Background

The major state judicial and criminal justice programs include support for two departments in the executive branch—CDCR and DOJ—as well as expenditures for the state court system. The state also provides funding to local governments to support public safety activities. For 2009–10, the Governor’s budget proposes General Fund expenditures of $12.3 billion for judicial and criminal justice programs, which is about 13 percent of all General Fund spending. This amount—which includes support for operations, capital outlay, and debt service for related facilities—represents a decrease of about $786 million, or 6 percent, below the proposed revised level of current–year spending for these programs.

Historical Spending Trends

The spending reductions proposed by the Governor for 2009–10 differ significantly from the historical trend of significant budgetary increases for criminal justice agencies. Figure 1 shows General Fund expenditures for judicial and criminal justice agencies since 2000–01. (These expenditures have been reduced to reflect federal funds the state has or is expected to receive to offset the costs of incarceration of undocumented felons.) As shown in the figure, expenditures for judicial and criminal justice agencies are projected to increase by roughly $5 billion, or 67 percent, between 2000–01 and 2009–10, an average annual increase of 5.8 percent. The single fastest growing agency has been CDCR, which also makes up the largest share of judicial and criminal justice spending.

Major Cost Factors

General Fund expenditures on judicial and criminal justice programs over the years have been largely driven by (1) employee compensation and inflationary adjustments, (2) adult and juvenile offender population changes, and (3) the creation and expansion of various programs and services.

Employee Compensation and Inflation. The costs to operate various judicial and criminal justice programs have been impacted by significant increases in employee compensation levels. In particular, salary increases for Bargaining Unit 6 employees—most of whom are correctional officers—have added more than $1 billion to the CDCR budget over the past decade. Judiciary and criminal justice costs have also risen with general price increases. For example, inflation increases the costs of supplies and utilities that are purchased by prisons and courts. Under current law, trial courts are to receive an inflationary adjustment each year to their operating budget based upon the State Appropriations Limit (SAL). Since the enactment of this requirement in 2005, trial courts have received over $400 million for SAL adjustments.

Adult and Juvenile Offender Population. As shown in Figure 2, the prison population has increased by 125 percent (an average of 4 percent annually) over the past 20 years, growing from 76,000 inmates to 171,000 inmates. The parole population has grown at a similar pace over that period. As we discuss later in this report, several factors contribute to changes in the inmate and parole populations, including the number of new admissions sent to prison by criminal courts and the number of parolees returned to prison by the state’s administrative revocation process.

Unlike the adult inmate and parole populations, the number of youthful offenders in state correctional facilities and on parole has decreased significantly in the past decade, particularly in the past year. As of June 30, 2008, 1,897 wards resided in state juvenile facilities and 2,280 youthful offenders were on state parole, which represents decreases of 25 percent and 16 percent, respectively, from the previous year. This recent decline in the juvenile offender population is primarily the result of the enactment of Chapter 175, Statutes of 2007 (SB 81, Committee on Budget and Fiscal Review). Under this statute, non–violent and nonserious offenders are no longer being accepted into state facilities and are instead remaining at the local level. In accordance with Chapter 175, counties receive state funds from the Youthful Offender Block Grant to provide local supervision and services for juvenile offenders.

New and Expanded Programs. Judicial and criminal justice spending has also increased as a result of the creation and expansion of various programs. For example, a couple hundred million dollars has been added to CDCR’s budget in recent years to expand inmate and parolee rehabilitation services, in accordance to legislative priorities. At the same time, federal court orders and settlements affecting CDCR operations have required specific program expansions and improvements. These court cases include:

• Plata, relating to inmate medical care (a federal court–appointed Receiver manages this care);
• Perez, relating to inmate dental care;
• Farrell and L.H., relating to juveniles within youth correctional facilities and on parole;
• Coleman, relating to inmate mental health treatment;
• Armstrong, relating to inmates with disabilities;
• Lugo, relating to parole hearings for inmates sentenced to life with the possibility of parole; and
• Valdivia, relating to revocation of offenders on parole.

From 1998–99 to 2008–09, the above court cases have collectively increased state costs by over $1.5 billion. Increased expenditures on judicial and criminal justice programs also reflect the state’s assumption of primary responsibility for funding trial court operations.

Governor’s Budget Proposal

Spending by Major Program

Figure 3 shows expenditures from all sources for the operation of major judicial and criminal justice programs in 2007–08, and as revised and proposed by the Governor for 2008–09 and 2009–10. (Capital outlay and debt–related expenditures from general obligation bonds are not included in the figure.) As the figure shows, CDCR accounts for the largest share of total spending in the criminal justice area, followed by the Judicial Branch, DOJ, and certain criminal justice programs budgeted as local assistance.

