Analysis of the 2007-08 Budget Bill: Judicial and Criminal Justice

Juvenile Justice

Who Is in the Division of Juvenile Justice?

There are several ways that an individual can be committed to the Division of Juvenile Justice’s (DJJ’s) institution and camp populations, including:

• Juvenile Court Admissions. Most first-time admissions to DJJ are made by juvenile courts. As of September 30, 2006, almost 96 percent of the institutional population was committed by the juvenile courts and included offenders who have committed both misdemeanors and felonies.

• Criminal Court Commitments. As of September 30, 2006, about 4 percent of the DJJ institutional population had been initially committed by criminal courts. This includes juveniles committed directly to DJJ after being tried and convicted as adults. It also includes youthful offenders committed to the California Department of Corrections and Rehabilitation’s (CDCR’s) Adult Division but housed at a DJJ facility. These inmates are referred to as “M cases” because the letter M is used as part of their DJJ identification number. Current law requires that M cases be transferred to state prison at age 18, unless their earliest possible release date comes before they reach age 21.

• Parole Violators. These are parolees who violate a condition of parole and are returned to a DJJ facility. In addition, some parolees are recommitted to a facility if they commit a new offense while on parole.

Characteristics of Wards. Wards in DJJ institutions are generally between the ages of 12 and 24, with an average age of 19½. Males comprise more than 95 percent of the ward population. Latinos make up the largest ethnic group in DJJ institutions, accounting for 51 percent of the total population. African-Americans make up 31 percent of the population, whites are 13 percent, and Asians and others are about 5 percent.

Population Issues

Institutional Population May Be Overstated

The caseload projection for the Division of Juvenile Justice institutions appears to be overstated when compared to recent ward population data. Accordingly, we withhold recommendation on the 2007-08 budget request for caseload funding pending receipt of any further proposed institutional and parole population adjustments at the May Revision.

Juvenile Institution Population Decrease. As of June 30, 2006, 2,887 wards resided in DJJ facilities. The department forecasts the ward population will decrease to 2,490 wards by June 30, 2008, a projected two-year decrease of 397 wards, or about 14 percent, compared to the beginning of the current fiscal year. The projected decrease is the result of a continuing trend of declining admissions to youth correctional facilities. The declining admissions are primarily the result of fewer juvenile court commitments to state facilities. These baseline projections do not reflect an administration proposal, discussed later in this analysis, for policy changes that would result in significant further reductions in the ward population. Figure 1 shows the year-end ward and parole populations for the period 1997 through 2008.

Juvenile Parole Population Decrease. As of June 30, 2006, CDCR supervised 3,162 youthful offenders on parole. The department forecasts the parole population will decrease to 2,405 by June 30, 2008, a projected two-year decrease of 757 parolees, or 24 percent. The projected decrease is the result of a continuing trend of declining admissions to youth correctional facilities. As Figure 1 shows, while the parole population is now slightly greater than the institution population, the administration’s budget plan assumes that the institution population will slightly exceed the number of juveniles on parole caseloads by the end of 2007-08. The significant continued decline in the numbers of wards under parole supervision is primarily a result of the declining rate of new admissions into DJJ youth correctional facilities.

Fiscal and Housing Implications of Population Changes. At the time the Governor’s budget plan for DJJ operations was prepared, the decline in the ward institutional and parole populations had been tracking fairly closely to the level assumed in the 2006-07 Budget Act. However, DJJ has encountered some delays in implementing certain changes in the way it houses juvenile offenders required by a legal settlement in what is known as the Farrell case. As a result, the state will spend less on these improvements than expected in the current year. The 2007-08 budget proposes a General Fund reduction (not including Proposition 98 adjustments) of $10.5 million in the current year to reflect these changes.

The funding proposed in 2007-08 for population adjustments reflects the continued decline in institutional and parole populations, but also increased costs for Farrell compliance. As a result, the budget proposes a net increase in General Fund support (again, exclusive of Proposition 98 adjustments) of $5.8 million in the budget year.

Some Variance in Recent Numbers From Budget Plan Assumptions. As previously noted, at the time the DJJ budget for 2007-08 was prepared, institutional populations were tracking fairly closely to the numbers assumed in the 2006-07 Budget Act. More recent data, however, indicate that the number of wards in DJJ institutions is more than 100 below the previously budgeted level. If this trend holds, it means that DJJ may be overbudgeted from the General Fund by as much as $10 million in the current year and by as much as $20 million the budget year.

