The California Constitution vests the state's judicial power in the Supreme Court, the courts of appeal, and the trial courts. The Supreme Court and the six courts of appeal are entirely state-supported. Under the Trial Court Funding program, the state also provides support (above a fixed county share) for the trial courts. (For more information on the Trial Court Funding program, please see our analysis of the program earlier in this chapter.)
Proposed Budget. The Judicial budget includes support for the Supreme Court, the courts of appeal, and the Judicial Council. The budget proposes total appropriations of $334 million for support of these judicial functions in 2000-01. This is an increase of $26.3 million, or 8.5 percent, above estimated current-year expenditures. Total General Fund expenditures are proposed at $280 million, an increase of $25.8 million, or 10 percent above current-year expenditures.
The increase in the Judicial budget is primarily due to requests for: (1) increased operating expenses for the Court-Appointed Counsel program ($1.3 million), (2) increased staffing and related program costs for workload increases in the courts of appeal ($4.2 million), (3) increased salary funding for the Administrative Office of the Courts (AOC) and the courts of appeal ($2.5 million), (4) new programs and operations support in the AOC ($3.9 million), (5) increased technology and paralegal support for the Habeas Corpus Resource Center ($1 million), and (6) a 5 percent increase in compensation for appellate judicial officers ($843,000), which we discuss in the "Trial Court Funding" section of this chapter.
We recommend a General Fund reduction of $2.5 million requested to fund salary adjustments because the proposed augmentation has not been justified.
The budget requests funding of $2.5 million for the appellate courts and AOC to (1) pay costs associated with hiring new positions above the minimum budgeted salary range ($989,000) and (2) extend salary ranges by 5 percent at the minimum and maximum levels ($1.5 million). Our review indicates that these proposals are not justified.
No Evidence of Need to Backfill Redirected Funds. The budget requests funding to reflect the actual hiring costs (not to exceed 10 percent above the minimum) for all appellate court and AOC positions established during the past three fiscal years (1996-97, 1997-98, and 1998-99) at a total cost of $989,000. The requested amount will not actually pay for salary increases for these positions because the employees are already being paid at the higher rate. Rather, the money would be used to backfill funds that the Judicial Council has already redirected to pay for the costs of hiring employees above budgeted salary ranges.
Prior to 1999-00, all Judicial Branch positions were funded at the minimum salary range in keeping with standard budgeting practices. In 1999-00, the Legislature provided funding to hire all newly established appellate court and AOC positions at up to 10 percent above the minimum salary range. This additional funding is now included in the Judicial Council's baseline budget. The Judicial Council has concluded that last year's action suggests that funding should be provided to the Judicial Council to cover costs associated with funding all Judicial Branch positions at this higher rate.
We disagree with the Judicial Council's conclusion. The Judicial Council has been redirecting resources to fund the costs of hiring new positions above the budgeted minimum in the three fiscal years prior to 1999-00. The Judicial Council has been unable to provide evidence that redirecting resources has proven detrimental to its other budgeted activities. We note that the total increase proposed to backfill for the redirected funds is 0.3 percent of the total budget for the AOC and courts of appeal. In the absence of any evidence of a problem, we recommend that the proposal be denied.
Lack of Staff Turnover Indicates Salary Increases Not Justified. The budget requests adjustments that will increase both the minimum and maximum salary ranges of appellate court and AOC employees by 5 percent. The total cost of this proposal in the budget year is $1.5 million and represents the cost for two groups of employees:
The Judicial Council estimates the cost of completing this adjustment will grow to $2.6 million in 2001-02 as the full effect of the change is realized.
The Judicial Council indicates that the increases are needed because the AOC and the courts of appeal are generally located in high-cost labor markets and must compete with the trial courts and other local government bodies for the same labor pool.
Generally, when state agencies are granted an increase in the salary range it is because they have demonstrated recruitment and retention problems. Our review indicates, however, that the vacancy rates for the AOC and courts are low--only 5 percent for AOC and 2.2 percent for the Supreme and appellate courts. In our view, these low rates do not indicate a serious problem with recruitment and retention of staff.
The AOC indicates that through accelerated and innovative recruitment efforts, they have been able to keep vacancy rates low. Since the AOC also requested two new positions in the Human Resources Bureau to focus on improving recruitment, we do not see why these accelerated and innovative efforts will not continue through the budget year keeping vacancy rates low.
Unlike most state agencies, the Judicial Council is not required to seek approval from the Department of Personnel Administration (DPA) or the State Personnel Board (SPB) prior to making these types of salary adjustments. Further, when agencies apply for approval for salary adjustments to DPA or SPB, the agency must be able to demonstrate that it has the necessary resources to fund any increase from within its existing budget. We believe that the Judicial Branch should be held to the same standards as other state agencies. For these reasons, we recommend that this proposal be denied.
In summary, we recommend both portions of the proposal be deleted for a General Fund savings of $2.5 million.
The Governor's budget proposes $843,000 for a 5 percent salary increase for appellate justices. We recommend that the issue of Judicial salary increases be referred to the Legislature's policy committees to consider along with other broader policy issues regarding recruitment and retention of judges, and thus delete the proposed funding in the budget bill. (Reduce Item 0250-001-0001 by $843,000.)
The Governor's budget requests $843,000 in the Judicial budget for a 5 percent salary increase for appellate justices. In addition, the budget requests $13.2 million to provide an identical increase for trial court judges in the Trial Court Funding budget. These increases will require enactment of a trailer bill.
In our analysis of Trial Court Funding earlier in this chapter, we recommend that the issue of judicial salary increases be referred to the Legislature's policy committees to consider along with other broader policy issues regarding recruitment and retention of judges. Thus, we recommend that the Legislature delete funding for judicial salary increases in the budget bill. If legislation is enacted that increases judicial salaries, appropriate funding should be included in the bill.
We discuss this recommendation in more detail in the Trial Court Funding analysis earlier in this chapter.
We recommend approval of $1.1 million requested for equipment and copier replacement programs in the Administrative Office of the Courts and the appellate courts. We further recommend the Legislature adopt supplemental report language specifying that these amounts are not to be included in the baseline budget.
The budget requests $580,000 for an equipment replacement plan in the AOC and $500,000 for a copier replacement program in the appellate courts. The request proposes to build these expenditures into the respective baseline budgets to fund additional equipment purchases in future years.
Equipment Replacement Should Not Be Included in Base Budget. Although we believe that the request for funding in the budget year is justified, adding the additional funding to the department's baseline budget would mean that the AOC and the appellate courts would have the same level of funding to use for equipment and copier replacement each year. The AOC equipment replacement plan calls for major equipment to be replaced in the budget year. However, some of that equipment has a four- to ten-year life, raising concerns about the need to include the same amount of funding for equipment purchases in the baseline equipment funding every year.
We do not believe that major equipment purchases such as those proposed should be included in the baseline. Instead, equipment purchases should be "zero-based" and justified each year. Justifying major equipment purchases each year has always been standard budget practice and, we believe, provides the Legislature with a better opportunity to perform oversight of the annual Judicial budget. For these reasons, we recommend the Legislature direct the AOC, appellate courts, and the Department of Finance not to add the funding for equipment and copier replacement to the baseline Judicial budget.
This could be accomplished by adopting the following supplemental report language:
It is the intent of the Legislature that the Judicial's baseline budget for 2001-02 not include an increase for equipment and copier replacement. Equipment and copier replacement shall be justified in the annual budget process.