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Legislative Analyst's OfficeAnalysis of the 2002-03 Budget Bill |
The Trial Court Funding item provides state funds for support of the state's trial courts. California has 58 trial courts, one in each county. Trial courts hear all criminal cases including felonies, misdemeanors, and traffic matters. They also have jurisdiction over all civil cases including family law, probate, juvenile, and general civil matters. About 8.5 million cases were filed in the trial courts at some 400 court locations throughout the state during 1999-00 (most recent data available), and nearly 15,000 trials were conducted. The Trial Court Trust Fund is the main funding source for trial court activities.
The budget proposes total expenditures in 2002-03 of $2.2 billion for support of the Trial Court Funding program, a decrease of $20.2 million or 0.9 percent compared to estimated current expenditures. General Fund support would increase by $43 million bringing the total proposed General Fund expenditures to $1.2 billion. Figure 1 shows expenditures for the trial court in past, current, and budget years.
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Figure 1 Trial Court Funding Program |
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(In Millions) |
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Actual |
Estimated |
Proposed |
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Trial court operations |
$1,694.9 |
$1,948.1 |
$1,954.8 |
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Superior Court judges salaries |
188.2 |
206.0 |
214.5 |
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Assigned judges |
18.1 |
19.8 |
19.8 |
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Court interpreters |
54.5 |
57.3 |
59.7 |
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Unallocated reduction |
— |
— |
-37.8 |
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Totals |
$1,955.7 |
$2,231.2 |
$2,211.0 |
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Chapter 850, Statutes of 1997 (AB 233, Escutia and Pringle)--the Lockyer-Isenberg Trial Court Funding Act of 1997--established the Trial Court Trust Fund to support the operation of the trial courts. This act shifted fiscal responsibility for support of the trial courts from the counties to the state. This measure resulted in a major new financial responsibility for the state's General Fund and provided general purpose fiscal relief to counties by capping their future financial obligations for court operations. Figure 2 shows the sources of revenue for the Trial Court Trust Fund.
The Governor's budget proposes a number of changes to Trial Court Funding in 2002-03. The major General Fund augmentations include the following:
Proposed Reductions. These augmentations are partially offset by $30 million in reductions, including $7.2 million from delaying the one day/one trial jury reforms, and $23 million from reducing the operating budgets of each trial court by varying amounts. In addition, the budget proposes a one-time transfer of $28 million from the Trial Court Improvement Fund to the General Fund, and to shift $7.4 million in technology asset management costs to the Trial Court Improvement Fund from the General Fund.
We recommend that the Judicial Council report at budget hearings on the status of its plan to transfer trial court facilities to the state.
Background. Chapter 850 established the Task Force on Court Facilities to identify and provide options for funding court facility maintenance, improvements, and expansion for all the trial courts. The legislation also directed the task force to recommend an appropriate assignment of state and local funding responsibilities for these facilities as well as a transition plan for any changes. In October 2001, the task force submitted its final report.
Final Task Force Report. The final task force report is very similar to the interim report issued earlier in the year. It recommended that the state assume full responsibility for all existing court facilities within three years by either obtaining title to the property or leasing the property. The task force recommends enactment of legislation to formally transfer responsibility for trial court facilities to the state.
Potential Fiscal Impact. As we noted in the Analysis of the 2001-02 Budget Bill, state assumption of responsibility for court facilities is potentially very costly. According to the final task force report, estimated annual costs for court facilities is currently $140 million. This amount would be partially offset by county contributions pursuant to negotiated Maintenance of Effort (MOE) agreements. The MOEs would be based on historical funding levels. According to the task force, the county contribution is estimated to yield about $80 million to $90 million annually. Beyond this, the task force has identified future funding needs in the multibillion dollar range over the next 20 years.
Facility Transfer Process Needs to Be Streamlined. The final task force report chose not to adopt a single plan approach to the transfer and management of all facilities. Instead, the report recommended that the Judicial Council and the counties negotiate the transfer of facilities responsibilities on a building-by-building basis. Our main concern with this proposal is that it means there are likely to be 58 separate negotiations involving hundreds of individual buildings before the transfer of responsibility is fully implemented. This would be administratively difficult and could take a long time.
Developing an implementation plan that groups the facilities into logical categories and phases in the transition is one approach that may prevent some of these practical implementation problems. The buildings or courtrooms in question can be grouped according to identified priorities, thereby creating a more timely and efficient plan for transition to the state. The Judicial Council is working on legislation and a plan to transfer trial court facilities to the state. We believe that such a plan should (1) address the timing for state assumption of responsibility for these facilities, (2) streamline the facility transfer process, (3) include court facilities in the state's existing capital outlay planning process, and (4) include court facility funding as fiscal relief in the context of the state-county fiscal relationship.
Analyst's Recommendation. In view of the fiscal implications of state assumption of responsibilities for court facilities, we recommend that Judicial Council report at budget hearings on the status of its plan to transfer trial court facilities to the state.
