The 2014-15 Budget: Governor's Criminal Justice Proposals

The 2014-15 Budget: Governor’s Criminal Justice Proposals MAC TAYLOR • L E G I S L A T I V E A N A L Y S T • FERBRUARY 19, 2014 2014-15 BUDGET CONTENTS Executive Summary ............................................................................................................................3 Criminal Justice Budget Overview ....................................................................................................5 Judicial Branch ....................................................................................................................................7 Overview ............................................................................................................................................................................7 $100 Million General Fund Augmentation for Trial Court Operations .......................................................8 Trial Court Reserves Policy ........................................................................................................................................16 California Department of Corrections and Rehabilitation ............................................................19 Adult Prison Population Projected to Increase and Parolee Population Projected to Decline .........................................................................................................20 Prison Staffing and Overtime .................................................................................................................................23 Academy Augmentation ...........................................................................................................................................31 Drug Interdiction Proposal .......................................................................................................................................33 Federal Receiver for Inmate Medical Services ...................................................................................................35 Capital Outlay ................................................................................................................................................................42 Local Public Safety............................................................................................................................44 Overview .........................................................................................................................................................................44 County Jails Grants .....................................................................................................................................................44 Requiring Sentences Longer Than Ten Years Be Served in State Prison ...................................................49 Changes to Split Sentencing ...................................................................................................................................50 POST .................................................................................................................................................................................52 Summary of LAO Recommendations ..............................................................................................55 2 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET EXECUTIVE SUMMARY Overview. The Governor’s budget proposes a total of $14.1 billion from various fund sources for judicial and criminal justice programs in 2014-15. This is an increase of $543 million, or about 4 percent, above estimated expenditures for the current year. The budget includes General Fund support for judicial and criminal justice programs of $11.1 billion in 2014-15, which is an increase of $348 million, or about 3 percent, over the current-year level. In this report, we assess many of the Governor’s budget proposals in the judicial and criminal justice area and recommend various changes. Below, we summarize our major recommendations, and provide a complete listing of our recommendations at the end of the report. Trial Court Funding. The Governor’s budget proposes a $100 million General Fund augmentation for trial court operations. Given the limited availability of resources to help trial courts absorb an increasing amount of ongoing reductions in 2014-15, as well as legislative concerns regarding the likely negative impacts of such challenges on court users, we find that the proposed augmentation merits consideration. However, we recommend the Legislature define its priorities for how the increased funding should be spent, consider implementing more operational efficiencies, and establish a comprehensive trial court assessment program. In addition, we recommend that the Legislature modify the existing trial court reserves policy to address some or all of the unintended challenges resulting from the policy including issues related to cash flow, contract expenditures, future project funding, and incentives for implementing efficiencies. Correctional Relief Staffing and Overtime. The Governor’s budget provides a total of $207.2 million