Because this trend has occurred only recently, however, we believe it is premature to recommend a specific further population adjustment for DJJ institutions at this time. It is possible the trend could change significantly between now and the May Revision, when the administration will update the budget to reflect any further institutional and ward population adjustments that are warranted.

Analyst’s Recommendation. Because the changes in caseload noted above are relatively recent, we withhold recommendation on the caseload funding request pending receipt of the May Revision. We will continue to monitor the DJJ population and make recommendations for further budget adjustments as appropriate at the time of the May Revision.

Population Shift Warranted, But Construction Funding Not Justified

The 2007-08 budget plan for the Division of Juvenile Justice reflects the administration’s proposals to (1) shift some offenders from the state to the local level and (2) enact a new state grant program to build county juvenile facilities. In this analysis, we provide background on the respective state and local roles in the juvenile justice system, describe the proposed policy changes, and comment on the approach the Legislature may wish to take concerning these matters. We recommend approval of the shift in offenders now housed in state facilities to the local level, but recommend disapproval of the new facilities program.

Background

Counties Play Major Role in Juvenile Justice System. Generally, the juvenile justice system is a local responsibility. Following the arrest of a juvenile, the law enforcement officer has the discretion to release the juvenile to his or her parents, or to take the suspect to juvenile hall and refer the case to the county probation department. Juvenile court judges generally take into account the recommendations of probation department staff in deciding whether to make the offender a ward of the court and, ultimately, determine the appropriate placement and treatment for the juvenile based on such factors as the juvenile’s offense, prior record, criminal sophistication, and the county’s capacity to provide treatment. Judges declare the juvenile a ward almost two-thirds of the time.

Most wards are placed under the supervision of the county probation department. These youth are typically placed in a county facility for treatment (such as juvenile hall or camp) or supervised at home. Other wards are placed in foster care or a group home. A small number of wards (under 2 percent annually), generally constituting the state’s most serious and chronic juvenile offenders, are committed to DJJ and become a state responsibility.

The construction and renovation of local juvenile halls and camps have also generally been a county responsibility. The Corrections Standards Authority (CSA), an agency within CDCR, does administer federal and state grant programs to help renovate local juvenile institutions. In the past, CSA’s predecessor agency, then known as the Board of Corrections, has administered bond funds for juvenile facility improvements. The CSA reports that it has allocated about $450 million in local assistance, including about $280 million in federal funds and $172 million in state funds, since 1997 to build and renovate juvenile halls and camps. However, as of 2007, all available federal and state funding has been appropriated and allocated.

Governor’s Budget Proposals

The 2007-08 budget plan reflects two major changes in state policy in regard to the incarceration of juvenile offenders. First, beginning July 2007, the state would stop accepting and would return certain populations of juvenile offenders now held in DJJ institutions to the local level. Also, the state would provide a new block grant program to offset county costs resulting from this change. Second, the state would provide $400 million in lease-revenue bond financing (to be matched with $100 million in local funding) to build as many as 5,000 new beds for juvenile facilities. We outline these proposals in more detail below.

Shift of Juvenile Justice Population. The Governor’s budget plan assumes net General Fund savings to the state of about $43 million in 2007-08, growing to about $97 million annually, from the enactment of proposed legislation and budgetary changes to shift certain juvenile offenders now held in DJJ institutions to the local level.

Specifically, the administration assumes that the state will achieve savings by housing about 1,338 fewer juvenile offenders in DJJ facilities by the end of 2007-08, reducing the population of state facilities by roughly one-half. Certain groups of lower-level offenders (parole violators whose original offense was a nonviolent offense and nonviolent male offenders generally under age 21) and all female offenders would move to the county level. There, counties could either hold them in juvenile halls or camps or provide programs for them in the community. State law would be modified to permit the state to (1) stop the intake of some of these groups of offenders into DJJ as of July 2007, and (2) “recall” to the county some of these offenders now held in DJJ facilities. The recall would be completed by June 2008.

The budget plan assumes additional savings from the discontinuation and legislative repeal of a recently enacted program (the Juvenile Justice Community Reentry Challenge Grant Program) to assist offenders in their reentry from institutions into the community.

The repealed reentry program would be replaced with a new and larger block grant program, providing allocations to counties that are intended to more than offset the costs to counties of keeping custody or taking custody of juvenile offenders previously held by DJJ. The block grant funds—the equivalent of $94,000 per offender, per year—would be allocated to counties in perpetuity for assuming responsibility for additional offenders. The budget proposes $53 million in funding for 2007-08 for the counties to handle the affected juveniles. The administration estimates that this amount would grow in 2008-09 to nearly $100 million once the shift of this population to local authorities had been completed. The state would conduct audits to ensure that the funds were used by counties for incarceration or the provision of services for juvenile offenders.

