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.

Audit: Effect of CDCR Operations on the State Budget

California Department of Corrections and Rehabilitation:

Inmates Sentenced Under the Three Strikes Law and a Small Number of Inmates Receiving Specialty Health Care Represent Significant Costs

HIGHLIGHTS

Our review of California's increasing prison cost as a proportion of the state budget and California Department of Corrections and Rehabilitation's (Corrections) operations revealed the  following:

• Inmates incarcerated under the three strikes law (striker inmates):
  • Make up 25 percent of the inmate population as of April 2009.
  • Receive sentences that are, on average, nine years longer-resulting in about $19.2 billion in additional costs over the duration of their incarceration.
  • Include many individuals currently convicted for an offense that is not a strike, were convicted of committing multiple serious or violent offenses on the same day, and some that committed strikeable offenses as a juvenile.
• Inmate health care costs are significant to the cost of housing inmates. In fiscal year 2007-08, $529 million was incurred for contracted services by specialty health care providers. Additionally:
  • 30 percent of the inmates receiving such care cost more than $427 million.
  • The costs for the remaining 70 percent averaged just over $1,000 per inmate.
  • The costs for those inmates who died during the last quarter ranged from $150 for one inmate to more than $1 million for another
• A significant portion of the increased workload due to medical guarding and transportation is covered through overtime.
• The large leave balances of custody staff, to which the furlough program has contributed a significant amount, will eventually cost the State from $546 million to more than $1 billion.

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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...

Report: Are Florida’s Private Prisons Keeping Their Promise?

Lack of Evidence to Show They Cost Less and Have Better Outcomes than Public Prisons

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....

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...

Higher Education: Answers to Frequently Asked Questions

Does the State Spend More on Corrections or Higher Education?

About a fifth of the state General Fund budget goes to higher education and corrections combined. State spending in these two areas responds to very different cost pressures, so it is not surprise that funding trends could differ. Nonetheless, the question is commonly asked which sector receives more state support. There is no single answer to the question.  

Special to the Bee: A Letter from Chuck Alexander

While Sacramento police and firefighters are receiving accolades from local officials for making contract concessions during tough times, our governor has summarily rejected any and all attempts by California correctional peace officers to do the same.

With California now reduced to passing out IOUs to cover its growing debts and its credit rating in free fall, the governor's refusal to even consider, let alone enact, any of these cost-saving proposals is puzzling.

We recently offered to reduce future pension obligations, alter sick leave provisions and make other contractual changes that would save California taxpayers more than a billion dollars annually, all of which were flatly rejected by the Schwarzenegger administration.  

Cut the Fat Not The Muscle

While California's inmate population has grown by less than six percent since 2002, the Department of Corrections' administrative bureaucracy has doubled. Billions of dollars could be saved by streamlining operations, reducing bureaucratic staff and eliminating waste and inefficiency - without jeopardizing public safety or increasing the dangers for prison officers and parole agents.

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 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.

MOU Letter “Request for Clarification Regarding Bargain in Good Faith”

Early this year, CCPOA and DPA met at PERB to attend a mandatory settlement conference. Although the case didn't settle, the parties did discuss the December 27, 2007, letter. During that discussion, DPA asked for clarification which was provided by CCPOA legal counsel in a letter to them (DPA) dated January 16, 2008. That letter is important in that it reiterated our position and followed up on the question we specifically asked during that meeting at PERB. The final paragraph of the letter from January 16 states:

If the State is not prepared to return to the bargaining table based on the terms outlined above, please advise me under what terms, if any, the State is prepared to return to the bargaining table.

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.

Analysis of the 2007-08 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, 46 adult and juvenile conservation camps, the Richard A. McGee Correctional Training Center, and 192 adult and juvenile parole offices.