LAO 2004-05 Budget Analysis: General Government

Analysis of the 2004-05 Budget Bill

Legislative Analyst's Office
February 2004

Department of the Youth Authority (5460)

The Department of the Youth Authority is responsible for the protection of society from the criminal and delinquent behavior of young people (generally ages 12 to 24, average age 19). The department operates training and treatment programs that seek to educate, correct, and rehabilitate youthful offenders rather than punish them. The department operates ten institutions, including two reception centers/clinics and four conservation camps. In addition, the department supervises parolees through 16 offices located throughout the state.

Budget Proposal

The Governor's budget proposes total expenditures of $378.1 million for the Youth Authority in 2004-05. This is $56.7 million, or about 13 percent, below estimated current-year expenditures. General Fund expenditures are proposed to total $316.7 million in the budget year, a decrease of $44.7 million, or 12 percent, below expenditures in 2003-04. The department's proposed General Fund expenditures include $34 million in Proposition 98 education funds. The Youth Authority also estimates that it will receive about $59.4 million in reimbursements in 2004-05. These reimbursements primarily come from fees paid by counties for wards sent to the Youth Authority.

The decrease in General Fund spending in the budget year is the result of proposed closures of youth correctional facilities, as well as a projected decrease in the institution and parole populations. 

Who Is in the Youth Authority?

There are several ways that an individual can be committed to the Youth Authority's institution and camp population, including:

Characteristics of the Youth Authority Wards. Wards in Youth Authority institutions are predominately male, 19 years old on average, and come primarily from Southern California. Hispanics make up the largest ethnic group in Youth Authority institutions, accounting for 49 percent of the total population. African Americans make up 30 percent of the population, whites are 16 percent, and Asians and others are approximately 5 percent.

Facility Closures

The number of youthful offenders in state correctional facilities has declined significantly and continues to decline. Consequently, legislation has been enacted requiring the Youth Authority to close four of its correctional facilities by 2007.

In this piece, we discuss two issues: (1) the population assumptions included in the Governor's budget, including the potential impact of the budget proposals on the ward population and (2) the facility closures currently underway, the proposed closure of an additional facility, and the fiscal and programmatic impact of the closures to date.


Ward and Parolee Populations Continue to Decline

We withhold recommendation on the population assumptions included in the budget pending receipt of the May Revision. We recommend that the administration provide, as part of its updated spring population projections, an estimate of the impact of the Governor's policy proposals on the ward population.

The number of youthful offenders at the Youth Authority has declined significantly, dropping from a high of nearly 10,000 wards at the end of 1995-96 (June 1996) to less than 4,900 a the end of 2002-03 (June 2003). This decline is the result of a number of factors, including a significant decrease in the rate of juvenile arrests for violent offenses, as well as changes in state law affecting how much counties pay to send certain wards to the Youth Authority. (Please see our 2002-03 Analysis, page D-48, for a detailed discussion of county sliding scale fees paid to the state by counties.) Figure 1 shows the Youth Authority's institutional and parolee populations from 1995-96 through 2007-08.

Projected Versus Budgeted Population. The Youth Authority projects that the institution population will continue to modestly decline, falling from 4,055 wards at the end of the current year to about 3,800 by the end of the budget year, and then reaching 3,700 wards by the end of 2007-08 (June 2008). The Youth Authority similarly projects a decline in the parole population, with this population decreasing from 4,150 by the end of the current year to 3,925 by the end of the budget year, and then decreasing further to about 3,600 by the end of 2007-08 (June 2008).

The Governor's budget provides funding for 48 fewer wards than the Youth Authority projects for 2003-04 and about 240 fewer wards for 2004-05. This seems reasonable given that the department's projections historically have been higher than actual population levels. The budget provides full funding for the projected parole population.