A summary of these proposals, the administration’s estimate of the net savings to the state from these changes, and our own net savings estimate are shown in Figure 2.

New Juvenile Facility Grant Program. The administration proposes $400 million in lease-revenue bond financing, to be matched by up to $100 million from counties, for the construction and renovation of as many as 5,000 juvenile beds. The juvenile facilities proposal is one component of a larger proposal that would also provide an additional $4 billion in bond financing for the construction of county jails for adult offenders.

The legislation to implement this proposal provides CDCR the authority to administer the new jail and juvenile facility grant program and develop regulations defining the grant requirements, which are to be similar to those CSA has used for past federal and state grant programs.

Moving Juvenile Offenders Back to Their Community

Our analysis indicates that a proposal to shift roughly one-half of the current Division of Juvenile Justice institution population to local juvenile facilities and programs, along with block grant funding to offset the related additional costs for counties, is fundamentally sound but warrants technical adjustments to reflect the full state savings that would result from this change.

Below, we provide our assessment of the administration’s proposal to move some offenders from DJJ institutions to the local level, and our recommendations to the Legislature to address some technical and policy issues relating to the plan.

Population Shift Proposal Fundamentally Sound. Our analysis indicates that the policy change proposed by the administration is fundamentally sound and offers the potential to leave the state, counties, and juvenile offenders and their families better off than they are now. We outlined a similar approach in The 2004-05 Budget: Perspectives and Issues (page 93).

The state could benefit significantly from the shift because it would help contain the rapidly escalating costs of complying with the Farrell settlement agreement and reduce the operational challenges of hiring and retaining correctional and clinician staff to provide services for wards. Such a large population shift should lead to the closure of some of its aging and outdated juvenile correctional institutions. As a result, the state could avoid part of the large investment that would be otherwise needed to maintain, repair, and eventually replace these facilities. Some current institutional sites could also be used for other high-priority state programs or sold to private parties for a significant one-time gain in state revenues.

Counties could also experience a net financial gain by receiving more financial resources in the new block grant program than the costs they would probably incur by becoming responsible for the additional population of offenders. While we are advised that up-to-date data on the average county costs for juvenile offender facilities and programs is unavailable, it is likely that, in most jurisdictions, their costs are below the $94,000 per ward grant proposed by the administration. Moreover, because they would receive these resources in perpetuity, counties would continue to receive a stable funding base, even as current trends show the number of juvenile felony arrests and number of juveniles in county facilities is declining. Because the administration has not presented the Legislature with legislation to implement this aspect of its proposal, many details pertaining to this new local assistance program are unclear. However, in concept, the block grant approach offered by the administration appears to provide flexibility to counties to divert some of these offenders to alternative sanctions programs in the community that could be far less costly than incarceration.

Juvenile offenders and their families could gain from this new approach to the extent that the additional state funding provided to counties is devoted to improving supervision and treatment services for offenders, potentially preventing their continued involvement with the criminal justice system. Also, because these offenders would now be held in institutions within their home community, there should be greater opportunities to maintain or strengthen relationships with their families and local organizations that could provide them assistance when they are released back into the community.

Some Significant Issues Warrant Consideration. While we believe the proposal to shift low-level and female offenders from DJJ facilities is achievable and good criminal justice policy, we believe some significant issues related to this proposal warrant consideration by the Legislature.

• State Savings Understated. The administration’s estimate of savings discussed above is based (with appropriate adjustments to reflect the lower risk and short time served by the population being shifted to counties) on an out-of-date, lower estimate of the annual cost per ward. Moreover, the budget proposal does not take into account modest savings from a reduction in the parole caseload due to this policy change, and overstated the costs of contracting out to obtain beds for female offenders. Taking all of these factors into account, we believe the net savings to the General Fund achieved by this change in 2007-08, as shown in Figure 2, are understated by about $24 million.

• DJJ Staff Positions Not Reduced. While the budget proposal presented by the administration adjusts the level of funding provided for the state’s operation of youth facilities, it does not include any reduction in the staff positions that are supported with that funding. The administration is proposing that no adjustment in positions be made in 2007-08 budget deliberations because it has not yet identified which specific DJJ juvenile facilities it intends to close.