in General Fund support to the California Department of Corrections and Rehabilitation (CDCR) for correctional officer overtime. Our analysis indicates that CDCR’s overtime budget is unnecessarily large. This is because the department can use savings resulting from vacant positions to cover some of its overtime costs. As such, we recommend that the Legislature reduce CDCR’s overtime budget by $104 million in 2014-15. In addition, the administration proposes to revise the way it budgets for relief officers who fill in for correctional employees that are away on leave. However, we found several inefficiencies in the way CDCR budgets for relief officers. For example, the department staffs relief officers based on the average amount of leave used by correctional employees annually, despite the fact that there is seasonal variation in the amount of leave such employees use. Moreover, CDCR does not make adequate use of Permanent Intermittent Correctional Officers (PICOs), who also can fill in for absent officers, but are more flexible and cost less than relief officers. To address these issues, we recommend that the Legislature direct the department to revise the way it staffs relief officers and PICOs. Additional Funding for Jail Construction. In order to address changes in the jail population related to the 2011 realignment, the Governor’s budget proposes $500 million in lease-revenue bonds for county jail construction projects. However, we find that the www.lao.ca.gov Legislative Analyst’s Office 3 2014-15 BUDGET administration has not carried out an adequate analysis of the extent to which counties need additional funds. Accordingly, we recommend that the Legislature direct the administration to carry out such an analysis by assessing (1) the extent to which counties have maximized the use of existing jail space, (2) how effectively counties plan to use any proposed space for rehabilitation programs, and (3) the ability of counties to fund projects with local resources. 4 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET CRIMINAL JUSTICE BUDGET OVERVIEW The primary goal of California’s criminal Decline in Corrections Spending. The primary justice system is to provide public safety by reason for the decline in spending on corrections deterring and preventing crime, punishing over this time period is the impact of various individuals who commit crime, and reintegrating policy changes enacted to reduce the state’s prison criminals back into the community. The state’s population. The state took these actions to help major criminal justice programs include the court reduce state spending and comply with a federal system, the CDCR, and the Department of Justice. court order to reduce prison overcrowding, as well The Governor’s budget proposes total expenditures as to achieve improved criminal justice outcomes. of $14.1 billion for judicial and criminal justice Some of the actions taken include (1) providing programs. Below, we describe recent trends in counties a fiscal incentive to reduce the number of state spending on criminal justice and provide an felony probationers that fail on probation and are overview of the major changes in the Governor’s sent to state prison, (2) increasing the number of Graphic Sign Off proposed budget for criminal justice programs in credits inmates can earn to accelerate their release 2014-15. date from prison, (3) making certain parolees who Secretary violate a term of their parole ineligible for return Analyst State Expenditure Trends to prison, and (4) increasing the dollar threshold MPA Over the past decade, total state spending on for certain property crimes to be considered a Deputy criminal justice programs has varied. In particular, felony, thus making fewer offenders eligible for criminal justice spending declined in recent years prison. The most significant of these changes, but increased in 2013-14 and is proposed to further however, happened with the passage of the 2011 increase in 2014-15 under the Governor’s budget. As shown in Figure 1, state spending on criminal justice Figure 1 State Criminal Justice Expenditures peaked in 2007-08 at about $15 billion. In comparison, (In Billions) state spending on Other Funds $16 General Fund criminal justice was about 14 $12 million in 2012-13, reflecting a continued 12 decline since 2010-11. As 10 we discuss below, much of this decline was related to 8 reduced expenditures on the 6 state’s judicial branch and 4 correctional system. 