California’s Fiscal Outlook: The 2012-13 Budget

The Legislative Analyst's Office has just issued the following report:

California’s Fiscal Outlook: The 2012-13 Budget

Our updated assessment of California’s economy and revenues indicates that General Fund revenues and transfers in 2011-12 will be $3.7 billion below the level assumed in the June budget package. This revenue shortfall would translate into $2 billion of potential “trigger cuts” to various state programs—including all of the “Tier 1” trigger cuts and three-fourths of the “Tier 2” trigger cuts. (The Director of Finance will determine the actual amount of trigger cuts next month.)

We forecast that the state will end 2011-12 with a $3 billion deficit, including the effects of the trigger cuts that could result from our revenue forecast. In 2012-13, we forecast that the state will face increased costs due to the expiration of a number of temporary budget measures, a significant increase in Proposition 98 school costs under current law, the required repayment of a $2 billion Proposition 1A property tax loan used to help balance the budget in 2009, and other factors. These factors contribute to a projected $10 billion operating shortfall (the difference between annual General Fund revenues and expenditures) in 2012-13. The $3 billion “carry-in” deficit from 2011-12 and the projected $10 billion operating deficit in 2012-13 mean that the Legislature and the Governor will need to address an approximately $13 billion budget problem between now and the time that the state adopts a 2012-13 budget plan. (50 pp.)

This report available using the following link: http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=2539

You can download and view the .pdf file of the report below.

In addition, click the lao.ca.gov link to see three videos summarizing the report. Legislative Analyst Mac Taylor provides an overview and Deputy Jennifer Kuhn discusses Proposition 98. Deputy Jason Sisney explains the revenue and economic outlook.

Legislative Analyst’s Office: May Budget Revision Report

In the May Revision, the administration estimates that California must address a $17.9 billion gap between current-law resources and expenditures in the 2010‑11 General Fund budget. In our view, the administration’s estimate is reasonable...

CCPOA Information for Parole Services Associates

If you are a Parole Services Associate and you hired on or after August 11, 2004 you were automatically enrolled in the Alternative Retirement Program (ARP).

What this means is that for the first two years 5% of their pay was deducted and placed in an ARP account. In their 25th month, the deduction stop going into the ARP and start going to CalPERS. During months 47 and 49, they have to choice what to do with the money in their ARP account. They have three options:

1. They can transfer the money to CalPERS.

Continue Reading...

May Revision Overview: Judicial & Criminal Justice

Major State Programs. The major state judicial and criminal justice programs include the California Department of Corrections and Rehabilitation (CDCR) and the Department of Justice, as well as the state court system. 2009-10 Budget. The 2009-10 Budget Act includes a total of $12.5 billion from the General Fund for judicial and criminal justice programs, which is about 14 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 $727 million, or 6 percent, below the revised level of current-year spending for these programs....

Informational: CDCR, Local Government Financing

LAO Compromise

• Results in an additional $112.1 million in General Fund... savings relative to Assembly version.
• Funds only programs that have demonstrated effectiveness at improving public safety.
• Recognized the availability of special funds to support programs.
• Eliminates programs that are primarily a local responsibility.

Special Review: California Prison Health Care Receivership 2007-2008

Special Review of California Prison Health Care Receivership Corporation Use of State Funds for Fiscal Year 2007-2008 as conducted by David R. Shaw, Inspector General of the California Office of the Inspector General (OIG): Our review found that the receivership spent $51.2 million during the year for its operating costs and long-term capital assets purchased on behalf of the California Department of Corrections and Rehabilitation (CDCR). This amount represents four percent of the $1.4 billion spent in fiscal year 2007-2008 to provide medical care to CDCR's adult inmate population. The largest expense category was capital assets, for which the receivership spent $28.7 million. In addition, the receivership spent $13.5 million on professional fees, $7.3 million on employee compensation and benefits, and $1.7 million on other expenses and travel...

Prisons vs. Universities Proposal Would Unwisely Lock Up Budget Flexibility

In his January budget, the Governor proposed a state constitutional amendment that would require reductions in spending on state corrections, with corresponding increases in spending for public universities. Beginning in 2014‑15, the state would be required to dedicate no more than 7 percent of state General Fund spending to corrections and no less than 10 percent to public universities. We urge the Legislature to reject this proposal because it (1) would unwisely constrain the state’s ability to allocate funding where it is most needed each year; and (2) is unnecessary, as the state already has the ability to shift funding among programs without this constitutional amendment...

Achieving Better Outcomes for Adult Probation

County probation departments in California supervise roughly 350,000 adult offenders in their community. In addition to supervision, these departments also refer probationers to a variety of rehabilitation and treatment programs. Although the probation programs and supervision are a local responsibility, their performance affects state-level public safety programs. This is because adult offenders that fail on probation can have their probation term revoked and be sentenced to state prison, where it costs the state on average approximately $49,000 per year to incarcerate an offender...

Implementing AB 900’s Prison Construction & Rehabilitation Initiatives

On May 23, 2007, the Governor signed into law Chapter 7, Statutes of 2007 (AB 900, Solorio), in order to relieve the significant overcrowding problems facing state prisons. Specifically, AB 900 authorized a total of approximately $7.7 billion for a broad package of prison construction and rehabilitation initiatives. Prison Construction Projects ($7.7 Billion). The measure contained a number of significant provisions to finance the construction of both state prisons and county jail space using $7.4 billion in lease-revenue bonds and a $300 million General Fund appropriation...