• No Facility Closure Plan Available for Legislature. The administration is proposing to identify by June 30, 2007 DJJ facilities that would be closed, and to begin by January 1, 2008, to implement the closure of facilities that would not be needed due to the decrease in the population of its institutions. However, given the June 2007 constitutional deadline for the Legislature to pass a state budget plan for the next fiscal year, this timetable means that the Legislature might not have any information on the likely extent of facility closures or the specific facilities that would be closed at the time it acted on this proposal.

• Other CDCR Budget Requests Inconsistent With Plan. Some other budget requests included in the 2007-08 CDCR budget proposal are inconsistent with the proposal to shift juvenile offenders from the state to the local level. For example, the administration is proposing to spend $3.5 million for new equipment for DJJ facilities. Another $12 million is proposed for special repair projects at a mix of adult and juvenile facilities. It is likely that not all of these equipment purchases will be needed if some DJJ facilities are closed, and it may not make sense to make some special repairs at juvenile facilities that are going to be closed.

• Major Implications for Farrell Remedial Plans. The 2007-08 budget plan does not adjust various technical and policy budget proposals to implement six remedial plans that resolve problems found in the Farrell litigation (discussed earlier). For example, the budget requests $980,000 for additional staff positions to create a Specialized Treatment Facility at the N.A. Chaderjian Youth Correctional Facility along with funding for a contract to study (among other issues) why lower-level juvenile offenders are sent to DJJ. These budget items may warrant changes in light of the proposal to actually shift low-level offenders out of DJJ and may also require discussions with the Farrell court and its experts to ensure that the state remains in compliance with the state’s settlement of the case.

• Data on County Costs Will Be Forthcoming. At the time this analysis was prepared, the administration was not able to provide up-to-date data regarding the actual costs to counties of operating juvenile institutions and programs. That makes it more difficult for the Legislature to assess whether the $94,000 per offender block grant is the appropriate amount of funding. We are advised that a survey of counties regarding these costs is now being developed by a statewide probation association, but that survey data have not yet actually been collected.

• Statutory Framework Missing for New Local Assistance Program. While the administration has submitted to the Legislature proposed trailer bill that would divert female and low-level offenders to the local level, it has not submitted to the Legislature any proposed legislation to implement the new juvenile justice grant program for counties. A statutory framework is needed that specifies how funding for this new program can be used and how it would change over time.

• Juvenile Parole Shift Could Be Considered. As noted above, the proposed changes to shift certain juvenile offenders to local jurisdiction would significantly reduce the DJJ parole caseload. Given that the total statewide parole population is already projected to be fairly small by the end of 2007-08—about 2,400 offenders—it may no longer be practical or cost-effective for the state to attempt to provide parole services for such a relatively small population of offenders. It may make more sense to shift the supervision of juvenile offenders released from DJJ facilities from state parole agents to county probation officers.

Analyst’s Recommendations

Approve Population Shift Plan. Because we believe the juvenile institutional population shift proposed by the administration is fundamentally sound policy, we recommend its approval by the Legislature with some modifications. Specifically, we recommend that the net savings from this change be adjusted to more accurately reflect the cost per bed of operating DJJ institutions and to take into account the savings that will also result from a reduction in parole caseload. We estimate these additional savings to be about $24 million. We recommend that the Legislature direct DJJ to provide a revised estimate of these additional savings at the time of the May Revision that also takes into account updated information on the number of offenders in DJJ institutions that would be shifted to the jurisdiction of counties.

Obtain Information on Facilities and Staffing Changes. We recommend that DJJ report at budget hearings its preliminary findings regarding the facilities it is likely to close due to the shift of juvenile offenders to the local level. We further recommend the adoption of trailer bill language directing the administration to provide the Legislature with a DJJ facility closure plan at least 30 days in advance of a proposed timetable when closures are to begin. This would provide the Legislature with an opportunity to understand and comment upon on the administration’s proposed approach before any decisions have been finalized. The trailer bill language should also direct the administration to provide, at the same time, an accounting of proposed staffing changes in DJJ facilities to reflect the shift of the juvenile population to the local level.

Adjust Other Inconsistent Budget Requests. We recommend that the Legislature direct the administration to report at budget hearings regarding the adjustments needed to make other CDCR budget requests, such as those for additional maintenance and special repairs funding and implementation of the Farrell remedial plans, consistent with the population shift proposal.

