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

Department of Justice (0820)

Under the direction of the Attorney General, the Department of Justice (DOJ) enforces state laws, provides legal services to state and local agencies, and provides support services to local law enforcement agencies.

Budget Proposal

The budget proposes total expenditures of $606.7 million for support of DOJ in the budget year. This amount is $31 million, or about 5 percent, less than estimated current-year expenditures. The requested amount includes $302 million from the General Fund (a decrease of $14.4 million, or 5 percent), $137.3 million from special funds, $27.2 million from federal funds, and $140.2 million from reimbursements.

Youth Authority Lawsuit Funding Unjustified

We recommend deletion of $4.3 million requested for the defense of the California Youth Authority's class action lawsuit because the parties will probably reach settlement. We also recommend adoption of budget bill language to allow the Department of Justice to submit a funding request in the event that settlement is not reached. (Reduce Item 0820-001-0001 by $4.3 million.)

In January 2002, a class action lawsuit—Stevens v. Harper—was filed in federal court against the Youth Authority challenging the department's policies and procedures and virtually every condition of a ward's confinement in Youth Authority facilities. The Governor's budget requests $4.3 million for DOJ to defend the Youth Authority in this lawsuit. The funding request is for DOJ's projected costs of the case leading up to a possible trial. These costs include expenses related to the discovery process and contracting with subject area experts for defense testimony. In addition, the plaintiffs have filed a state lawsuit because the court significantly narrowed the scope of the federal suit.

Analyst Concern and Recommendation. According to court documents, the discovery process has been postponed until a panel of experts provides an evaluation and report on the issues raised in the federal lawsuit. Both parties have requested that the report deadlines be August 20, 2003. It is our understanding that these reports will likely lead to settlement discussions, in which case the current funding request would not be necessary. Moreover, based upon discussions with plaintiff attorneys, the state lawsuit will also probably be dropped once the expert reports are released. Again, as with the federal lawsuit, it is believed that the expert reports will most likely lead to settlement discussions.

Because it is likely that the federal and state cases will be settled out of court, we recommend deleting the $4.3 million requested for the case. However, in the event that the case proceeds in court, or there are some settlement negotiation costs, we recommend the adoption of budget bill language to allow DOJ to submit a funding request for these costs. Specifically, we recommend the following budget bill language:

0820-001-0001 Provision X. Notwithstanding section 27.00 of the 2003-04 Budget Act, the Department of Finance may submit a deficiency request if Stevens v. Harper proceeds to trial in federal or state court, or if expert consultant costs are incurred from settlement negotiations in this case.

Crime Lab Fee Proposal Has Merit, but Needs Implementation Plan

We find that the Governor's proposal to charge local law enforcement agencies for forensic services provided by state laboratories has merit. However, a number of implementation issues need to be addressed. We recommend that the Department of Justice and the Department of Finance provide the Legislature with the details of the proposal prior to budget hearings.

Background. Currently, the Division of Law Enforcement operates 10 regional crime laboratories and 2 special DNA laboratories. The regional labs provide analysis of various types of physical evidence and controlled substances, as well as analysis of materials found at crime scenes. While DOJ labs provide services to state agencies, they primarily serve local law enforcement agencies in jurisdictions without their own crime labs. These local agencies are found in 43 counties representing 25 percent of the state's population. The remaining jurisdictions maintain their own forensic labs at their own expense. Since 1977, DOJ labs have been reimbursed by local law enforcement agencies for blood alcohol testing from fees paid from penalties collected for driving under the influence convictions. However, for the analysis of crime evidence, state labs receive no reimbursements from local agencies that use their services.

Governor's Proposal. The Governor's budget proposes to charge local law enforcement agencies for forensic services provided by DOJ crime labs effective January 1, 2004. This is projected to generate $3.5 million in reimbursements from local law enforcement agencies and reduce General Fund spending by the same amount. We would note that the amount of reimbursements is based upon a yet to-be-determined fee schedule. It is not clear whether the fees will represent a portion of the costs for performing the services or the full costs.

Local Governments Should Pay for Their Lab Services. We have recommended in the past that the Legislature authorize the change in fee structure proposed by the Governor's budget, most recently in the Options For Addressing the State's Fiscal Problem in February 2002. Because developing physical evidence through laboratory analysis is part of the responsibility of local governments for investigating and prosecuting crimes, we believe that the costs for these services should be borne by the counties and cities. Such a funding alignment appears even more appropriate when it is noted that 19 local law enforcement agencies—county sheriffs, district attorneys, or city police—have undertaken this responsibility by operating their own crime laboratories at their own expense. We can find no analytical basis for providing these services at no cost to the agencies currently served by the state while denying this subsidy to those agencies with their own labs.

Analyst's Concerns. While we have supported such proposals in the past, we have also pointed out several implementation issues that need to be worked out before such a reimbursement system is in place. These issues include the following:

• Mitigating Unusually High Costs for Complex Investigations. Some cases processed by the labs involve significant amounts of physical evidence that require weeks of analysis and testing. This is particularly true of investigations involving firearms, blood, semen, hairs, fibers, and other trace evidence. If local agencies were to be billed for the costs associated with each case, the investigation of some serious crimes could create a fiscal hardship for smaller agencies to support. In order to ensure that such crimes continue to be investigated, some mechanism should be provided to mitigate these costs for smaller agencies.
• Ensuring That the Labs Are Financially Protected From Lags in Payment or Nonpayment of Fees. If the labs are to be funded by reimbursements, they must have a mechanism to ensure full and timely payment of these fees. As fee requirements are expanded, DOJ must either have the authority to refuse services to agencies that do not pay their fees, or to receive payment out of some other state allocation of funds to the local jurisdiction.
• Establishing an Appropriate Fee Schedule for Charging Local Agencies. Determining the appropriate basis for allocating the costs of lab services can be challenging for some forensic services. For example, the costs of criminalistics analysis can vary widely depending on the case, such that a flat-fee schedule would probably be inappropriate. As a result, it will be necessary to undertake a review of the services provided by the labs and the costs associated with them in order to determine the appropriate fees.

Analyst's Recommendation. We find that the Governor's proposal to charge local law enforcement agencies for forensic services provided by DOJ has merit. However, we have identified a number of implementation issues which need to be addressed before the proposal is adopted. Therefore, we recommend that DOJ and the Department of Finance provide the Legislature, prior to budget hearings, with the details of the proposal, including its plan to resolve issues we have raised above.