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Analysis of the 2005-06 Budget BillLegislative Analyst's Office
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What Should the Legislature Consider When Reviewing the Administration's Proposals to Eliminate Boards and Commissions and Reorganize the Youth and Adult Correctional Agency? Would the Plans Reduce State Costs? |
SummaryOn January 6, 2005, the administration released its plans to eliminate 88 boards and commissions and to reorganize the Youth and Adult Correctional Agency. This piece provides an overview of the reorganization process. Then for each of the plans, we provide an assessment of its fiscal effect and raise key issues and considerations. For instance:
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On August 3, 2004, the California Performance Review (CPR) released its report on reforming California's state government, with the aim of making it more efficient and more responsive to its citizens. One of the major components of the CPR report was a reorganization plan for all of state government. On January 6, 2005, the Governor submitted two reorganization plans that are based upon the work of CPR:
In this piece, we:
State law provides a specific process for the Governor to propose reorganizations to the Legislature. From 1968 to 2004, various Governors submitted 29 reorganization plans through this process. The Legislature rejected 11 of these plans, and 18 plans went into effect. Below, we describe the details of the process as it will apply to the Governor's two reorganization plans submitted earlier this year.
Timeline. Figure 1 provides the timeline for the reorganization process, beginning with the Governor's submittal of the plans to the Little Hoover Commission on January 6, 2005. In total, a reorganization plan can take about 90 days to become effective. As of February 14, 2005, the Governor had not formally submitted the plans to the Legislature—likely extending the time period beyond 90 days.
Goals. State law encourages the Governor to seek reorganizations which reduce expenditures, increase efficiency, and eliminate duplications of effort.
Little Hoover Commission. As part of the process, the Governor submits any plans to the Little Hoover Commission for review and public hearings. The commission has 60 days to report any findings to the Governor and the Legislature.
Civil Service Transition. Plans must provide for the transfer of existing state employees from their original department to a new entity carrying out the same function.
Legislative Review. From the time the Governor formally presents a reorganization plan to the Legislature, the statute provides for a 60-day legislative review period and calls for policy committees in each house to issue a report on a plan. (By statute, the Legislature's scheduled spring recess does not count as part of the 60 days.) A plan goes into effect after the 60-day period unless the Legislature takes action to reject it. Either house can reject a plan by passing a resolution by a majority vote. The vote is "yes" or "no"—the plan cannot be amended by the Legislature.
Implementing Legislation. Under the process, Legislative Counsel is responsible for drafting statutory language to implement the reorganization plan. The reorganization authority provides that the plan can go into effect even if this statutory language is not adopted by the Legislature.
In reviewing the two reorganization plans, there are many considerations for the Legislature. In the past, when reorganization plans have not met its needs, the Legislature has requested amended plans from the administration or used the regular statutory process to reorganize state government. Figure 2 lists some of the broad criteria that we would suggest the Legislature use in evaluating any proposed reorganization. Below, we describe the two plans in detail and address how the plans meet these criteria.
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Figure 2 Criteria for Considering the |
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As the Legislature considers the reorganization proposals, it may want to consider the following questions to help determine a proposal’s merits. |
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ü Effectiveness. Would the reorganization make the programs more effective? Would the public receive better services as a result of the reorganization? |
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ü Accountability. In the current and the new structures, who is responsible for the program’s outcomes? Is the new structure likely to improve program accountability to the public? |
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ü Oversight. Will the new structure provide for effective, independent oversight by the executive and legislative branches? |
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ü Efficiency. Would the reorganization improve the use of limited resources? Are there reasons to believe that the programs can be administered more efficiently? Do existing programs exhibit duplication of effort or lack of coordination? |
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ü Other Options. What is the problem that is being addressed? Is a reorganization the best approach to solve that problem? Could improved leadership, changes in policy, better coordination between departments, or other solutions provide a better result? |
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ü Implementation. Do the expected long-term benefits outweigh the short-term costs and disruptions from the implementation of the reorganization? Will the public experience a disruption in services? Does the implementation need to occur now, or can it be phased in over time? |
Most state functions are carried out by departments. These departments have directors appointed by and responsible to the Governor. Outside of these departments, the state also has hundreds of boards, commissions, and task forces which serve a variety of roles. Boards and commissions are generally more autonomous than departments. Board members and commissioners are appointed by a variety of individuals—including the Governor, legislative leaders, and constitutional officers. Members may be appointed for a fixed length of time (whereas department directors serve at the pleasure of the Governor).
