Over the past 16 years, the Legislature has enacted various measures that realigned to counties a significant share of responsibility for managing juvenile offenders. As part of his 2012-13 budget plan, the Governor proposes completing the realignment of juvenile justice by stopping new admissions of offenders to state Division of Juvenile Justice (DJJ) facilities on January 1, 2013. The Governor would provide counties with an unspecified level of funding to manage wards who would otherwise have been committed to DJJ after that date, as well as $10 million in planning grants in the current year. As discussed in this report, we believe the Governor’s proposal has merit on both policy and fiscal grounds, but that the Legislature could address various concerns with the administration’s plan. Specifically, we recommend developing a funding approach that promotes innovation and efficiency, establishing a transition plan for DJJ, providing state oversight and technical assistance through the newly created Board of State and Community Corrections (BSCC), taking measures to reduce the number of juveniles tried in adult court, and requiring counties to house minors tried in adult court until age 18.