Analysis of the 2005-06 Budget Bill Legislative Analyst's Office February 2005

Overview

General Fund expenditures for judiciary and criminal justice programs are proposed to increase by 2 percent in the budget year. This increase reflects (1) the activation of a new prison, (2) trial court funding costs resulting from a new annual adjustment and increases in court salaries, and (3) an inflationary adjustment for departmental operating expenses and equipment.

Expenditure Proposal and Trends

Budget Year. The budget proposes General Fund expenditures of $9.2 billion for judiciary and criminal justice programs, which is about 11 percent of all General Fund spending. This amount represents an increase of $179 million, or 2 percent, above estimated current-year spending. This overall increase consists of General Fund increases in some areas and decreases in other areas. However, the growth is largely driven by increases for the California Department of Corrections (CDC) (notably spending to activate a new prison), and the judicial branch.

Historical Trend. Figure 1 shows expenditures from all state funds for judiciary and criminal justice programs since 1998-99. 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 $3.4 billion between 1998-99 and 2005-06, an average annual increase of 6.8 percent. General Fund expenditures increased during this period mostly due to (1) the state's assumption of primary responsibility for funding trial court operations as a result of legislation 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.

Spending by Major Program

Figure 2 shows expenditures from all sources for the major judiciary and criminal justice programs in 2003-04, 2004-05, and as proposed for 2005-06. As the figure shows, CDC accounts for the largest share of total spending in the criminal justice area, followed by the Trial Court Funding program. The Youth Authority is the only department (of these major departments) proposed to experience a reduction in 2005-06. This is due to the proposed closure of two youth fire camps.

Major Budget Changes

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

The Budget Proposes Funds for Activation of New Prison, and Salary Increases. The budget provides about $93 million to open a new maximum-security prison in spring 2005 at Delano (Kern County). This primarily consists of funds for approximately 1,200 positions. The budget also provides $60 million for the full-year costs of salary increases that took effect in the current year, mostly for correctional officers.

The Budget Funds Court Order Related to Inmate Health Care. The budget would provide approximately $30 million to comply with a recent court order stemming from the Plata v. Davis settlement agreement reached in 2001 relating to inmate health care. This new funding is in addition to a 2002-03 request approved by the Legislature, providing about $90 million annually and 1,400 health-related positions, upon full implementation, to address the same lawsuit.

Reduction Proposed for Inmate and Parolee Programs. As part of the administration's unallocated reduction in state operations, CDC would be required to reduce spending by $95 million. The budget indicates that $95 million savings would be achieved through reductions in funding for inmate and parolee programs.

Juvenile Justice Reform. The budget indicates that the administration will propose significant policy changes in the Youth Authority as part of the May Revision. Although details are lacking, the budget suggests that the administration will likely propose to shift a portion of the Youth Authority population and services to the local level. At the same time, the budget proposes to reduce funding for local juvenile crime prevention programs by $75 million.

Trial Court Funding Program Gets Significant Increase. The budget proposes several major augmentations for the Trial Court Funding program. These consist of $92.5 million for increased trial court salaries and benefits, and $97 million related to the change in the state appropriations limit (SAL). It should be noted that the administration assumed 4.8 percent growth in the SAL for purposes of calculating the Trial Court Funding budget. However, we estimate the SAL change is about 6 percent, which would further increase state spending for the courts in 2005-06. The administration has indicated that it will make any needed adjustment in the May Revision. In addition, the budget includes approximately $73 million from the General Fund to repay a loan of the same amount that was included in the 2003-04 Budget Act.