In its first reorganization plan, Governor's Reorganization Plan 1 (GRP-1), the administration proposes to eliminate 88 boards and commissions. Below, we describe the components of the reorganization plan, comment on its likely fiscal effect, and provide some key considerations for the Legislature. A more detailed discussion of the reorganization plan's effects on energy and recycling policy can be found in the Analysis of the 2005-06 Budget Bill (please see the "Resources" chapter).
The reorganization plan would affect a broad array of boards and commissions. These entities perform a wide range of functions—including advising the Legislature and Governor, allocating funds, hearing appeals of departmental decisions, and licensing and regulating professions. We classify the proposal into six categories below, based on what would happen to them under the Governor's proposal (summarized in Figure 3).
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Figure 3 GRP-1 Boards and Commissions Proposed for Elimination |
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Currently Dormant |
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Advisory Committee on Managed Health Care |
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Bipartisan California Commission on Internet Political Practices |
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Brown vs. Board of Education of Topeka Advisory Commission |
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Campus Sexual Assault Task Force |
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Child Development Policy and Advisory Committee |
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Commission of the Californias |
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Consumer Power and Conservation Financing Authority |
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Electronic Commerce Advisory Council |
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Commission on Veterans' Cemeteries |
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Heart Disease and Stroke Prevention and Treatment Task Force |
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Heritage Preservation Commission |
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Industrial Welfare Commission |
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Interagency Aquatic Invasive Species Council |
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Mexican American Veterans' Memorial Beautification and Enhancement Commission |
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Public Library Construction and Renovation Board |
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Racial Profiling Panel |
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Small Business Reform Task Force |
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Vietnam Veterans Memorial Commission |
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Water Commission |
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New Office of Higher Education and Financial Aid |
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Loan Advisory Council |
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Postsecondary Education Commission |
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Student Aid Commission |
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New Employment and Benefits Appeals Board |
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Occupational Safety and Health Appeals Board |
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Unemployment Insurance Appeals Board |
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Workers' Compensation Appeals Board |
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Absorbed Into Department of Consumer Affairs |
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Acupuncture Board |
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Alarm Company Operator Disciplinary Review Commission |
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Architects Board |
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Board for Geologist and Geophysicists |
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Board of Accountancy |
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Board of Barbering and Cosmetology |
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Board of Behavioral Sciences |
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Board of Guide Dogs for the Blind |
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Board of Occupational Therapy |
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Board of Optometry |
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Board of Pharmacy |
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Board of Pilot Commissioners |
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Board of Podiatric Medicine |
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Board of Professional Engineers and Land Surveyors |
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Board of Psychology |
Many Dormant Entities. For 19 of the entities, GRP-1 would have no significant effect because the boards are currently performing no or minimal activities. For instance, in the cases of the Child Development Policy and Advisory Committee and the Industrial Welfare Commission, the current-year budget provides no funding for these entities and they are not currently functioning. In other cases, such as the Small Business Reform Task Force, the entities have already completed their statutory tasks, such as writing a report. For these 19 entities, the administration basically proposes a "clean-up" function—such as deleting references in state law.
Office of Higher Education and Financial Aid. The administration proposes a new Office of Higher Education and Financial Aid to handle higher education policy and financial aid matters—by merging the Loan Advisory Council, the Student Aid Commission, and the California Postsecondary Education Commission. The Governor would appoint the office's executive director, subject to Senate confirmation.
Employment and Benefits Appeals Board. The new Employment and Benefits Appeals Board would provide a consolidated board to hear appeals currently heard by three entities—the Occupational Safety and Health Appeals Board, the Unemployment Insurance Appeals Board, and the Workers' Compensation Appeals Board. The new board would consist of nine full-time members appointed by the Governor and subject to Senate confirmation.
Eliminate Consumer Affairs Boards. The Department of Consumer Affairs (DCA) is responsible for promoting consumer protection while supporting a fair and competitive marketplace. The department includes 27 semiautonomous regulatory boards, commissions, and committees that regulate various professions. These boards are comprised of appointed consumer and industry representatives. In addition, the department regulates additional professions through 11 bureaus and programs, which are statutorily under its direct control. (The Governor's proposal would not affect these 11 programs.) The Governor's reorganization plan would eliminate 34 consumer boards and commissions and transfer their functions into DCA:
Other Functions Absorbed. The Governor's plan would transfer the functions currently performed by 20 independent boards and commissions into various state departments. A majority of these boards are in the resources area. Most of the boards are advisory in nature. A number of the boards, however, perform administrative functions such as developing high speed rail for the state, or setting state policy such as the Board of Forestry and Fire Protection (BOF).