2 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 www.lao.ca.gov Legislative Analyst’s Office 5 ARTWORK #140055 Template_LAOReport_mid.ait 2014-15 BUDGET realignment which, among other changes, shifted in the figure, total spending on criminal justice various criminal justice responsibilities from the programs is proposed to increase from an estimated state to counties. In particular, the 2011 realignment $13.6 billion in the current year to $14.1 billion in the made felons generally ineligible for state prison budget year. This is an increase of 4 percent. General unless they had a current or prior conviction for a Fund spending is proposed to increase 3.2 percent serious, violent, or sex-related offense. By the end over current-year expenditure levels. of 2012-13, realignment had reduced the prison Major Budget Proposals. Most of the proposed population by tens of thousands of inmates. increase in spending is for CDCR and the judicial Decline in Judicial Branch Spending. The state’s branch. For example, increased funding of recent fiscal crisis also resulted in significant General $261 million is provided to CDCR to help meet Fund reductions to the judicial branch, particularly the population cap ordered by the federal courts. the trial courts. The judicial branch has received The Governor’s budget also provides increased a series of one-time and ongoing General Fund funding to CDCR for additional costs related to reductions since 2008-09. By 2012-13, the branch had worker’s compensation, and employee salary and received ongoing General Fund reductions totaling training. In addition, the proposed budget includes $778 million. Of this amount, $724 million in Figure 2 reductions were allocated Judicial and Criminal Justice Budget Summary to the trial courts. (Dollars in Millions) However, various one-time Change From 2013-14 Actual Estimated Proposed and ongoing solutions 2012-13 2013-14 2014-15 Actual Percent were used to offset most of CDCR $8,742 $9,441 $9,833 $391 4.1% the reductions to the trial General Funda 8,551 9,281 9,513 232 2.5 Special and other funds 191 160 320 160 99.7 courts. As we discuss later Judicial Branch $2,825 $3,117 $3,274 $157 5.0% in this report, despite these General Fund 748 1,220 1,325 105 8.6 offsets, the trial courts had Special and other funds 2,077 1,897 1,949 52 2.7 to take various actions to Department of Justice $660 $769 $771 $2 0.2% absorb some reductions, General Fund 154 178 194 17 9.3 Special and other funds 507 591 577 -15 -2.5 which impacted court BSCC $95 $129 $134 $5 3.8% services differently across General Fund 40 44 45 1 1.2 courts. Special and other funds 55 85 89 4 5.2 Other Departmentsb $138 $125 $114 -$12 -9.3% Governor’s Budget General Fund 82 64 58 -6 -9.8 Proposal Special and other funds 56 61 56 -5 -8.9 Totals, All $12,460 $13,582 $14,125 $543 4.0% Figure 2 summarizes Departments expenditures from all fund General Fund 9,574 10,787 11,135 348 3.2 sources for criminal justice Special and other funds 2,886 2,795 2,990 196 7.0 a programs in 2012-13 and Does not include revenues to General Fund to offset corrections spending from the federal State Criminal Alien Assistance Program. as revised and proposed by b Includes Office of the Inspector General, Commission on Judicial Performance, Victims Compensation and Government Claims Board, Commission on Peace Officer Standards and Training, State Public Defender, and debt service on general obligation the Governor for 2013-14 bonds. CDCR = California Department of Corrections and Rehabilitation and BSCC = Board of State and Community Corrections. and 2014-15. As shown Detail may not total due to rounding. 6 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET a $105 million General Fund augmentation for the estimates. As shown in Figure 3, total funding judicial branch—$100 million to support trial court for the criminal justice programs realigned is operations and $5 million to support state level court expected to increase from $2.1 billion in 2012-13 to and Judicial Council operations. $2.3 billion in 2014-15. Realignment Funding. As mentioned above, In addition to the funds provided to counties the 2011 realignment shifted several criminal justice directly through the 2011 realignment legislation, programs from state to county responsibility. Along the state has also authorized lease-revenue bonds with the shift of these programs, state law shifted a to fund the construction and modernization of share of the state sales tax, as well as Vehicle License county jails following the realignment. Specifically, Fee revenue, to local governments. The passage of Chapter 42, Statutes of 2012 (SB 1022, Committee on Proposition 30 by voters in November 2012, among Budget and Fiscal Review), authorized $500 million other changes, permanently guaranteed these to help counties construct and modify jails to revenues to local governments. The Governor’s accommodate longer-term inmates who have been budget includes an estimate of revenues projected shifted to county responsibility. The Governor’s to go to local governments over the next few years. budget for 2014-15 proposes that an additional These estimates are generally in line with prior $500 million in lease-revenue bonds be authorized to support the construction of county facilities. JUDICIAL BRANCH Overview Figure 4 (see next page) shows total funding for the judicial branch from 2000-01 through The judicial branch is responsible for the 2014-15. As shown in the figure, funding for the interpretation of law, the protection of an individual’s branch peaked in 2010-11 at roughly $4 billion and rights, the orderly settlement of all legal disputes, and then subsequently declined through 2012-13. This the adjudication of accusations of legal violations. decline is primarily due to significant reductions