The 2017-18 Budget

Department of Justice

Overview

Department of Justice Has Various Responsibilities. Under the direction of the Attorney General, the California Department of Justice (DOJ) provides legal services to state and local entities, brings lawsuits to enforce public rights, and carries out various law enforcement activities. The DOJ also collects criminal justice statistics from local authorities; manages the statewide criminal history database; and conducts background checks required for employment, licensing, and other purposes. In addition, the department provides various services to local law enforcement agencies, including providing forensic services to local law enforcement agencies in jurisdictions without their own crime laboratories.

Spending Proposed to Increase by $33 Million in 2017‑18. The Governor’s 2017‑18 budget proposes $858 million to support DOJ. This is an increase of $33 million, or 4 percent, over the estimated current-year level of expenditures. As shown in Figure 1, roughly half of DOJ’s budget supports its Division of Legal Services, while the remainder supports its Division of Law Enforcement and its California Justice Information Systems Division. Of the total budget proposed for DOJ in 2017‑18, about one-fourth—$215 million—is from the General Fund. The General Fund amount is $6 million, or nearly 3 percent, below 2016‑17 spending. This is primarily due to a proposed one-time unallocated reduction, which we discuss in greater detail below.

One-Time Unallocated General Fund Reduction

LAO Bottom Line. We recommend that the Legislature withhold action on the Governor’s proposed one-time $5 million unallocated reduction to DOJ, pending specific information from the administration and DOJ on how the reduction would be accommodated.

Governor’s Proposal

The Governor’s 2017‑18 budget includes a one-time unallocated $5 million General Fund reduction to DOJ in order to achieve General Fund savings. The department would be allowed to decide how to accommodate the reduction.

Impact of Proposed Reduction Is Unclear

The proposed reduction does not appear to result from reduced workload or costs. As such, this one-time reduction could potentially impact DOJ operations. Absent a specific plan on how this reduction would be achieved, it is difficult for the Legislature to weigh the trade-offs of the proposed reduction, including how it could impact legislative priorities. For example, the reduction could have minimal impact on programs that are a legislative priority to the extent that DOJ can absorb the reduction through savings from routine staff vacancies or delaying one-time expenditures. Alternatively, DOJ could choose to reduce or eliminate activities that are a legislative priority. Without a specific plan from the department, the Legislature has no way to ensure that this would not occur.

LAO Recommendation

Withhold Action on Proposed Reduction. In view of the above, we recommend the Legislature withhold action on the Governor’s proposed one-time $5 million unallocated reduction to DOJ, pending specific information from the administration and DOJ on how the reduction would be accommodated. Specifically, we recommend the Legislature require the administration and DOJ to report at budget hearings this spring on the specific actions it plans to take to achieve $5 million in General Fund savings in 2017‑18. Based on this information, the Legislature would be able to weigh the proposed reduction against its other General Fund priorities, as well as assess whether the department’s plan to address the reduction is aligned with its priorities. To the extent that the Legislature decides to reduce DOJ’s budget, we recommend that the Legislature consider making targeted reductions—rather than an unallocated reduction that would give the department full discretion to implement—in order to ensure that legislative priorities are maintained.

Proposition 56

LAO Bottom Line. We recommend the Legislature require DOJ to report by April 1 on how it plans to (1) use Proposition 56 funds for the enforcement of tobacco-related laws, (2) allocate Proposition 56 funds to local law enforcement, and (3) provide sufficient oversight to ensure that the funds are used in accordance to the requirements of the measure. We also recommend that the Legislature adopt budget trailer legislation requiring DOJ distribute Proposition 56 funds to local law enforcement through a competitive grant program, consistent with best practices.

Background

Proposition 56 Funding for DOJ. Proposition 56, which was approved by the voters in November 2016, increases the state excise tax on cigarettes and other tobacco products (including e-cigarettes). The measure requires that the revenues from the increased tax be used to support various specified purposes. Of these revenues, $36 million is to be distributed annually to DOJ: $6 million to enforce laws that regulate the sale and distribution of tobacco products and $30 million for the department to distribute to local law enforcement agencies for the support and hiring of peace officers for various activities, including investigations intended to reduce the illegal sale of tobacco products to minors. The measure specifies that this revenue cannot be used to supplant state or local funds currently used for these purposes. We note that the annual allocation to DOJ could potentially be adjusted if it is determined that there has been a reduction in revenues due to lower consumption of tobacco products due to the measure.

DOJ Tobacco Litigation and Enforcement Section. DOJ currently has a Tobacco Litigation and Enforcement Section that administers and enforces numerous federal and state tobacco laws. For example, this section is responsible for overseeing compliance with the tobacco Master Settlement Agreement (MSA)—an agreement reached in 1998 between four large tobacco companies and the Attorneys General of 46 states, including California. The MSA imposed various requirements upon the tobacco companies, such as making annual payments to offset a portion of state costs resulting from tobacco use and restricting advertising activities related to tobacco. Additionally, this section works with other government agencies and stakeholders to reduce tobacco sales to minors. The Tobacco Litigation and Enforcement Section is estimated to receive $3.2 million—$2.9 million General Fund and $0.3 million special fund—to support approximately ten authorized positions in 2016‑17.

Governor’s Proposal

The Governor’s budget reflects a total of $45 million of Proposition 56 revenues being allocated to DOJ in 2017‑18 for the enforcement activities required by the measure described above. This amount includes (1) $9 million in revenues from 2016‑17 that were deposited after the enactment of Proposition 56 in November 2016 and (2) $36 million in revenues for 2017‑18. Of the $45 million total, the budget provides $7.5 million to enforce tobacco-related laws and $37.5 million to allocate to local law enforcement. DOJ is currently in the process of determining how it will allocate these funds.

Unknown How Proposition 56 Funds Will Be Spent

Absent specific details on how DOJ plans to allocate the $45 million in Proposition 56 funds, it is difficult for the Legislature to ensure that the funds will be used in accordance with the measure’s provisions and legislative priorities. It is unclear whether the department will use the $7.5 million for the enforcement of tobacco-related laws to expand upon the activities of the Tobacco Litigation and Enforcement Section. It is also unclear whether DOJ will require additional position authority to hire new employees to assist with the enforcement of tobacco-related laws.

According to DOJ, it is currently in the process of developing a methodology for determining how the $37.5 million for local law enforcement will be allocated and administered. Until the department develops such a methodology, the Legislature cannot assess whether the funds will be distributed fairly, effectively, and for activities it prioritizes. It is also unclear how the department plans to ensure the monies provided to local law enforcement are used in accordance with the requirements of Proposition 56.

LAO Recommendations

Require DOJ to Report on Use of Proposition 56 Funds This Spring. We recommend the Legislature require DOJ to report by April 1 on how it plans to (1) use the $7.5 million for the enforcement of tobacco-related laws (including how such enforcement will coordinate with the Tobacco Litigation and Enforcement Section and whether the department will need additional position authority), (2) allocate the $45 million to local law enforcement, and (3) provide sufficient oversight to ensure that the funds are used in accordance to the requirements of Proposition 56. Based on this information, the Legislature would be able to determine the extent to which it needs to provide statutory guidance to the department. At a minimum, we recommend that the Legislature adopt budget trailer legislation requiring DOJ distribute the monies to local law enforcement through a competitive grant program, consistent with best practices. Such best practices include developing (1) clear criteria for evaluating and comparing applications for funding and (2) specific performance or outcome reporting requirements for recipients that can be used to ensure accountability.