Elimination of Advisory Boards. The Governor's plan would eliminate nine entities and their current advisory functions. For instance, the Inspection and Maintenance Review Committee evaluates the state's Smog Check program and recommends improvements to the Governor and Legislature.
The administration has not provided a comprehensive fiscal evaluation of its proposal. In some cases, savings estimates have been provided by the administration for individual components of the proposal. The Governor's budget, however, does not assume any savings from the implementation of the reorganization plan. In fact, the budget documents do not reflect the proposed elimination of the boards and commissions.
Savings From Members' Expenses. The reorganization plan would eliminate hundreds of appointed board members and commissioners. For nearly all of these boards and commissions, their members do not receive salaries. Instead, members receive various minimal payments to cover their expenses. The most common such arrangement is for a member to be paid $100 for each board meeting attended and to be reimbursed for actual expenses (primarily travel). Consequently, the administration has estimated roughly $10,000 in annual savings per entity for a number of these boards.
Only four of the boards and commissions proposed for elimination have full-time salaried members—the Integrated Waste Management Board (IWMB) and the three entities proposed to be consolidated into the Employment and Benefits Appeals Board. The elimination of the $114,000 in annual salaries and associated benefits of each of the six IWMB board members would save the state a total of about $1 million annually. Regarding the employment board, the existing boards have a combined 17 members. The Governor's proposed new board would have only nine members. The salary savings for these eight eliminated positions would save over $1 million annually.
A few boards currently have staff dedicated to meeting their members' needs. These types of positions could be eliminated along with board and commissioner members. It is unknown how many such positions could be eliminated. (In the case of IWMB, however, such savings could total about $1 million annually.)
Implementation and Transition Costs. The proposed reorganization could result in significant implementation costs, particularly in the short term. The Governor's budget does not include funding for these expenses, such as the costs for integrating data and budget systems and relocating offices. As an example, the recent closing of the Technology, Trade, and Commerce Agency cost millions of dollars in shutdown expenses—nullifying most of the savings for the first year. The Legislature should be aware of these types of implementation costs in making its decisions.
Potential for Efficiencies. In some instances, the reorganization plan identifies possible efficiencies the administration hopes to achieve. For instance, for the DCA boards, the administration aims to make administration and consumer outreach more streamlined. In addition, DCA might be better able to reallocate resources among multiple programs as dictated by workload. In contrast, since they administer individual programs, boards typically do not have the same degree of flexibility. It appears reasonable that these types of efficiencies could be achieved over time. To what extent this occurred, however, would depend primarily on executive leadership within state departments.
Savings Would Benefit Special Funds' Conditions. Most of the entities proposed for elimination are funded by a variety of special funds. Any long-term savings achieved, therefore, would principally benefit these funds. Any savings achieved would allow (1) the programs funded by these accounts to be expanded and/or (2) reductions in the fees paid (such as annual occupational license fees) to these accounts. Overall, we would not expect the plan to result in a significant amount of General Fund savings—likely less than $1 million annually.
State Costs for River Activities Could Increase. In at least one instance, the proposal may increase state-funded costs. Under current law, the Colorado River Board's membership includes various Southern California water agencies. The member agencies reimburse the board for the full cost of the board's operations, based on an annual contract. If the Colorado River Board were reorganized under the Department of Water Resources as proposed, the state might lose this source of reimbursement funding—$1.2 million in the 2005-06 proposed budget—thereby adding to state-funded expenditures. Although the board is proposed to be eliminated, most of these costs would continue—as staff would continue to perform functions related to the Colorado River.
Below, we outline some additional considerations specific to the boards and commissions reorganization plan that the Legislature may wish to consider when evaluating the plan.
Details Lacking. In our initial assessment of CPR's reorganization proposal (please see our August 27, 2004 publication), we noted that the proposal often lacked sufficient detail to evaluate whether a proposed consolidation would improve state government. To date, the administration's boards and commissions reorganization plan has not added a significant level of detail to the proposals. Consequently, it is difficult to know how new functions would be integrated into departments. Until the full details are put forth, drawing conclusions about whether a consolidation is advisable is difficult.
For instance, in the case of DCA, it is not clear whether the administration intends to group the transferred functions by program area or instead maintain them as separate offices within the larger department. Since many of the functions proposed for transfer are medical-related, the department could create a medical bureau which, over time, would have staff trained across multiple disciplines for licensing and investigative work. By having a broader perspective than individual boards, such an approach could offer improved state oversight of the entire medical field. In addition, the public would have a single point of contact for medical professions. In contrast, if the administration intends to maintain each board's function as a separate office, there would be far fewer opportunities for efficiencies. In addition, any existing problems with lack of coordination between boards would likely continue.
