Legislative Analyst's Office Analysis of the 2003-04 Budget Bill

Overview

General Fund expenditures for judiciary and criminal justice programs are proposed to decrease by 4.7 percent in the budget year. This net decrease reflects (1) a proposed shift of funding for trial court activities from the General Fund to new sales and use tax revenues, (2) unallocated reductions in judicial and trial court funding, and (3) reductions in departmental operating expense and equipment funding, and the elimination of vacant positions.

Expenditure Proposal and Trends

Budget Year. The budget proposes total General Fund expenditures of $7.3 billion for judiciary and criminal justice programs, which is a decrease of $363 million, or 4.7 percent, below estimated current-year spending. This overall decrease consists of General Fund increases in some areas and General Fund decreases in other areas. However, it is largely driven by General Fund reductions in judiciary programs, including most notably the Governor's proposal to shift trial court security costs from the General Fund to newly proposed sales and use tax revenues as part of a realignment proposal, and unallocated reductions in the budget for the judiciary.

Historical Trend. Figure 1 shows expenditures from all state funds for judiciary and criminal justice programs since 1996-97. Expenditures for 1996-97 through 2003-04 have been reduced to reflect federal funds the state has or is expected to receive to offset the costs of incarceration and parole of undocumented felons. As Figure 1 shows, total expenditures for judiciary and criminal justice programs have increased by $3.8 billion since 1996-97, representing an average annual increase of 8.5 percent. The judiciary and criminal justice share of the General Fund budget is projected to reach 11.7 percent in 2003-04, its highest level during the past ten years. This, in part, reflects General Fund reductions in other areas of the budget.

Spending by Major Program

Figure 2 shows expenditures from all sources for the major judiciary and criminal justice programs in 2001-02, 2002-03, and as proposed for 2003-04. As the figure shows, the California Department of Corrections (CDC) accounts for the largest share of total spending in the criminal justice area, followed by Trial Court Funding. This figure also shows the significant shift in funding for the courts from the General Fund to special funds.

Major Budget Changes  

Figure 3 presents the major budget changes for judiciary and criminal justice programs. These and other changes are described below.

Inmate Population and Workers' Compensation Drive Significant Increases. The budget provides full funding for the projected inmate and ward populations. The CDC forecasts a 2 percent increase (3,140 inmates) in 2003-04 compared to its spring 2002 projection, resulting in a budget augmentation of approximately $101 million. The Youth Authority projects a 2 percent decrease (90 wards) compared to the earlier forecast, resulting in minor savings. The budget provides funds for the increased costs of housing additional inmates in the CDC. In addition, for the third consecutive year the budget provides significant increased funding of $115 million for CDC workers' compensation costs.

Courts Hit by Largest Unallocated Reduction in Budget, and Must Absorb Major Cost Increases. The budget proposes unallocated reductions of $116 million for the trial courts and $17.7 million for the judicial branch, which includes the Supreme Court, Courts of Appeal, and the Habeas Corpus Resource Center. In addition, there are significant court costs that do not appear to be included in the proposed budget, such as negotiated salary increases for court employees, and increased county charges for services they provide to the courts. Under the Governor's proposal, the courts would need to absorb these costs in addition to the proposed reductions.

Courts Becoming Increasingly Reliant Upon Special Funds. Under the Governor's proposal, special funds (excluding the county contribution) represent the single largest share of Trial Court Funding (see Figure 2). For the first time in many years, fees are proposed to exceed the General Fund share of the Trial Court Funding budget. The primary sources of these funds are fees and penalties, such as the civil filing fee, trial motion fee, and criminal penalties. These special funds have grown from approximately 19.5 percent of court funding in 2001-02 to an estimated 42.6 percent in 2003-04. This growth is the result of fee and penalty increases included in the 2002-03 Budget Act, as well as proposed budget-year increases in fees. For the budget year, the Governor proposes to increase the existing trial motion fee from $23 to $33, establish a new court security fee, and transfer "undesignated fees" from the county to the courts to offset General Fund reductions. In addition, the Governor proposes to shift $300 million in court security costs from the General Fund to newly proposed realignment sales tax revenues. In the judicial budget, the Governor proposes to increase the appellate filing fee from $265 to $630.

Local Law Enforcement Programs Fully Funded. The Governor's budget provides $316.5 million (General Fund) to fully fund local law enforcement programs, including $232 million for Citizens' Option for Public Safety and juvenile justice grants, $51 million for high technology crime programs, $15 million for the War on Methamphetamine program, and $18.5 million for the Rural and Small County Law Enforcement Assistance program. 

The Budget Assumes Continuation of Federal Funds. The budget assumes the state will receive $154 million in federal State Criminal Alien Assistance Program (SCAAP) reimbursement. This is $50 million less than assumed in the 2002-03 Budget Act, and is consistent with prior-year receipts. Nonetheless, it continues to be a risky assumption since the President proposed to eliminate the SCAAP in 2002 and Congress has not included funding for the program in any of its pending continuing resolution bills. At the time this analysis was prepared, the state had not yet received SCAAP funding for the current year.