We recommend the Legislature deny the Judicial Council's request for $2.3 million to augment the Court Interpreters program because the Judicial Council has not justified a projected increase in workload. (Reduce Item 0450-101-001 by $2.3 million.)
Background. The Court Interpreter program provides interpreters to non-English-speaking persons who are involved in court proceedings. Under the program, non-English-speaking defendants are provided interpreter services for all court-related proceedings, including pretrial hearings, the trial itself, and post-trial proceedings. The Judicial Council administers the program. The Governor's budget proposes an increase of $2.3 million for the Court Interpreter program.
No Evidence of Caseload Growth. According to the Judicial Council, the additional funding is required to meet anticipated caseload growth. As support for the projected growth in caseload, the council points to (1) program expenditure growth in recent years and (2) U.S. Census data on the number of California residents who speak a language other than English. At the time this analysis was prepared, the council could not provide data on the actual number of persons seeking court interpreter services, or the number of trials requiring interpreter services for the past few years.
We have several concerns with this proposal. First, while we would agree that program expenditures have grown, we would note that this spending growth appears to have been driven by recent increases in the reimbursement rate paid to court interpreters, and not necessarily by caseload growth. The Judicial Council has not indicated that it plans to further increase the court interpreter reimbursement rate in the budget year. Second, the census data do not demonstrate that non-English speakers represent a growing proportion of court defendants/filings. Third, based upon our review of the number of court filings in the past two years, we could find no reason to believe that additional resources will be needed for caseload growth in the budget year. According to the council, in 1998-99 and 1999-00, the latest years for which data are available, court filings were about the same.
Analyst Recommendation. For the reasons stated above, we recommend reducing the request by $2.3 million.
The Governor's budget assumes that increasing civil filing fees and criminal fines by 10 percent and 20 percent, respectively, will generate $61 million in General Fund revenue. There is considerable uncertainty regarding this assumption given the level of local discretion in setting criminal fines, and past shortfalls in civil filing fee revenue.
The Governor's budget proposes legislation to add a 10 percent surcharge on civil filing fees and a 20 percent surcharge on criminal fines with the revenues to be deposited in the General Fund. The budget assumes these surcharges will generate General Fund revenues totaling $61 million in the budget year, including $45.8 million from criminal fines and $15.2 million from civil filing fees. A civil filing fee is a fee charged by the court to file documents relating to civil cases. While criminal fines can be levied for a wide variety of criminal offenses, they consist primarily of fines for traffic violations.
Under current law, the state assesses a penalty equal to the amount of the criminal fine imposed by the counties. Of the total state penalty assessments, 30 percent is retained by counties to support trial courts and 70 percent is deposited in the State Penalty Fund, which is used to support various state programs. Revenues from court filing fees are deposited in the Trial Court Trust Fund, which is also used to support trial court operations. As indicated above, the Governor's budget proposes to deposit the revenue from the proposed surcharges in the General Fund rather than special funds.
Revenue May Be Overstated. In projecting the General Fund revenue that would be generated in the budget year by the proposed surcharges, the Department of Finance (DOF) assumed that the state revenues collected under current law by civil filing fees and criminal fines would increase by 10 percent and 20 percent, respectively. We have some concerns with this methodology.
As regards criminal fines, due to the manner in which the fines are levied, we believe that the DOF approach tends to overstate the potential General Fund revenue. This is because counties retain full discretion in setting the actual fine levied for criminal violations. In addition, in cases where a judge levies the fine for a criminal violation, the amount levied is often based upon the individual's ability to pay. As such, judges may lower the base fines in order to keep the final amount within the individual's ability to pay. Therefore, the projected level of additional revenues from the surcharge may not materialize.
The approach used by the administration also assumes that the collection rate on criminal fines will remain unchanged. In other words, the budget assumes that individuals will continue to pay their fines at about the same rate despite the added 20 percent surcharge. We believe that it would be more reasonable to assume that the collection rate on criminal fines would go down slightly because of the magnitude of the increase.
As regards the civil filing fee proposal, we believe the projected revenue increase may also be overstated. The latest Judicial Council report on court statistics shows a trend of declining civil filings. Between 1995-96 and 1998-99 (the latest year for which data are available), there was an average annual decrease of about 5 percent in civil filings. We would also note that past projections of revenue from increases in filing fees have been overstated. In 1997, civil court filing fees were increased as a result of Chapter 850. Despite projections that revenues would increase from the new fees, the state's Trial Court Trust Fund sustained several years of revenue shortfalls. The Judicial Council indicates that this occurred because of (1) a decline in civil filings and (2) inaccurate revenue projections for the new filing fees.
Given the recent history of filing fee increases and the level of local discretion in setting criminal fines, we caution the Legislature that receipt of the additional revenue of $61 million is uncertain.