LAO Report: Overview of the May Revision (2012-2013 Budget)

In the May Revision of his 2012-13 budget proposal, the Governor identified a larger budget problem of $15.7 billion for state leaders to address in the coming weeks. While we find that the administration's economic and revenue forecasts are reasonable, we are concerned that the amount of property tax revenues from former redevelopment agencies (RDAs) may be substantially less than the May Revision assumes in 2011-12 and 2012-13. If so, this could increase the state's Proposition 98 school funding obligations and, therefore, the size of the budget problem above administration estimates. Moreover, the administration's $1.4 billion estimate for the amount of General Fund benefit that may be achieved in 2012-13 from transferring former RDAs' liquid cash assets to school districts is highly uncertain.

We advise the Legislature to focus on adopting realistic and ongoing budget actions to continue the progress the state has made in reducing its annual operating, or structural, deficit. We describe and assess the administration's major May Revision proposals. In some cases, we offer alternative ways to achieve the savings targeted by the Governor. With regard to Proposition 98, we offer alternatives to both the Governor's basic budget plan and his trigger plan.

LAO Report: State Should Consider Less Costly Alternatives to CDCR Blueprint

In April 2012, the California Department of Corrections and Rehabilitation (CDCR) released a report (referred to as the “blueprint”) on the administration’s plan to reorganize various aspects of CDCR operations, facilities, and budgets in response to the effects of the 2011 realignment of adult offenders, as well as to meet various federal court requirements (such as reducing the inmate population to meet specified population cap targets). In this brief we (1) summarize and assess the major aspects of the blueprint and (2) present alternative approaches that are available to the Legislature. In our view, much of the administration’s blueprint merits legislative consideration.

However, the General Fund costs of the planned approach—in particular, an estimated $78 million in annual debt service—is a significant trade-off. We find that the state could meet its facility requirements (including those for medical and mental health treatment) and specified population cap targets at much lower ongoing General Fund costs than proposed by the administration, potentially saving the state as much as a billion dollars over the next seven years...
 

LAO Report: Providing Constitutional and Cost-Effective Inmate Medical Care

Inmate Medical Program Under Federal Receivership. In 2006, after finding that California had failed to provide a constitutional level of medical care to its inmates, a federal court appointed a Receiver to take over the direct management and operation of the state’s inmate medical care program from the California Department of Corrections and Rehabilitation (CDCR). Since that time, the current and prior Receiver have taken a variety of actions that appear to have increased the quality of inmate medical care but also dramatically increased state expenditures. The increased cost of the inmate medical care program is partially attributable to several inefficiencies including its (1) inconsistent application of the utilization management system, (2) limited use of telemedicine, and (3) an inefficient management structure...

Summary of LAO Findings and Recommendations on the 2012-13 Budget

Department of Corrections and Rehabilitation Personnel Specialist Staffing Ratios

Reduce CDCRs funding for Personnel Specialists I (PSI) and Personnel Specialist Supervisors (PSS) by $13.1 million in the budget year. This adjustment would provide CDCR with PSI positions on a 300 to 1 ratio and PSS positions on a 5 to 1 ratio, both of which are more consistent with other large state departments...

Governor’s Proposal to Complete Juvenile Justice Realignment

The Governor's Proposal:

Fully Realign Juvenile Justice to Counties. The DJJ would stop receiving new wards on January 1, 2013, though DJJ would continue to house wards admitted to its facilities prior to this date until they are released. After all wards are released from DJJ, counties would be responsible for managing all offenders adjudicated in juvenile courts.

Provide Funding to Counties. The Governor proposes to provide counties with an unspecified amount of ongoing funding beginning in 2013-14 to help them manage the increase in juvenile caseload resulting from the realignment. The Governor also proposes a one-time $10 million General Fund augmentation in 2011-12 to help counties plan for their increased caseload.

Delay Collection of Enacted Fees. Current law requires counties, as of January 1, 2012, to reimburse the state $125,000 per year for each juvenile offender committed by the courts to DJJ. The Governor has delayed the collection of these fees, and proposes to continue delaying collection for an unspecified period, perhaps indefinitely. The administration estimates that this provision would have benefited the General Fund by $60 million in 2011-12 and $125 million in 2012-13...

The 2012–13 Budget: Refocusing CDCR After The 2011 Realignment

In 2011, the state enacted several bills to realign to county governments the responsibility for certain felon offenders who previously had been eligible for state prison and parole. These changes will significantly reduce the inmate and parole populations managed by CDCR. This report identifies the impacts of the realignment of adult offenders on CDCR's operations and facility needs, discusses whether realignment will enable the state to meet the prison population limit required by the federal court, as well as whether the change in the makeup of CDCR's inmate population following realignment will affect its housing, mental health, and medical facility needs. The report provides recommendations on how to better match CDCR facilities and programs with the remaining inmate population following the realignment...

The 2012-13 Budget: The 2011 Realignment of Adult Offenders—An Update

In 2011, the state enacted several bills to enact a wide-ranging “realignment,” shifting several state programs and a commensurate level of revenues to local governments.