Review Level of Block Grant Allocations. The Legislature should review, and appropriately adjust, the level of state funding proposed to be allocated to counties for the new block grant program to reflect the costs to counties of providing such services. The administration should independently assess the validity of the survey of these costs that is now being prepared and, if it has concerns about the overall accuracy of the survey results, report its own estimate of these costs to the Legislature. In our view, the state should provide a block grant funding level that (1) is sufficient to offset county costs, (2) provides a financial incentive for counties to concur in this shift of offenders, and (3) maximizes the potential savings to the state General Fund from these changes.

Establish Legislative Framework for New Local Grants. The Legislature should direct the administration to submit a statutory framework for the proposed juvenile justice grant program. The framework should, among other provisions, clearly identify the permitted use of the funds, establish that the funds are subject to audit, make clear the penalties for their misallocation, and indicate how the level of funding for these grants would be determined in future years.

Consider Shifting Parole Functions to Probation Departments. We recommend that DJJ report at budget hearings on the feasibility and advisability of (1) discontinuing its parole supervision of offenders released from DJJ institutions and (2) shifting an appropriate level of state funding to counties to fully offset the cost of their absorbing supervision of these offenders into county probation operations. The department should be asked to comment on both the fiscal and operational implications of such a change.

Creating a New Juvenile Facilities State Grant Program

An administration proposal to provide $400 million in lease-revenue bond funding to build as many as 5,000 local juvenile beds is not justified given the current surplus of 4,000 such beds statewide.

In this section, we discuss our concerns about the administration’s proposal to provide $400 million in state lease-revenue bonds to build additional capacity in county juvenile halls and camps.

Justification Not Provided for 5,000 Beds

Our main concern about the proposal for $400 million (matched by up to $100 million locally) is that the administration has not provided the Legislature with justification for its proposal for as many as 5,000 beds with an assumed cost of $100,000 per bed.

No Independent Validation of Need. The administration has indicated that it has based its proposal on the estimates of local law enforcement organizations advocating for additional funding for this purpose (as well as new adult jails). Administration officials have confirmed, however, that they have not independently validated either the number of beds or the cost of providing them.

Current Surplus of Juvenile Beds. Notably, data we have reviewed indicates that the county juvenile justice system currently has a surplus of beds in both juvenile halls and camps. This is because, while counties have constructed additional local capacity in juvenile facilities in recent years with aid from state and federal grants, the number of juvenile arrests, bookings for crimes, and population in both state and county juvenile facilities has been dropping.

According to CSA, various state and federally supported projects to add capacity were estimated to bring the total county juvenile hall and camp beds to just under 15,000 by 2007. That is well above the estimated average daily population of these facilities of about 11,000 offenders. In other words, these facilities typically have a combined surplus of 4,000 beds, calling into question why 5,000 more beds are needed at this time. While this surplus of beds would temporarily be reduced to some extent by the proposed shift of an estimated 1,338 low-level offenders to the county level, the surplus would be likely to start to grow again if current trends continue.

Counties Have Alternatives to New Facilities. We acknowledge that while the counties have a surplus of beds on a statewide basis, there may be some aging facilities in particular counties that require replacement or renovation. There may also be specialized space required for mental health treatment and female offenders.

Our analysis indicates that these costs could be minimized in at least some cases to the extent that counties contracted among themselves to “sell” their surplus beds to others in their region lacking bed space or those needing specialized treatment centers for some offenders. Moreover, if the number of juvenile offenders held at the local level continues to drop in keeping with ongoing trends, many counties would have “room” to convert surplus housing space to treatment space at costs that would probably be significantly below the $100,000 per bed assumed in the Governor’s budget proposal. Finally, there are indications, such as California’s relatively high rate of incarcerating juveniles compared to other states, that counties are not fully using alternatives to institutions for lower-level offenders. This includes, for example, day-reporting centers, which could be much less costly for counties to establish and operate than new facilities. Such alternatives would clear out rooms for offenders who must be incarcerated.

Analyst’s Recommendation

We recommend that the Legislature reject the Governor’s proposal for $400 million in lease-revenue bond financing for juvenile facilities because the administration has failed to provide justification for this significant new commitment of state funding.

As noted above, the juvenile justice system is generally a county responsibility, and counties are thus the agencies primarily responsible for providing the facilities necessary to carry out these duties. In our view, state funding should only be provided where there is a demonstrated critical need for additional beds that counties cannot address on their own. However, on a statewide basis, counties currently have a surplus of 4,000 juvenile beds overall, due in part to recent state funding of new juvenile facilities. Particular counties with a need for beds or specialized treatment space have options other than building additional space. Under these circumstances, we believe the Governor’s proposal should not be approved.

---

Return to Judicial and Criminal Justice Table of Contents, 2007-08 Budget Analysis