Analysis of the 2006-07 Budget Bill
Legislative Analyst's Office
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. The budget proposes total expenditures of approximately $745†million for support of DOJ in the budget year. This amount is approximately $52†million, or about 7.4†percent, above estimated current-year expenditures. The requested amount includes $387†million from the General Fund (an increase of $43†million, or 12†percent), $277†million from special funds, $39†million from federal funds, and $42†million from reimbursements.
We recommend rejection of several requests, pending receipt of additional information, and recommend shifting some costs from the General Fund to the Indian Gaming Special Distribution Fund. (Reduce Item 0820-001-0001 by $15†million and increase Item 0820-001-0367 by $376,000).
Budget Proposal. The Governorís budget includes numerous augmentations for DOJ, including funding and positions for law enforcement activities related to financial crimes, methamphetamine use, and street gangs. The budget also requests funds to address workload growth in the Division of Gambling Control. Our main concern with most of the requests is that the department (1) does not provide data demonstrating the need to expand existing programs and (2) does not provide workload justification to support many of the new positions it seeks to establish. We discuss our concerns regarding each of these requests below.
Special Crimes Unit Staffing Request. The department requests $1.3†million and 13 positions to handle increased workload in the area of complex financial crimes and identity theft. According to the department, it does not have enough investigative and paralegal staff in its Special Crimes Unit to permit the timely investigation and prosecution of complex financial crimes. We have two concerns with this proposal. First, the department indicates that some of its workload results from local district attorneys being unwilling or unable to prosecute cases involving complex financial crimes. The department further indicates that part of its workload involves providing assistance to federal investigators. The department should provide detailed information on the level of assistance provided to local and federal investigators, so that the Legislature can evaluate whether, and to what extent, these entities should share in the cost of these services. Second, the department provides no information on workload for the paralegals and investigators to justify its request. It simply indicates that the attorney caseload has grown from an average of 15 cases in 1988 to an average of 25 cases in 2006. While this does demonstrate that there has been an increase in workload, it does not explain how that increase relates to the specific level of staff resources requested. The department should provide detailed workload justification for the investigator and paralegal positions requested. We recommend rejection of the $1.3†million pending receipt and review of this information.
California Methamphetamine Strategies Program. The Attorney General requests $6†million and 31 positions, mostly special agents, to provide technical assistance to local law enforcement in less populated areas of the state where some methamphetamine production occurs. Without prejudice to the request, we note that it provides no information on the potential distribution of methamphetamine production by region, no information on the existing level of local resources dedicated to methamphetamine enforcement, and no workload data to justify the requested number of positions. The department should provide this information so that the Legislature can determine the level of resources, if any, that should be dedicated to these activities. The department should also evaluate and report on the extent to which it may be able to redirect resources within its narcotics enforcement division. It should also be noted that the state Office of Emergency Services administers the War on Methamphetamine grant program, which provides grants totaling $9.5†million to a number of counties for methamphetamine-related law enforcement activities. The Governorís budget proposes to continue funding for the grant program at its current-year level. It is unclear how the requested $6†million and related 31 positions would be coordinated with the activities currently funded at the local level through the War on Methamphetamine grant program. In evaluating this request, the Legislature should ensure that all available resources are effectively targeted to areas of the state with the greatest need. We recommend rejection of the $6†million (and 31 positions) pending receipt of additional information.
Gang Suppression Enforcement Teams. We recommend rejection of the request for $6.5†million (and 34 positions) pending receipt of additional information. The request suggests that there has been a significant increase in gang-related activity but provides no data to support this assertion. Additionally, most gang activity continues to be concentrated in regions that have a long history of dealing with gangs locally, such as in southern California and the Bay Area. The departmentís request does not provide information to describe how these regions, which have developed expertise in dealing with the gang problem, would benefit from the presence of DOJ special agents. Pending receipt and review of this additional information, we recommend rejection of the request for $6.5†million, which is proposed to grow to nearly $10†million in 2007-08.
Division of Gambling Control. Based on our review of the departmentís request for $3.3†million and 19 positions for workload growth in the Division of Gambling Control, we recommend approval. However, we recommend that the divisionís operations continue to be supported entirely by the Indian Gaming Special Distribution Fund (SDF) and the Gambling Control Fund. Revenues for these funds come from tribal-state gambling compacts, as well as fines and fees collected from gambling regulation. The administration now proposes to provide a portion of the funding for the divisionís expansion from the General Fund. The rationale given by the administration is that some tribesí payments go directly to the General Fund rather than SDF; and, therefore a proportion of the costs of operating the division should also be paid from the General Fund. However, state law and the tribal compacts allow funding for all gambling related regulatory activities to come from SDF, which is projected to have a fund balance of $113†million at the end of 2006-07. Accordingly, we recommend continuing to fund the division entirely from SDF and Gambling Control Fund for a General Fund savings of $367,000. (The Governorís budget proposes a related expansion of the activities of the Gambling Control Commission. We discuss that proposal in the ďGeneral GovernmentĒ chapter of this publication.)
Underground Economy. The budget requests $556,000 and 4.3†positions to establish an Underground Economy Statewide Investigation and Prosecution Unit within the Public Rights Division. This unit would work as part of the Joint Strike Force on the Underground Economy (JESF), a multi-agency coalition which is headed by the Employment Development Department (EDD) and includes DOJ. It would also work in conjunction with the Economic and Employment Enforcement Coalition (EEEC), another multi-agency coalition established July 1, 2005 that includes four state entities (Divisions of Labor Standards Enforcement and Occupational Safety and Health in the Department of Industrial Relations, EDD, and Contractorís State Licensing Board in the Department of Consumer Affairs) and the U.S. Department of Labor. According to DOJ, the focus of the unit would be the investigation and prosecution of various underground economy cases, including unfair competition cases seeking restitution for unpaid wages, and criminal cases dealing with theft of labor, withholding of wages, and tax evasion. While we recognize the importance of efforts to combat the underground economy, we have two concerns with this request. First, DOJ asserts that the unit will work together with other members of JESF but does not specify the role of the unit with respect to other members of the strike force. Second, the proposal identifies several potential sources which would generate workload for the unit, most notably the newly created EEEC and local prosecutors that lack the expertise to litigate these cases. However, the department does not provide information to demonstrate that such workload exists. It should be noted that several agencies involved in EEEC have in-house legal staff that represent the agencies in cases against employers. Moreover, other affected agencies, such as the tax and licensing agencies, use current DOJ staff when their assessments are challenged in court. Since EEEC has only been in existence for less than a year, it may be premature to establish an ongoing unit within DOJ. It is possible that future DOJ workload created by EEEC could be absorbed using existing resources. For these reasons, we recommend rejection of the request.
Conclusion. We note that all but one of the requests discussed above are expansions of existing programs at DOJ. Our recommendations would not reduce any base levels of funding; they would only reject the requests for expansion. However, we note that in some areas, it may be possible to improve program outcomes by more effectively targeting existing resources. This could include shifting staff and other resources from their current use to an activity that is a higher priority. These actions should be considered before the programs receive additional funding.