Impact of Governor's Proposals on Ward Population

The budget contains a number of proposals which could have an impact on the ward population. For example, it proposes legislation to (1) change the age jurisdiction of the Youth Authority from 25 years of age to 22 years of age and (2) enact sentencing reforms that would allow certain wards to be transferred to the adult prison system. The details of these policy proposals have not been provided to the Legislature and the budget assumes no budget year impact. However, we expect these changes would have the affect of decreasing the ward population. The budget also proposes to eliminate the TANF block grant, which—as we discuss in the "Crosscutting" section of this chapter—could have the opposite effect of increasing the ward population. None of these proposals would likely have a significant effect on the ward population in the short term, but should be considered in making budgetary decisions affecting the state's long-term interests, such as whether to close additional youth correctional facilities.

Spring Projections Should Reflect Governor's Proposals. We withhold recommendation on the budget's population assumptions pending receipt of the May Revision budget proposal and population projections. This will provide a couple months of additional actual population data, as well as an opportunity to examine the potential impact of some of the Governor's budget proposals on the future ward population. We recommend the Legislature direct the Youth Authority to incorporate into its spring population projections an estimate of the impact of the Governor's policy proposals on the Youth Authority's future population.

Governor's Budget Accelerates Closures

As a result of the substantial drop in the number of wards, Chapter 1124, Statutes of 2002 (AB 3000, Oropeza), required the Youth Authority to develop a consolidation plan and to close three of its facilities by June 2007. Chapter 158, Statutes of 2003 (AB 1758, Oropeza), subsequently required the department to close an additional facility.

Figure 2 shows the correctional facilities that have been or are in the process of closure, the anticipated closure date, and the savings associated with each closure. As the figure shows, the budget plan includes closing a total of 3.5 facilities (the partial closure relates to the male portion of the Ventura facility), as well as a conservation camp and excess living units, by 2005 rather than by 2007, as current law requires. The budget assumes current-year savings of $11 million, and budget-year savings of $52.1 million from the closures, including $25.9 million from closing the Nelles facility.

Figure 2

Fiscal Impact of Closing Youth Authority Facilities

(In Millions)


Completion Date




Karl Holton

September 2003




March 2004



Northern California
Reception Center

March 2004



Fred C. Nelles

March 2005


Mt. Bullion Conservation Camp

March 2005


Eight accelerated
living units

July 2004







a  The male portion only.

Nelles Closure Has Merit

We recommend approval of the proposed closure of the Fred C. Nelles Youth Correctional Facility because of the substantial decline that has occurred in the ward population and the resulting excess capacity in the system. We further recommend that the department provide at the time of budget hearings a revised estimate of the savings from the closure of this facility, as well as information on the impact of the Nelles closure on the population levels in open living units at the remaining institutions.

Nelles Facility Is Old, Expensive to Maintain, and Has High Operating Costs. Built in 1945, Nelles (located in Whittier) is the oldest Youth Authority facility in California. To renovate and upgrade this facility would be expensive. The department has identified over $70 million in needed deferred maintenance and major capital outlay costs, which is higher than any other institution. In addition, Nelles has the highest operating costs—$56,000 per capita last year—of any Youth Authority institution. Also, it has been noted that the facility's location in central Whittier, particularly its close proximity to residential and commercial property, poses a potential public safety concern. Because Nelles is in close proximity to two other Youth Authority facilities (within 50 miles), the difficulty of transferring staff and wards from the closure of Nelles would be somewhat mitigated.

Other California Youth Authority Facilities Could Absorb Nelles Ward Population. Our examination of the Youth Authority's bed capacity statewide indicates that there are sufficient beds at the other institutions to absorb the roughly 400 wards currently residing at the Nelles correctional facility. Total ward population is projected to drop to 3,800 by the end of the budget year, and continue to decline to 3,700 by the end of 2007-08. Excluding the beds at the Nelles facility, the Youth Authority will have a total design capacity of 5,300 beds, which means there will be excess capacity of more than 1,500 beds by the end of 2004-05—more than enough to absorb the roughly 400 wards at Nelles. Some of these beds will be required for special programming, but even after accounting for this factor, there should be more than adequate beds to close Nelles.