Simpler Solutions? In some cases, it appears that the administration has favored the elimination of boards even if simpler solutions exist to perceived problems. For example, the administration cites the benefits of developing a toll-free number for the consolidated consumer affairs boards. Yet, the department already has a toll-free number that provides—for all of DCA's boards and bureaus—documents via fax upon request and allows consumers to speak to an operator about complaints or questions. If the administration's goal is to improve telephone access, the existing phone system could be upgraded absent a reorganization.
Policy Rationales Lacking. In other cases, the administration has not put forward a policy rationale for its proposal. For instance, with regards to the employment appeals board, it is not clear what problem the administration is trying to address. If the administration believes board members are overpaid for the amount of work they perform, a simpler solution would be to reduce salaries. Another example is the Service Agency Advisory Committee, which advises the state on the regulation of weights and measures. It is not clear why the administration merges this entity into DCA. The CDFA, not DCA, is the state entity responsible for the regulation of these standards. A clear problem statement would help the Legislature evaluate whether the proposed solution makes the most sense.
Policy Expertise Lost? By having multiple members, boards can include experts in a policy field who offer a variety of policy perspectives. Departments, by comparison, generally reflect the single view of the ad ministration. Consequently, it is possible that the elimination of boards will reduce or eliminate the range of policy perspectives. The administration responds to this concern by noting that departments can utilize ad hoc advisory committees when necessary. Such an informal process could be effective. Future administrations, however, might not choose to use them.
Effects on Legislative Oversight Uncertain. The Legislature often has the ability to oversee a board's management through the nomination approval process. In other cases (such as the High Speed Rail Authority), the Legislature has the authority to appoint board members directly. Under the reorganization plan, the Legislature would lose the ability to review the nomination of program-specific board members. Instead the Legislature would only review the nomination of a department director.
Potential Conflicts of Interest. Some of the proposed reorganizations may create conflicts of interest within the resulting organization. For instance, in our discussion of energy-related consolidations in the 2005-06 Analysis, we note that the reorganization plan could threaten the ability of the state to effectively oversee the electricity market if the functions of the Electricity Oversight Board were transferred into the California Energy Commission.
A similar problem could develop if the State Mining and Geology Board's (SMGB) functions were transferred to the Department of Conservation (DOC). The SMGB assumes Surface Mining and Reclamation Act (SMARA) lead agency responsibilities when local lead agencies fail to administer and enforce the SMARA. (It is currently the lead agency for two counties and 16 cities.) In its current capacity, DOC exercises oversight and enforcement responsibilities over lead agencies. If SMGB's functions were transferred to DOC, the same department—DOC—would have both oversight and enforcement responsibilities. To correct these potential conflicts, it may be possible to develop "firewalls" to prevent inappropriate influence within the organization. The administration's proposal, however, lacks sufficient detail to determine whether these issues would be addressed sufficiently, if at all.
Uncertain Impact on Public Access. Many of the boards and commissions that have been proposed for elimination provide extensive public oversight of and input into the decision making process. For instance, BOF is responsible for developing the general forest and fire protection policy of the state and adopting the forest practice rules which govern timber harvesting in the state. The BOF—which would be consolidated into the Department of Forestry and Fire under the reorganization plan—actively involves the public in crafting these policies and rules. On the other hand, departmental decision making typically does not involve this level of public input.
In response to the concern that the reorganization would limit public input, the administration asserts that state law provides for public comment on any changes in rules and regulations (through the Administrative Procedures Act). In addition, the administration states its intention to utilize public workshops and the Internet to inform the public and gather public input. The board system guarantees the public access since meetings are subject to the Open Meetings Act. On the other hand, transferring programs to within departments would make input more dependent on each department's chosen policies.
In February 2004, the Corrections Independent Review Panel (CIRP) was established to conduct a broad examination of California's correctional system and make recommendations to improve its operations. While CIRP made hundreds of recommendations regarding various aspects of the correctional system, it recommended that reorganization of the youth and adult correctional agencies be given the highest priority. The Governor's proposed reorganization incorporates many of CIRP's recommendations.
The administration's proposed "overhaul" of the correctional system is contained in two separate but related documents. These are the Governor's Reorganization Plan 2, Reforming California's Youth and Adult Correctional System (GRP-2), and the Youth and Adult Correctional Agency Strategic Plan (the YACA Strategic Plan). The GRP-2 primarily focuses on proposed organizational changes, while the YACA Strategic Plan primarily focuses on policy and operational changes within the organization that are intended to support the goals of increased accountability, efficiency, and effectiveness in the delivery of correctional services.