The branch consists of statewide courts (the Supreme in the level of General Fund support provided Court and Courts of Appeal), trial courts in each of to the branch during this time period. We note, the state’s 58 counties, and statewide entities of the however, that total funding for the judicial branch branch (the Judicial Council, Judicial Branch Facility Program, and the Habeas Figure 3 Corpus Resource Center). Estimated Revenues to Counties for The branch receives 2011 Realignment of Criminal Justice Programs revenues from several (In Millions) funding sources including 2012-13 2013-14 2014-15 the state General Fund, civil filing fees, criminal Community corrections $930 $1,063 $1,094 Trial court security 508 517 538 penalties and fines, county Law enforcement grants 490 490 497 maintenance-of-effort Juvenile justice grants 110 119 140 payments, and federal District attorneys and public defenders 20 21 27 Totals $2,058 $2,210 $2,296 grants. www.lao.ca.gov Legislative Analyst’s Office 7 2014-15 BUDGET increased in 2013-14 and is proposed to increase in $100 Million General 2014-15 under the Governor’s budget. Specifically, Fund Augmentation for the 2013-14 Budget Act included a $63 million Trial Court Operations General Fund augmentation for the judicial branch and the Governor’s budget for 2014-15 Background proposes an additional $105 million General Fund Prior-Year Budget Reductions and Offsets. augmentation. Under the Governor’s budget, the The judicial branch received a series of one-time General Fund share of the total judicial branch and ongoing General Fund reductions from budget will be 33 percent in 2014-15. 2008-09 through 2012-13. By 2012-13, the branch As shown in Figure 5, the Governor’s budget had received ongoing General Fund reductions proposes $3.3 billion from all state funds to totaling $778 million. Of this amount, $724 million support the judicial branch in 2014-15, an increase in ongoing General Fund reductions were allocated of $157 million, or 5 percent, above the revised to the trial courts. However, the 2G01r3a-1p4h biucd gSeti gn Off amount for 2013-14. (These totals do not include provided a $60 million General Fund augmentation expenditures from local revenues or trial court Secretary to the trial courts to help offset these reductions. reserves.) Of the total budget proposed for the Analyst Specifically, the augmentation reduced the total judicial branch in 2014-15, roughly $1.3 billion is MPA ongoing General Fund reductions to the trial courts from the General Fund. This is a net increase of Deputy to $664 million in 2013-14. about $105 million, or 8.6 percent, from the 2013-14 Additionally, since 2008-09, the Legislature level. and Judicial Council (the policymaking and governing body of the judicial branch) used various Figure 4 Total Judicial Branch Funding (In Billions) $5 Other Funds Realigned Court Securitya 4 General Fund 3 2 1 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10b 10-11b 11-12 12-13 13-14 14-15 (Estimated)(Proposed) a 2011 realignment shifted responsibility for funding most court security costs from the state General Fund to counties. Figure displays estimated county spending on court security for comparison purposes. b General Fund amounts include use of redevelopment funds for trial courts on a one-time basis—$1.3 billion in 2009-10 and $350 million in 2010-11. ARTWORK #140055 8 Legislative Analyst’s Office www.lao.ca.gov Template_LAOReport_mid.ait 2014-15 BUDGET one-time and ongoing solutions to offset most of for court services and hearings, and courts being the reductions to the trial courts. Such solutions unable to complete workload in a timely manner. included using revenues from increased fines In order to help minimize the extent to which and fees, transfers from judicial branch special these operational actions affected court users, a funds, and trial court reserves. (Reserves are the number of courts also made various changes to accumulation of unspent funds from prior years their operations. These changes include installing that are carried over and kept by each trial court.) dropboxes for individuals to submit court Despite most of the reductions being offset, paperwork when clerks’ offices are closed and the trial courts still had to absorb $215 million in purchasing kiosks where individuals can pay for General Fund reductions in 2013-14. (We would traffic tickets. In addition, some courts have made note that some courts may have used one-time multiyear investments to operate more efficiently. resources to absorb their share of this reduction For example, some courts have shifted to electronic in 2013-14. Such courts will have to absorb these filing of documents in certain case types and reductions again in 2014-15. In contrast, other developed online systems where individuals can courts may have absorbed more than their share automatically schedule hearings for select case of the reduction in 2013-14 in order to plan types. ahead for additional ongoing reductions the New Funding Allocation Methodology. In following year.) Trial courts have taken various April 2013, the Judicial Council approved a