LAO 2004-05 Budget Analysis: General Government

Analysis of the 2004-05 Budget Bill

Legislative Analyst's Office
February 2004


General Fund expenditures for judiciary and criminal justice programs are proposed to increase in the budget year. However, this increase reflects the replacement of one-time federal funds with General Fund monies. Adjusting for these one-time savings, the budget actually proposes a decrease in spending for this area, which is mostly due to substantial unallocated reductions in spending for corrections and the courts and, to a lesser degree, a projected drop in the prison population.

Expenditure Proposal and Trends

Budget Year. The budget proposes General Fund expenditures of $7.6 billion for judiciary and criminal justice programs, which is about 10 percent of all General Fund spending. This amount represents an increase of $425 million, or 6 percent, above estimated current-year spending. This increase does not reflect a policy choice, but is the result of backfilling for federal funds ($852 million) that do not continue in the budget year. This increase also masks substantial reductions in judiciary and criminal justice programs, which would otherwise equate to a more than 5 percent decrease in General Fund spending.

Historical Trend. Figure 1 shows expenditures from all state funds for judiciary and criminal justice programs since 1997-98. These expenditures 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. The figure shows General Fund expenditures for judiciary and criminal justice programs are projected to increase by $2.5 billion between 1997-98 and 2004-05, an average annual increase of 6 percent. General Fund expenditures increased during this period mostly due to (1) the state's assumption of primary responsibility for funding trial court operations enacted in 1997 and (2) increased labor costs to operate the state corrections system, as well as court-ordered expansions of inmate health and mental health services.

Combined General Fund and special funds spending is projected to increase by $3.4 billion between 1997-98 and 2004-05, an average annual increase of 7 percent.

Spending by Major Program

Figure 2 shows expenditures from all sources for the major judiciary and criminal justice programs in 2002-03, 2003-04, and as proposed for 2004-05. 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. On a percentage basis, the largest overall reduction in these major departments is proposed for the Youth Authority, followed by CDC. The smallest reduction is proposed for the Department of Justice.

Figure 2

Judiciary and Criminal Justice Budget Summary

2002-03 Through 2004-05
(Dollars in Millions)




Proposed 2004-05

Change From 2003-04




Department of Corrections

General Fund






Special funds






Reimbursements and
federal funds












Department of the Youth Authority

General Fund






Reimbursements and
federal funds












Federal Offset for
  Undocumented Felons






Trial Court Funding

General Fund






Special funds






County contribution













General Fund






Other funds and












Department of Justice

General Fund






Special funds






Federal funds












Major Budget Changes

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

Figure 3

Judiciary and Criminal Justice
Proposed Major Changes for 2004-05
All Funds





Department of Corrections


$5.3 billion





$446.7 million







–     $400 million for unallocated reduction



–     $56 million from a projected decrease in inmate population





+     $29 million for increased costs in inmate health care



+     $67 million from a projected increase in parole population



+     $100 million for 1,200 “relief” positions



+     $852 million to adjust for one-time federal funds






Department of the Youth Authority


$378.1 million





$56.7 million







–     $44 million from closure of youth correctional facilities






Trial Court Funding


$2.2 billion





$37.1 million







–     $59 million from unallocated reduction



–     $30 million General Fund loan from Court Construction Fund








$373.8 million





$8.3 million







–     $9.8 million unallocated reduction






Department of Justice


$622 million





$10.2 million







–     $3 million unallocated reduction



–     $2.5 million from expiration of Plata lawsuit


Budget Proposes Major Spending Reductions and Policy Changes, but Few Details. The budget proposes substantial reductions to judiciary and corrections programs. However, it does not provide specific details on how most of the savings will be accomplished in 2004-05. Instead, it proposes large unallocated reductions as a placeholder for proposals that will be submitted to the Legislature as part of the May Revision, including $400 million in corrections cuts, and nearly $70 million in reductions to the courts ($59 million from the trial courts and $8.5 million from the judicial branch). This represents the second round of one-time unallocated reductions to the courts in the last two years.

The budget also proposes significant policy changes in the Youth Authority, including reducing the age jurisdiction of the department, and authorizing the transfer of certain juveniles to the adult prison system. At the time this analysis was prepared, the details of these proposals had not been provided to the Legislature.

Corrections Budget Highly Dependent on Timely Implementation of Changes. The budget relies on population-related savings from a series of recent parole policy changes aimed at reducing the number of nonviolent inmates. Because of this, the budget projects the prison population will drop by more than 10,000 by June 30, 2005. The CDC has already experienced some minor delays in implementing these changes. Continued delays could substantially erode a key piece of the budget solution for the current and budget years.

More Corrections and Court Spending to Come. The budget does not include funds to cover the costs associated with delays in the implementation of parole and other policy changes. It also does not include funds to implement the parole revocation process changes required by the Valdivia lawsuit. (See our analysis on Valdivia in the "Crosscutting Issues" section of this chapter.) In addition, some corrections savings included in the budget may be overstated such as the savings from the closure of the Fred C. Nelles Youth Correctional Facility in Whittier. Finally, the budget does not include funding for some reoccurring expenses in the court budget, including amounts for negotiated salary increases, court security, and increased county charges for services they provide to the courts. The administration indicates that budget augmentations for these and other proposals will be submitted to the Legislature in the spring, or included by way of executive order in the case of court salary adjustments. 

Court Fee Revenue Lower Than Projected. The 2003-04 Budget Act authorized increased court fees to ease the impact of budget reductions. The fees are now expected to generate nearly $30 million less than originally projected, thereby potentially placing the courts at some risk for budgetary shortfalls in 2003-04. However, since the lower-than-anticipated revenue is partially explained by typical first-year implementation delays, fee revenue can reasonably be expected to increase in the budget year, as the courts will have a full 12 months of collections. In reviewing the court budget, the Legislature should closely monitor these revenues, as this may ultimately determine the level of resources needed in the budget year to fund core court services.

State Continues to Borrow From Court Facilities Construction Fund. The 2003-04 Budget Act borrowed $80 million from the State Court Facilities Construction Fund to reduce General Fund expenditures for the courts in the current year. The Governor's budget proposes to borrow another $30 million from this fund in 2004-05. This second withdrawal will likely result in continued deferral of needed court facility improvements, which would result in further erosion of some facilities and thus increased future costs to repair such facilities.

County Probation to Lose TANF Funds. The Governor's budget allows the Temporary Assistance to Needy Families (TANF) block grant for county probation services to sunset. Currently, these federal funds ($134.3 million) support juvenile residential treatment facilities, including juvenile camps, forestry camps, and ranches. Under the Governor's proposal, these funds will be used in the California Work Opportunity and Responsibility to Kids Program or offset General Fund expenditures in other social services programs. The budget also proposes to continue the Citizens' Option for Public Safety (COPS) and Juvenile Justice Crime Prevention Act (JJCPA) grant programs at the reduced level of $100 million each. We examine this proposal and offer recommendations for legislative consideration in the "Crosscutting Issues" section of this chapter.

Return to Criminal Justice Table of Contents, 2004-05 Budget Analysis