In this analysis, we (1) provide an overview of the proposed major policy and organizational changes; (2) evaluate the plan (both GRP-2 and the YACA Strategic Plan) against its stated objectives of increased efficiency, accountability, and effectiveness; and (3) raise issues for legislative consideration. It is not our intent to evaluate every aspect of the plan; rather, our intent is to focus on key aspects of the plan that are important to its overall goals.
The GRP-2 focuses on consolidating administrative functions to eliminate duplication of effort and improve the delivery of services. Specifically, the plan proposes to:
Similar to our discussion of the boards and commissions, the Governor's budget does not reflect the proposed reorganization of YACA nor identify any of its fiscal effects. Our analysis first assesses whether, and to what extent, the GRP-2 and the YACA Strategic Plan would improve the efficiency of California's youth and adult corrections system and result in savings.
The administration asserts that GRP-2 will increase government efficiency by enabling the state to provide higher level of services at a lower cost. Our analysis indicates that (1) short-term savings from consolidating departments are likely to be more than offset by the upfront costs of implementing the plan and (2) the budgetary benefits of the proposed reorganization are not likely to be realized until later years.
Plan Could Cost in the Short Run. The administration states that one of the fiscal benefits of the plan is that merging the youth and adult correctional departments and boards would result in "economies of scale" and create an opportunity to "leverage" its expanded population to obtain lower prices on the purchase of goods and services. We agree there would be some savings from economies of scale. For example, combining the budget and accounting offices of the various departments and boards probably creates an opportunity to eliminate some positions without disrupting the fiscal operation of the new department. However, as regards leveraging, we do not believe this will result in significant savings for two reasons.
First, CDC is already a large operation—with 47,000 employees and over 165,000 inmates and 110,000 parolees. As such, state costs for many goods and services provided by the department already reflect savings from economies of scale. Therefore, increasing its already large population by a relatively small amount (7,000 juveniles—3,100 wards and 3,800 juvenile parolees) would probably yield minimal savings. Second, the Youth Authority population is declining, and would decline further under the administration's proposal to shift the responsibility for providing some juvenile justice services from the state to the local governments. Such a shift would make it even less likely that there would be any significant short-term savings from the consolidation.
Whatever minimal level of administrative savings is achieved from the GRP-2 would likely be more than offset by the upfront costs of the reorganization. Based on our discussions with YACA staff, it is our understanding that in the short term, the reorganization would require moving staff and related office furniture and computer equipment. Additionally, YACA staff advised us that the new department would probably require a new telephone system and space modifications. The plan does not specify how many staff will be required to move offices or change locations. However, for a large reorganization, such as proposed in the GRP-2, these upfront costs could easily run into a few million dollars. For this reason, we think the GRP-2 could potentially result in net costs in the short run.
Plan Could Result in Major Savings in Future Years. In the long term, however, we think the administration's proposal has the potential to result in major state savings. For example, the plan envisions a correctional system that relies more on rehabilitation and treatment programs as a means of increasing public safety. Academic research shows that well-designed education and training programs can reduce inmate recidivism. California currently spends hundreds of millions of dollars housing parolees returned to custody for relatively minor violations because there are only a limited number of education, training, and treatment programs and available slots for inmates. Therefore, to the extent that the administration's goal of providing more and better rehabilitation is achieved, and there is a lower rate of recidivism, for example, the plan would potentially result in major state savings from a reduced prison population. We note that there would be costs to implement effective programs and the GRP-2 does not provide an estimate of such costs. Nonetheless, based on independent evaluations of the cost-effectiveness of various inmate programs, we believe that in the long run these costs would likely be more than offset by population savings.
Efficiency Without Reorganization. We note, however, that some of these efficiency savings would result from changes already adopted by the Legislature. This is because, in recent years, the Legislature and the administration have already adopted several policy changes aimed at making the correctional system more efficient. In particular, legislation was enacted requiring the Department of General Services and CDC to take steps to reduce pharmacy costs. In addition, parole policy changes were adopted to reduce the number of nonviolent inmates who return to prison for low-level offenses. Also, more than 1,000 positions were established to reduce the department's reliance on overtime. To the extent these changes are implemented, it should reduce CDC operating costs.