new actions to accommodate these reductions. These method for allocating funds appropriated for actions include leaving staff vacancies unfilled, trial court operations in the annual state budget renegotiating contracts with employees and to individual trial courts. This new methodology, vendors, delaying purchases, closing courtrooms also known as the Workload Allocation Funding or courthouses, reducing clerk office hours, and Methodology (WAFM), is intended to distribute reducing self-help and family law services. While funding among the trial courts based on workload. the impacts of these actions vary across courts and (Previously, such funding was allocated on a depend on the specific operational choices made by “pro rata” basis, generally based on the historic each court, some of these actions have resulted in share of statewide allocations received by each reduced access to court services, longer wait times trial court.) Specifically, the new formula starts Figure 5 Judicial Branch Budget Summary—All State Funds (Dollars in Millions) Change From 2013-14 2012-13 2013-14 2014-15 Actual Estimated Proposed Amount Percent State Trial Courts $2,237 $2,443 $2,531 $88 3.6% Supreme Court 43 44 45 1 1.5 Courts of Appeal 202 208 211 3 1.6 Judicial Council 135 142 141 -1 -0.4 Judicial Branch Facility Program 195 267 332 65 24.3 Habeas Corpus Resource Center 13 14 14 — 1.4 Totals $2,825 $3,117 $3,274 $157 5.0% www.lao.ca.gov Legislative Analyst’s Office 9 2014-15 BUDGET with a Resource Assessment Study (RAS), which increasing the amount allocated by WAFM. estimates the number of personnel needed for each Therefore, under the branch’s plan, additional court primarily based on the number of filings for funding will result in a greater share of trial court various case types and the amount of time it takes funding allocated using WAFM. The judicial staff to process each filing. Each court’s estimated branch reports that it would take a cumulative staffing need is then converted to a cost estimate $700 million augmentation for all trial court for personnel and combined with various other operations funding to be allocated under WAFM. cost factors not captured in the RAS model (such Governor’s Proposal as workload costs and other factors considered unique to a specific trial court) to determine the The Governor’s budget for 2014-15 proposes total estimated workload-driven costs for each trial an ongoing General Fund augmentation of court. The total cost for each court is then used $100 million to support trial court operations. (The to determine that court’s percentage of total trial budget also provides a $5 million augmentation court operations costs. These percentages are then to support state level courts and Judicial Council applied to the funding appropriated to the trial operations.) The budget requires that the additional courts in the state budget to determine how much funding be allocated based on WAFM. However, funding each individual trial court will receive that the trial courts would have flexibility in spending year. these funds. Beginning in 2013-14, the judicial branch Augmentation Reduces Ongoing Reductions. implemented a five-year plan to phase in the As discussed previously, the total ongoing General implementation of its new allocation methodology. Fund reductions to the trial courts totaled Under the plan, a greater percentage of funds $664 million 2013-14. The Governor’s augmentation appropriated for trial court operations will be would reduce these ongoing reductions to allocated using WAFM each year with a lesser $564 million for 2014-15. As shown in Figure 6, amount being allocated under the old methodology. the budget assumes that $249 million in resources Upon full implementation, 50 percent of trial court will be available to help offset a portion of this operations funding will be allocated using WAFM, reduction. This leaves $315 million in reductions and 50 percent will be allocated using the old pro that will have to be absorbed by trial courts in rata percentages. However, the branch intends to 2014-15, a net increase of $100 million over the allocate any augmentations provided to trial court amount already assumed to be absorbed by the trial operations (such as the $60 million General Fund courts in 2013-14. This net increase in reductions augmentation provided in the 2013-14 budget) results from the lack of trial court reserves available based on the WAFM model, unless the funding to offset ongoing reductions. is provided for a specified purpose (such as for Challenges to Addressing court interpreters for example). To the extent such Ongoing Budget Reductions additional funding is provided, the branch will shift an equivalent amount of funding from the Increased Employee Benefit Costs. The trial amount allocated based on the old methodology to courts indicate that they will face increased the amount allocated based on WAFM (referred to cost pressures in 2014-15 related to growing as the “dollar-for-dollar match”), thereby reducing retirement and benefit costs. Currently, individual the amount allocated using the old method and trial courts (primarily presiding