Spending in Correctional Officer Overtime

The Governor's budget provides a $35.7 million General Fund augmentation to the California Department of Corrections and Rehabilitation (CDCR) to pay for overtime costs for custody staff. The CDCR argues that its base overtime budget - which it identifi es to be $104.3 million—has not been adjusted since 2000-01, despite a 34 percent base salary increase provided to correctional officer staff over that period. The $104.3 million overtime budget identifi ed by CDCR does not include about $49 million in additional overtime funding provided since 2004-05 for various activities, such as medical guarding...

California Department of Corrections and Rehabilitation

Background. The California Department of Corrections and Rehabilitation (CDCR) is responsible for the incarceration and care of adult felons and non-felon narcotics addicts at 33 state prisons, as well as juvenile offenders at 6 youth correctional facilities. The CDCR also supervises parolees and wards released to the community. The department has nearly 70,000 employees. Operations Budget. The 2009-10 budget includes about $9.8 billion—almost entirely from the General Fund—to operate CDCR. Over 90 percent of these funds support adult inmates and parolees. The budget includes a $180 million unallocated reduction to the Receiver's medical services program and a $400 million unallocated reduction resulting from a Governor's veto...

Overview of Corrections Spending and Administration

Background. The CDCR is responsible for the incarceration and care of adult felons and non-felon narcotics addicts at 33 state prisons, as well as juvenile offenders at 6 youth correctional facilities. The CDCR also provides services to parolees and wards released to the community. Total Budget. The revised 2008-09 budget includes total expenditures of $11.2 billion for CDCR from all fund sources. About 90 percent of these expenditures are funded from the General Fund. The department has nearly 70,000 employees. Operations Budget. The budget includes $10.4 billion—almost entirely from the General Fund—to operate CDCR. Over 90 percent of the department's operations budget supports supervision of adult inmates and parolees, with the remaining funds supporting supervision of juvenile offenders and various administrative costs...

The 2009-10 LAO Budget Analysis Series

In November, the administration projected a $24 billion drop in revenues from the estimates in place a few months earlier when the 2008.09 Budget Act was adopted. Now, due to the worsening economy, the administration projects an additional $7 billion decline in revenues. Combined with the states chronic operating shortfall and rising expenses, the administration projects that the state would end 2009.10 with a deficit of $40 billion absent corrective action...

LAO Compromise: Proposals to Reduce Inmate and Parole Populations

Benefits of LAO Compromise:

• Would generate $398 million in General Fund savings... in the budget year. This amount would increase significantly in 2009-10, thereby providing an ongoing budget solution.
• The LAO package includes a series of proposals that are consistent with recommendations of national experts on corrections, such as earned discharge and additional credits for completing rehabilitation programs. Our approach would increase offender accountability and provide incentives for offenders to participate and complete programs designed to reduce recidivism. The LAO package reduces public safety risk compared to early release or the broad use of summary parole or direct discharge.

Informational: Reentry Facilities Program Study and Acquisition

We recommend the following conference compromise:

• Approve funding of $3 million for the reentry facilities program study and acquisition activities (Assembly plus $3 million).
• Approve budget bill language (BBL) proposed by the administration allowing the California Department of Corrections and Rehabilitation (CDCR) with the approval of the Department of Finance to use funds for site investigations and real estate due diligence activities preliminary to the site selection and acquisition of interests in real property. The CDCR is also authorized, with the approval of the State Public Works Board, to enter into agreements for the acquisition of an option to purchase real property...

Prison and Parole Population Management Options

The administration proposes two policies - 20-month early release and summary parole—designed to significantly reduce the state's inmate and parolee caseloads by a total of 63,000 offenders at full implementation in 2009-10. The administration estimates its proposals would save the state $354 million in 2008-09 and $758 million in 2009-10.

The 2008-09 Budget: Perspectives & Issues

The purpose of this document is to assist the Legislature in setting its priorities and reflecting these priorities in the 2008-09 Budget Bill and in other legislation. It seeks to accomplish this by (1) providing perspectives on the state's fiscal condition and the budget proposed by the Governor for 2008-09 and (2) identifying some of the major issues now facing the Legislature. As such, this document is intended to complement the Analysis of the 2008-09 Budget Bill, which contains our review of the 2008-09 Governor's Budget.

Analysis: Correctional Officer Pay, Benefits, and Labor Relations

The administration proposes a 5 percent raise for correctional officers and legislation to allow it to impose a labor settlement on the officers' union, the California Correctional Peace Officers Association (CCPOA). We find that the officers' compensation levels are sufficient to allow the prisons to meet personnel needs at the present time, but we generally agree with other administration proposals to increase management control in prisons. We note that the dysfunctional relationship between the administration and CCPOA makes it more difficult to address the many issues facing the state's prison and personnel management systems...

California Prison Health Care Receivership 04/06-06/07

In April 2006, the U.S. District Court for the Northern District of California gave the California Prison Health Care Receivership Corporation broad powers over the California Department of Corrections and Rehabilitation's delivery of medical care to prisoners after the court found the department's medical care efforts were "horrifying" and "shocking." The court also found that continued medical malpractice and neglect existed within California prisons. As a result, the court suspended the department secretary's authority over California's prison medical system during the receivership and granted this power to the receiver. The court also ordered the department to pay all costs the receivership incurs in implementing policies, plans, and decisions to carry out its responsibilities...

Analysis of the 2006-07 Budget Bill

From the Introduction section of the Auditor's report:
The department operates 33 adult prisons, including 11 reception centers, a central medical facility, a treatment center for narcotic addicts under civil commitment, and a substance abuse facility for incarcerated felons. The CDCR also operates eight juvenile correctional facilities, including three reception centers. In addition, CDCR manages 13 Community Correctional Facilities, 44 adult and juvenile conservation camps, the Richard A. McGee Correctional Training Center, and 202 adult and juvenile parole offices.