In addition to these actions, there are further opportunities to achieve efficiencies that do not require agency reorganization. For example, CDC could use lower cost noncustody staff to perform certain tasks that are now performed by custody staff, such as administrative work at headquarters. Additionally, for certain inmates the department could implement "disciplinary confinement" strategies that are less costly than administrative segregation. (For more information on these options, please see the "Judiciary and Criminal Justice" chapter in our companion document, Analysis of the 2005-06 Budget Bill.)
In the sections that follow, we outline key issues to assist the Legislature with its consideration of GRP-2. We first examine whether the plan would improve the accountability and effectiveness of the system. We then discuss the proposed mission of the new CDC-R.
The reorganization plan includes a number of proposals aimed at improving accountability of the state's criminal justice system. For example, the GRP-2 would place the entire system under the direction of a single individual. In addition, the YACA Strategic Plan proposes to enhance training and establish a new employee evaluation system. It also proposes to evaluate programs for effectiveness. Our analysis indicates that the plan would increase accountability at the executive management level. However, due to lack of information, it is unclear how the plan would improve accountability throughout the correctional system.
Greater Accountability at the Top of the Organization. The GRP-2 would increase accountability at the highest levels by placing responsibility for the various components of the state corrections system with one appointed official rather than with several appointed officials as under the current structure. In doing so, it establishes clearer lines of authority and responsibility; thus, eliminating potential uncertainty about whom at the executive level is responsible for successes or failures within the state corrections system. It is unclear, however, how the reorganization plan would affect accountability in the prisons (or in the community for parole), mainly because the plan focuses almost exclusively on structural changes at the executive level. Except for eliminating Senate confirmation of wardens, the GRP-2 does not appear to change the organizational structure "on the front line" where most staff work and where most services (custodial and rehabilitative) are delivered. We discuss this issue in more detail later in this analysis as it relates to implementation of the new department mission.
Systemwide Accountability Will Depend on Details. Among other things, the YACA Strategic Plan proposes to establish an employee evaluation system that "includes clear standards for employee accountability and performance metrics." We think that employee evaluations can be an effective tool for improving accountability at all levels of an organization. We note, however, that employee evaluation systems are most effective when the performance measures are aligned with the organization's mission and when compensation is tied to performance. A correctional "model" that places equal emphasis on custody and rehabilitation, such as that proposed by the administration, should have an evaluation tool that measures employee performance on both of those duties. For example, parole agents could be evaluated based, in part, on the percentage of parolees on their caseload who are employed. Medical escort officers could be evaluated on their effectiveness in getting inmates to medical appointments as scheduled. The YACA Strategic Plan does not provide this level of detail. Without details on the administration's proposed employee evaluation system, the Legislature cannot assess the merits of this particular aspect of the YACA Strategic Plan, which directly relates to the level of accountability on the front line.
Would the Plan Improve Legislative Oversight? The plan includes a number of features that could improve legislative oversight. For example, the YACA Strategic Plan proposes to develop and implement "comprehensive" information systems. Due to the existing outdated information technology and the lack of emphasis on program outcomes, the youth and adult correctional departments often cannot provide information that is useful to the Legislature in its oversight role. If designed properly, the information systems proposed in the plan could, for example, enable the department to provide detailed information to the Legislature regarding its (1) use of resources, (2) progress in implementing legislative priorities, and (3) program outcomes. Based on this, we concluded that the plan has the potential to improve legislative oversight. It is important to note, however, that under the plan it would be five years (2010) before these comprehensive systems are in place.
The GRP-2 and the YACA Strategic Plan lack the three key ingredients that would enable the Legislature to evaluate the plan's potential effectiveness. These are (1) measurable program goals, (2) a baseline assessment of where we are today in relation to those goals, and (3) detail about how to get from here to there. In fairness, because the plan attempts to address such a broad array of issues, providing this level of detail probably was not possible within the given timelines. Nonetheless, the Legislature has the opportunity to work with the administration to more clearly define program goals and performance measures.
Although certain key information is missing from the YACA Strategic Plan, such as estimates of costs and specific program goals, it represents a comprehensive strategy for changing the state's corrections system within five years. This includes implementing (1) the new organizational structure, (2) a "workforce excellence" plan, (3) a comprehensive information technology system, (4) expanded inmate and parolee programs, and (5) a managed care inmate health delivery system.
Some of these changes are already underway because of recent legislative actions and court mandates. However, we think the plan is likely to experience delays due to staffing limitations. Specifically, there are a number of significant existing projects that are likely to compete for time and resources that would otherwise be used to implement the plan. Examples of existing projects include the roll out of the Plata settlement agreement (related to inmate health care) and compliance with the Farrell v. Allen settlement agreement (related to conditions of confinement in Youth Authority institutions). We discuss additional issues that are likely to delay implementation of the plan later in this analysis.