judges and/ 10 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET or court executive officers) conduct separate In recent years, concerns have been raised and independent negotiations with local labor regarding whether trial courts have been effectively organizations representing most trial court containing costs in their negotiations with trial employees. This differs from the collective court employees. For example, the Governor’s bargaining process for most state employees, where Budget Summary raises the concern that trial the California Department of Human Resources court employees in a number of courts are not oversees statewide labor negotiations on behalf (1) making retirement contributions or (2) making of the Governor. In addition, unlike memoranda contributions in a manner similar to executive of understanding (MOU) negotiated with state branch employees, who are generally required to employees, agreements negotiated with trial court contribute 8 percent to 10 percent of their salary employees are not subject to ratification by the towards these costs. In view of such concerns, the Legislature and cost increases are not automatically administration has not proposed additional funding included in the budget. Moreover, some trial specifically for increased trial court retirement and court employees continue to participate in county benefit costs since 2010-11. According to the judicial retirement and health benefit programs. As a branch, these unfunded cost increases will reach result, both the state and individual trial courts an estimated $64.1 million by the end of 2013-14. lack control over the level of these benefits set Without additional resources to support these costs, by the counties and provided to these trial court trial courts will use more of their operational funds employees, and more importantly, the costs that to meet these obligations, which could result in must be paid to provide those benefits. reduced levels of service to the public. Figure 6 Trial Courts Budget Reductions Through 2014-15 (In Millions) 2013-14 2014-15 2008-09 2009-10 2010-11 2011-12 2012-13 (Estimated) (Budgeted) General Fund Reduction One-time reduction -$92 -$100 -$30 — -$418 — — Ongoing reductions (cumulative) — -261 -286 -$606 -724 -$664 -$564 Total Reductions -$92 -$361 -$316 -$606 -$1142 -$664 -$564 Solutions to Address Reduction Construction fund transfers — $25 $98 $213 $299 $55 $55 Other special fund transfers — 110 62 89 102 52 52 Trial court reserves — — — — 385 200 — Increased fines and fees — 18 66 71 121 121 121 Statewide programmatic changes — 18 14 19 21 21 21 Total Solutions — $171 $240 $392 $928 $449 $249 Reductions Allocated to the Trial -$92 -$190 -$76 -$214 -$214 -$215 -$315 Courtsa a Addressed using various actions taken by individual trial courts, such as the implementation of furlough days and reduced clerk hours, as well as use of reserves (separate from those mandated by budget language or Judicial Council). www.lao.ca.gov Legislative Analyst’s Office 11 2014-15 BUDGET Few Statutory Changes to Increase Efficiency potential sources for temporary cash flow loans, Adopted to Date. In 2012-13, the Legislature which places further constraints on the availability requested that the judicial branch submit a report of these funds to offset reductions. on potential operational efficiencies, including Similarly, trial courts used their reserves those requiring statutory amendments. The to minimize the impact of ongoing funding Legislature’s intent was to identify efficiencies that, reductions upon court users. However, the repeated if adopted, would help the trial courts address use of reserve funds over the past five years and their ongoing budget reductions. In May 2012, the full implementation of the new trial court the judicial branch submitted to the Legislature reserves policy mean minimal reserve funds will a list of 17 measures that would result in greater be available to help offset budget reductions in operational efficiencies or additional court 2014-15. (We discuss the reserves policy in more revenues. (Our publication, The 2013-14 Budget: detail later in this report.) Governor’s Criminal Justice Proposals, describes Limited Ability to Increase Revenues to Offset in detail many of these measures.) However, Reductions. The Legislature has approved increases only four administrative efficiencies and user fee in criminal and civil fines and fees in recent years increases have subsequently been implemented to to fund court facility construction projects and date. In order to effectively absorb ongoing budget to offset reductions to trial court funding. As can reductions, additional changes to make the courts be seen in Figure 7, revenues from the recent fee operate more efficiently will likely need to be increases are projected to decline in 2013-14 but adopted. will generally meet the original revenue estimates Less Resources Available to Offset Reductions. of the courts. Moreover, revenues for most of the Over the last five years, the state has transferred individual fee increases are lower than what was funds from various judicial branch special funds