Perhaps the most significant programmatic change implemented as part of the 2011 realignment was realigning to county governments the responsibility for managing and supervising certain felon offenders who previously had been eligible for state prison and parole.

This report provides an update on the status of realignment, reviews changes proposed by the Governor, and makes several recommendations designed to promote the long-term success of realignment, such as creating a reserve fund for revenue growth as well as designing an ongoing allocation formula that is responsive to future demographic changes...

2012-2013 LAO Report: Completing Juvenile Justice Realignment

Over the past 16 years, the Legislature has enacted various measures which realigned to counties a significant share of responsibility for managing juvenile offenders. Under current law, only juveniles adjudicated for a serious, violent, or sex offense can be sent to state facilities by the juvenile courts. As a result, 99 percent of juvenile offenders are housed or supervised by counties.

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.

2011 Realignment Report (LAO)

As part of the 2011-12 budget plan, the Legislature enacted a major shift—or “realignment”—of state program responsibilities

and revenues to local governments. In total, the realignment plan provides $6.3 billion to local governments (primarily counties) to fund various criminal justice, mental health, and social services programs in 2011-12, and ongoing funds for these programs annually thereafter...

LAO analysis of pension reduction initiative

This is the summary from LAO:

This measure provides that public employee defined pension benefits in California can only allow for "full retirement ages" of 62 years of age or older. This provision of the measure states that it would apply to public employees who are employed on the day after this measure is approved by the state's voters, notwithstanding the Contract Clause of the State Constitution.

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...

Elderly Inmates in California Prisons

According to the California Department of Corrections and Rehabilitation (CDCR), the percentage of inmates over the age of 55 has more than doubled over the past decade, from 3 percent (or about 4,900 inmates) in 2000, to 8 percent (or about 13,600 inmates) in 2010.

The department projects that the percentage of inmates over the age of 55 will continue to increase over the next few years to about 12 percent of the prison population by 2015.

Substance Abuse Treatment Programs in the Criminal Justice System

Three Major Types of Substance Treatment Programs for Offenders:

• Community-Based Diversion Programs. Programs provided to offenders in the community in lieu of prison or a jail sentence.
• In-Prison Programs. Programs provided to offenders while in state prison.
• Parolee Programs. Programs provided to parolees in the community, mostly on a voluntary basis, upon release from prison.

Proposition 36 Programs

Overview. Proposition 36 (the Substance Abuse and Crime Prevention Act of 2000) changed state law so that certain adult offenders who use or possess illegal drugs are sentenced to participate in drug treatment and supervision in the community rather than being sentenced to prison or jail...

Reducing the Ward and Parolee Populations at the Division of Juvenile Facilities

Overview of Division of Juvenile Facilities

Background. The Division of Juvenile Facilities (DJF), the statutory name for the agency often referred to as the Division of Juvenile Justice, is responsible for the housing, supervision, and rehabilitation of individuals that have been committed to their custody. As a result of Chapter 175, Statutes of 2007 (SB 81, Committee on Budget and Fiscal Review), only juveniles who are violent, serious, or sex offenders are committed to DJF.

Characteristics of Wards. As of December 31, 2009, about 1,600 wards (generally ages 13 to 25, average age of 19) reside in DJF institutions. Males comprise about 95 percent of the ward population. Latinos account for roughly 60 percent of the total population, while African-Americans make up about 30 percent of the population. Whites and other races make up the remaining 10 percent.

Juvenile Facilities. The DJF is comprised of fi ve youth correctional facilities and two camps. Recently, DJF closed the Herman G. Stark Youth Correctional Facility in Chino...

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.

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...

The 2010-11 Budget: Assessing the Prison Population Reduction Proposal

As part of the January 2010 special session to begin bringing the 2009‑10 and 2010‑11 budgets into balance, the Governor proposes statutory changes to reduce the state’s inmate and parolee populations. Specifically, the Governor proposes to require that offenders who have no prior serious or violent offenses and are convicted of certain property and drug felony crimes serve a maximum sentence of one year and one day in county jail in lieu of a state prison sentence.

The administration estimates that, if approved by March 1, 2010, these changes would reduce state correctional costs by $25.2 million in 2009‑10 and $291.6 million in 2010‑11. In this brief, we (1) analyze the Governor’s proposal, particularly in the context of recent policy actions to reduce the inmate and parole populations, and (2) recommend modifying the Governor’s proposal to permit counties to place additional jail inmates on electronic home monitoring...

California Out-of-State Correctional Facility Program

Overview of Out-of-State Bed Program

Mission. The California Out-of-State Correctional Facility (COCF) program is administered by the California Department of Corrections and Rehabilitation (CDCR). Its mission is to transfer inmates out of state for the purpose of temporarily alleviating overcrowding within existing state prisons.

Number of Inmates. The department currently has 8,021 male inmates housed in fi ve out-of-state facilities. Inmates housed in these facilities are generally highersecurity level inmates. Most inmates have been transferred involuntarily. Inmates with serious medical and mental health issues are generally excluded from the program...