Current and Proposed Expenditures Weighted Toward Security. Some corrections experts have characterized California's prison system as a security-oriented model as opposed to a rehabilitative model. One way to assess whether this is the case is to compare the department's expenditures for security functions to its spending for rehabilitation functions. Figure 4 shows total spending for CDC and Youth Authority rehabilitation and treatment programs, as compared to spending on security (or custody functions). (It also shows the effect of the Governor's proposed $95 million reduction in inmate and parole services in 2005-06.)
As Figure 4 shows, spending for security—custody staff in the institutions—is much greater than spending for inmate, ward, and parolee rehabilitation and treatment programs. This largely reflects a comparison of staff costs for custody functions in the institutions and on parole to staff and contract costs for academic and vocational education, substance abuse treatment, and mental health services.
The YACA Strategic Plan represents a significant departure from the current way of doing business. Among other things, the plan proposes to establish offender risk and needs assessments, "evidence-based" programs, and a classification system that rewards inmate and ward programming. We note that YACA has already administratively adopted a new vision and mission statement that places emphasis on "crime prevention" and "reintegration."
Balancing Custody and Rehabilitation Will Take Time. Given CDC's historical focus on custody and security, we think the administration will face many challenges in its effort to make California's prison system more rehabilitation oriented. Changing the name of CDC and its mission is a first step, but it is of relatively minor importance compared to the tasks that lie ahead if the department is to realize its goal of providing better treatment services. It will require a change in the organizational culture, changes in policies and procedures aimed at maximizing prison security, and involve some risk. The five-year YACA Strategic Plan does not appear to account for these issues. Sorting through all of this and making tradeoffs that support the department's new mission will take time.
Proposed Organization Raises Profile of Inmate Programs. The proposed organizational structure appears to place a higher priority—at the executive level—on inmate programs. Under the current CDC organizational structure, the Institutions Division manages and oversees both inmate programs and prison operations. In contrast, under the proposed reorganization, management and oversight of inmate and ward programs would be the sole responsibility of a Chief Deputy Secretary who reports directly to the Secretary. This should reduce the likelihood that programs "take a back seat" to prison operations. It should also improve the Secretary's oversight and control of resources for inmate and ward programs. On the other hand, the plan does not appear to provide the management infrastructure required to actually implement its vision as discussed below.
Infrastructure Needed to Support Rehabilitation Mission. Due to the history of budget reductions in education and treatment programs, as well as the tendency to place a higher priority on prison security, the department does not currently have the infrastructure—staff and program expertise, space within the prisons, and information systems—to effectively implement more or better programs. Given the size of California's prisons and geographical dispersion of those prisons (and parole offices), the Secretary and his chief deputies will likely require a program management infrastructure at the regional level and within the prisons to effectively implement and monitor uniform policies and procedures for inmate and ward programs. The administration's plan does not provide details on the level of resources that would be required to put such an infrastructure in place.
It should also be noted that the GRP-2 leaves open several important questions regarding the delivery and oversight of programs within the institutions. It states that wardens will no longer have responsibility for programs, such as health care, education, and vocational training, but does not indicate who would be in charge of these functions at the prison level.
Policy Changes Needed to Shift Department Focus Toward Rehabilitation. In some instances, the department's proposed dual missions—rehabilitation and security—can both be met operationally through the same programs. For example, vocational education programs further the objectives of both prisoner reintegration and prison safety. This is because vocational programs (as well as other programs) reduce inmate idleness, which often leads to incidents that require a custody or security response. In other cases, however, some activities that promote the objective of security can conflict with efforts to promote the objective of rehabilitation. For example, when inmates are placed in administrative segregation or on lockdown for security reasons, often they are not allowed to participate in academic and vocational education programs. While administrative segregation may further the objective of security, it works against the goal of rehabilitation.
The department will need to evaluate its existing inmate housing policies and make explicit tradeoffs between custody and rehabilitation activities that reflect its goal of providing an increased level of inmate programming. In so doing, the department will need clear criteria to guide its decisions regarding the allocation of resources to security activities versus inmate and parolee programs. We note that this process may require ongoing negotiations with employee unions.