Savings From Closure May Be Overstated. According to the department, the savings estimate of $25.9 million currently included in the budget from closing Nelles may be overstated. This is because, in part, as we indicated above, the budget assumes a smaller ward population than projected by the Youth Authority. If the Youth Authority's projection of slightly higher population proves to be more reasonable, additional funds may be needed to house wards transferred from Nelles.

Sale of the Land Could Generate Significant New Revenue. The closure of Nelles has the potential to provide the state with surplus property funds of an unspecified amount at some time in the future. According to the Youth Authority staff, the land is valued in the several tens of millions of dollars. Closing the facility in Whittier could also generate revenues for local government depending on its final use. The city currently generates no property taxes on the land because it is state property. However, if the state were to sell the land to a nongovernmental entity, the city would be able to collect property taxes and potentially other revenues depending on its ultimate use.

It should be noted that the Governor's budget requests $3 million in the Department of General Services and two positions for work related to the closure of Nelles and potentially other Youth Authority facilities. (See our analysis regarding this request in the "General Government" chapter of this Analysis.)

Impact of Closures on Wards and Staff. It is our understanding, based on discussions with the Youth Authority, that neither the closure of Karl Holton nor the closures currently in progress have caused significant disruptions in ward programming. This is because the Youth Authority was able to successfully match the program needs of the wards with programs offered at nearby institutions. In addition, the Youth Authority reports that it has been able to avoid layoffs through the creation of a permanent intermittent employee pool. Although closure of the Northern California Reception Center presented a challenge because it had the only health clinic in the northern part of the state, the Youth Authority addressed this issue by relocating just the clinic to the Preston facility in Ione, California. As for the proposed closure of Nelles, the Youth Authority expects the transfer and relocation impact on wards and staff to be somewhat mitigated by its proximity to nearby facilities and through continued use of the permanent intermittent employee pool.

Receiving Facilities Will Experience Higher Ward Population Levels. The institutions that receive wards from the closed facilities will accordingly experience higher population levels. According to Youth Authority staff, absent funding to open previously closed living units, the population levels in some of the open living units will exceed the design capacity, thereby making for a less secure environment that is less conducive to effective treatment and programming. However, given the projected continuing decline in the ward population, this concern may be somewhat mitigated. However, at the time this analysis was prepared, the Youth Authority could not provide information on the projected level of crowding in open living units after the closure of the Nelles facility. We recommend that the Youth Authority provide this information to the Legislature before budget hearings.

Should Youth Authority Be Required to Close Another Facility?

Based on our analysis of the number of available beds systemwide, and the projected decline in the ward population, it appears that the state could potentially close another state youth correctional facility. However, several issues need further examination and consideration before the Legislature could make a decision on closing another facility.

First, the net impact of several of the Governor's proposals on the ward population is unknown. On one hand, the budget proposal to change the age jurisdiction of the Youth Authority could decrease the ward population over time. On the other hand, as we discuss earlier in this analysis, the proposal to allow the TANF block grant for county probation to expire could result in increased commitments to the Youth Authority.

Second, the Youth Authority consolidation plan prepared for the Legislature did not envision closing more than three facilities. Therefore, the full potential impact of additional closures is unknown. For example, it is not clear whether all wards could obtain needed treatment services at the remaining institutions if additional facilities were closed. Some facilities offer specialized treatment services that are not offered elsewhere. Additional closures may also lead to a distribution of beds in the northern and southern parts of the state that could require many juveniles to be located further away from family members. The Youth Authority has been able to avoid these issues so far, but they become increasingly more difficult to avoid as additional facilities are closed.

We recommend the Legislature direct the Youth Authority to report at budget hearings on opportunities for closing additional facilities, as well as on the potential impact of the Governor's proposals on its future population.

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