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2013

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Background. Chapter 608, Statutes of 2009 (SB 678, Leno), now generally referred to as “SB 678,” was enacted to improve outcomes for adult felony probationers by giving counties a fiscal incentive to reduce the number of felony probationers that fail on probation and are sent to state prison. Specifically, SB 678 provides counties a share of the state prison and parole savings that occurs when fewer felony probation failures are sent to state prison. Under SB 678, the state annually determines the amount of savings generated from fewer probation failures being sent to prison and sets aside half of the total savings to fund grants to counties responsible for diverting probationers from prison. Each county’s share of the SB 678 funds is based on the number of probationers it diverts from prison.

Governor’s May Revision. The administration proposes modifying the SB 678 grant formula in several ways. First, the administration proposes that the state provide grant funding based on the number of felony probationers successfully diverted from county jail as well as the number diverted from state prison. Second, the administration proposes revising its estimate of the amount the state saves when felony probationers are diverted from prison from $10,000—as was proposed in January—to $20,000. Third, the administration proposes making adjustments to the way grant funds are awarded to counties that incarcerate probationers at rates above and below the statewide average. Specifically, the administration is proposing reducing the amount of funding allocated to certain counties that, despite a reduction in the rate at which they incarcerate felony probationers, still remain above the statewide average. This is intended to ensure that counties that have not achieved large reductions in their incarceration rates but still remain below the statewide average receive an increased SB 678 grant award. This would result in counties recieving a total of $107 million in SB 678 grant awards in 2013-14, or about $72 million more than the amount proposed in the Governor's January budget proposal.

Governor’s Proposal Would Undermine SB 678 Grant Program. We have several concerns with the administration’s proposal. In particular, we are concerned that the proposal would expand the SB 678 formula to award counties for felony probationers successfully diverted from county jail. Doing so would provide double-funding to counties for certain lower-level offenders for whom counties already receive funding under the 2011 realignment. In addition, the administration’s proposal is inconsistent with the original intent of SB 678 which was to better align local public safety outcomes with county and state fiscal effects. However, the administration’s proposal severs that linkage by providing state funding to counties for offenders who are ineligible for state prison. Instead, the administration’s proposal would have the effect of providing counties with supplemental funding for local successes for which they already have an inherent fiscal incentive to achieve—reducing jail costs through more effective probation strategies. It is also worth noting that the proposed allocation methodology would result in SB 678 creating a net cost for the state in years when the total grant amount to counties exceeded the estimated state savings.
 

Recommendations. Consequently, we recommend that the Legislature modify the administration’s proposal in several ways. Specifically, we recommend that the Legislature:

• Reject the proposed addition of the felony probation failure rate to jail to the SB 678 formula.
• Increase the administration’s estimated per capita cost to $21,500 primarily to account for parole-related costs.
• Require AOC to collect data from counties and CDCR necessary to recalculate the baseline failure to prison rates so that those rates no longer include offenders that would have been prevented from going to prison by the 2011 realignment. We assume some additional funding for counties to complete this research.
• Expand the grant to include lower–level offenders diverted by SB 678 in the first half of 2010—a population that counties currently do not receive funding for either through the SB 678 or the 2011 realignment. (For more on these last two recommendations and SB 678 generally, please see our publication The 2013-14 Budget: Governor's Criminal Justice Proposals.)
• Expand SB 678 to reward counties for successfully preventing failures to prison by offenders under forms of county community supervision created by realignment—mandatory supervision and Post-Release Community Supervision. This would require counties to report additional data to the state that is not currently collected systematically. Consequently, it would take time to establish baseline failure rates for these programs, and, therefore, grant payments for success that could not be made in 2013-14. We estimate that net state savings—as well as the grant totals to counties—from this expansion could be in the low tens of millions annually, depending on various factors.

Taken together, we estimate that these actions would result in the state allocating $75 million in SB 678 grant awards to counties in 2013-14, or about $32 million less than proposed by the administration.

We recognize that the primary reason the administration is proposing to expand SB 678 to include felony probationers successfully diverted from county jail is to ensure that probation departments continue to receive significant state funding. As described above, we find that the administration’s proposed approach raises serious concerns for the ongoing efficacy of SB 678. Therefore, if the Legislature shares the administration’s fiscal priority of providing more state funding to probation departments, it could simply create a separate probation grant program separate from SB 678 to do so.