Neither GRP-2 nor the YACA Strategic Plan provides clear criteria to assist the department in balancing the two objectives. In reviewing the plan, we would recommend the Legislature direct the administration to specify the criteria it proposes to use in allocating resources between the two missions. This will provide a point of reference for measuring future progress, as well as a tool to assist the department and the Legislature in making budgetary decisions. Should the Legislature approve the plan, it should—as part of its process for reviewing labor contracts—focus on the extent to which labor contracts are consistent with legislative priorities for the new department, especially as it relates to inmate and ward programs.
Administration Inconsistent on Inmate and Parole Programs. At the same time that the administration is presenting a reorganization plan that proposes to provide a higher level of rehabilitation services, the Governor's budget reduces CDC inmate and parolee programs by $95 million, as shown in Figure 4. This represents a 27 percent decrease compared to current-year spending. The proposed reduction raises concerns about the administration's commitment to this aspect of the plan.
Some experts in the field of corrections have expressed concerns regarding the GRP-2 proposal to merge the Youth Authority and CDC. The concern is that the Youth Authority, being a relatively small operation in comparison to CDC, will "get lost" and that institutions for wards will begin to operate more like adult prisons—with a greater emphasis on custody and control rather than rehabilitation.
We agree that these are important issues for the Legislature to carefully consider in its deliberations on the plan. Academic research shows that juveniles have different program needs than adults. There are a number of actions the Legislature can take to improve its own oversight of youth programs. For example, the Legislature could require funding for ward programs to be separately budgeted from adult programs. The Legislature could require employees within the Youth Division of the new department to meet specific training and educational requirements to ensure that these employees are prepared to work with juveniles. Additionally, the new department could be required to provide detailed information to the Legislature on its academic and vocational education programs, such as institution-specific pupil scores on certain standardized tests. Finally, the Legislature could provide that the Youth Authority merger only occur after certain conditions are met, such as certain program requirements of the Farrell v. Allen settlement agreement.
GRP-2 Recognizes Importance of Partnerships, Juvenile Justice Reform Will Be First Test. To its credit, the administration's proposed organizational structure includes a Division of Community Partnerships whose responsibility it would be to "establish, maintain, and expand cooperative agreements…. that can aid in the rehabilitation and reintegration of inmates, wards, and parolees." In addition to improved collaboration with local law enforcement, the YACA Strategic Plan proposes to improve interagency relations with other state departments such as the Mental Health and Employment Development departments, as well as with academic and research communities. We think this makes sense. We note that the Governor's 2005-06 budget includes—as part of its inmate medical services request—an example of such collaboration in its proposal to establish interagency agreements with the University of California for assessment and training of CDC medical staff, as well as physician consultations related to direct patient services.
Over the years, various audits, investigations, and lawsuits have uncovered numerous problems within the state's youth and adult correctional agencies. The problems range from a lack of fiscal control and employee misconduct, to prison overcrowding, to inadequate care and treatment of inmates and wards. In recent years, much attention has been focused on the escalating cost of operating the state prison system. The underlying premise of the proposed reorganization is that many of the problems facing corrections officials stem from its current organizational structure.
While we agree that some problems probably stem from the organizational structure of the state correctional system, we also note that some of the significant problems facing corrections officials, such as prison overcrowding and budget deficiencies, have little to do with the current organizational structure. For example, corrections spending is determined in large part by the number of individuals sentenced to prison and the labor costs to operate the prisons pursuant to state laws and court-ordered requirements. The GRP-2 does not propose to change sentencing laws nor labor costs. The Legislature should carefully consider its vital role in establishing sentencing laws, as well as its role in reviewing and approving labor contracts to determine if changes are required to further the goals of the reorganization.
Many aspects of state government's organization could be improved. Both reorganization plans aim to make improvements in this area. Given the lack of detail accompanying both of the Governor's proposed reorganization plans, however, it will be difficult for the Legislature to assess if they meet their stated goals.
Since the legislative vote is "yes" or "no," making decisions under the reorganization plan process can be awkward. The normal legislative process of amendments and compromises is not immediately available. This is particularly a problem when a plan includes 88 boards and commissions across a broad range of policy areas. What if the Legislature objects to just a handful of the proposed changes? What if the Legislature wants to add a few more boards? The process is inflexible to these types of changes. Similarly, GRP-2 focuses exclusively on organizational changes at the executive level but does not include any information on potential structural changes throughout the organization. If the Legislature is comfortable shifting the mission of the state correctional system toward rehabilitation, how can it ensure that the changes envisioned in GRP-2 meet this goal?
Ultimately, the Legislature should satisfy itself that (1) there is a clearly defined problem to be addressed by the reorganization plan and (2) the proposed organization will address the problem and enable the state to provide services more efficiently and economically.