General Fund support is proposed to decrease by about 8 percent in CDCR and be eliminated for criminal justice local assistance programs. (As we discuss below, the Governor proposes to shift funding for these local assistance programs from the General Fund to vehicle license fee [VLF] revenue.) Under the budget proposal, General Fund support for CDCR would decrease more, in terms of the dollar amount, than any other judicial or criminal justice budget. While the Governor’s budget reduces General Fund support for CDCR and criminal justice local assistance programs, it slightly increases General Fund support for the Judicial Branch (the Supreme Court, Courts of Appeal, Judicial Council, trial courts, and the Habeus Corpus Resource Center) and DOJ.

Major General Fund Proposals

As shown in Figure 4, the Governor’s budget includes major General Fund budget changes for judicial and criminal justice programs relative to the 2008–09 Budget Act. As we discuss below, these changes reflect both General Fund augmentations and reductions to state operations and local assistance.

Proposed Augmentations. The Governor’s budget proposes various General Fund augmentations to judicial and criminal justice programs, including:

• $159.2 million for the full–year cost of new or expanded CDCR programs that recently began operation, including the statutorily required expansion of the Youthful Offender Block Grant. (This amount accounts for the expiration of limited–term positions and one–time costs from 2008–09.)
• $93.2 million to adjust CDCR’s operating budget for inflation.
• $71.4 million for the full–year cost of 50 new judgeships created in 2007–08 and start–up funding for 50 additional judgeships that would need to be created through new state legislation.
• $35.7 million to increase CDCR’s base budget for the overtime pay of custody security staff.
• $25.9 million for compliance with federal court orders and settlements, such as to implement changes in services for inmates with disabilities under the Armstrong case and to improve mental health services under the Coleman case.

Proposed Reductions. While the Governor’s budget proposes General Fund augmentations, it also proposes significant General Fund reductions to criminal justice programs, including:

• $188.7 million in 2008–09 and $501 million in 2009–10 from reducing General Fund support for various local assistance programs, with most of these reductions backfilled with funding from the portion of VLF revenues currently dedicated to Department of Motor Vehicles (DMV) administrative costs.
• $9.6 million in 2008–09 and $598.4 million in 2009–10 from reducing adult inmate and parole populations by (1) providing no parole supervision for inmates released from prison who did not have current or prior convictions for violent, serious, or certain sex crimes; (2) expanding inmate credits; and (3) increasing the threshold value for prosecuting property crimes as a felony.
• $219.5 million from shifting funding for most inmate and parole substance abuse programs from the General Fund to a special fund established with revenues from a proposed increase in the alcohol tax.
• $180.8 million from an unallocated reduction of 10 percent in the federal court–appointed federal Receiver’s medical services program.
• $146 million in savings, relative to the administration’s estimated workload budget for the Judicial Branch, as a result of eliminating the SAL adjustment for trial courts ($32.5 million), making various one–time reductions from 2008–09 ongoing ($103.5 million), and other budget adjustments ($10 million).
• $30 million in savings from transferring surplus funds from the Restitution Fund to the General Fund.

Capital Outlay Proposals for Corrections and Courts

CDCR Projects. The budget reflects a total of $4.5 billion in state expenditures for CDCR capital outlay projects. This amount includes (1) $212 million previously appropriated from the General Fund and $4.3 billion from lease–revenue bonds for prison construction projects authorized under Chapter 7, Statutes of 2007 (AB 900, Solorio), (2) $47.8 million in additional General Fund support to continue previously approved projects at existing prison facilities (such as water and wastewater projects and solid cell front conversions) and to begin three new projects, and (3) $16.6 million in additional lease–revenue bond authority mainly to replace a dormitory for inmates at the California Rehabilitation Center.

Court Projects. The proposed budget reflects a total of about $194 million in state expenditures for various new and ongoing court projects. This amount includes $160 million from the State Court Facilities Construction Fund (SCFCF) to (1) continue six previously approved courthouse projects ($62 million) and (2) acquire sites for 12 new courthouse projects ($98 million). (In accordance to Chapter 311, Statutes of 2008 [SB 1407, Perata], the new courthouses will be financed with additional SCFCF revenue resulting from court fee and fine increases.) The remaining $34 million in expenditures from lease–revenue bonds would be used to construct the new Susanville courthouse.

In the next section, we analyze the Governor’s budget proposals and present recommendations and options to assist the Legislature in balancing the 2009–10 budget.