projected. This could be an indication that, at (such as those related to court construction) to least for some fines and fees, additional increases help offset budget reductions to the trial courts. may not result in as much revenue as previously However, the availability of resources from these achieved. This could also be a signal of reduced funds to offset reductions in the budget year will be access to justice as fewer people are accessing the limited. For example, most of the transfers to the civil court process because of the increased costs. trial courts have come from three special funds: the Augmentation May Only Minimize State Court Facilities Construction Fund (SCFCF), Further Service Reductions the Immediate and Critical Needs Account (ICNA), and the State Trial Court Improvement Access to Court Services May Not Substantially and Modernization Fund (IMF). However, the Increase. While the Governor’s budget provides an repeated transfer of dollars from these three funds additional $100 million in ongoing General Fund has greatly reduced their fund balances. As a result, support for trial court operations, these funds may additional transfers would likely delay planned not result in a substantial restoration of access to projects or reduce certain services typically court services. First, the Governor’s budget does supported by the fund (such as judicial education not include a list of priorities or requirements for programs and self-help centers). Additionally, as the use of these additional funds, such as requiring we discuss in the next section, the fund balances that they be used to increase public access to for the SCFCF and ICNA have been identified as court services. We note that the 2013-14 budget 12 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET requires that the trial courts use the $60 million • Operational Actions Taken to Address augmentation provided to specifically increase Reductions. Trial courts also differ in the access to court services, as well as report on both operational choices they made over the the expected and actual use of the funds. Second, past few years to address their ongoing as discussed above, trial courts (1) face increased reductions. For example, some courts may cost pressures in 2014-15 and (2) will need to take have addressed most or all of their share actions to absorb around $100 million in additional of ongoing reductions through actions ongoing prior-year reductions as one-time solutions that resulted in ongoing savings. Thus, previously used to offset these reductions will no these particular courts may be able to use longer be available in 2014-15. Thus, trial courts will their share of the augmentation to restore need to take actions to absorb these cost increases services to the public. Other courts may and reductions on an ongoing basis, which could have used limited-term solutions. To the include further operational reductions. In view of extent that such limited-term solutions the above, it is possible that the increased funding are no longer available, these courts will proposed in the Governor’s budget will only need to use more of the augmentation as a minimize further reductions in court services. backfill to help minimize further service Impact of Funding Increase Will Vary by reductions. Court. We would also note that the impact of the • WAFM Funding. The implementation of proposed funding increase will vary across courts. WAFM impacts individual trial courts This is because there are differences in: differently. The old prorata allocation • Cost Pressures Faced by Courts. Individual methodology preserved existing funding trial courts face different cost pressures. For example, some trial courts Figure 7 may have better Total Revenues From Recent Fee Increases controlled (Revenues in Millions) retirement 2012-13 Current Revenue and health Fee Initial Revenue Revenues Projections for Fee or Penalty Increase Projections (Actual) 2013-14a costs through Increased in 2010-11 negotiations with Summary Judgment Fee $300 $6.2 $5.3 $4.7 employees, and Telephonic Hearing Fee 20 6.0 7.1 3.9 therefore may be First Paper Filing Fee 20 or 40 40.1 31.8 30.6 Pro Hac Vice Fee 250 0.8 0.5 0.5 free to use more Parking Citation Penalty 3 10.5 25.5 21.3 of the proposed Total New Revenues $63.6 $70.3 $61.0 augmentation for Increased in 2012-13 other purposes, Jury Deposit Fee $150 $11.7 $17.9 $11.5 Motion Fee 20 8.3 7.6 7.4 such as increasing First Paper Filing Fee 40 21.1 20.4 20.5 services to the Will Deposit Fee 50 2.2 1.0 1.0 public. Complex Case Fee 450 7.1 11.3 13.3 Total New Revenues $50.4 $58.2 $53.8 a Estimated using partial-year revenues received through November 30, 2013. www.lao.ca.gov Legislative Analyst’s Office 13 2014-15 BUDGET inequities among the trial courts, as it oversight to ensure that the additional funds was based on the historic share of funding provided are used to meet legislative priorities. received by courts rather than workload Consider Implementing More Efficiencies. faced by the court. The WAFM corrects We recommend that the Legislature consider these inequities by redistributing funds further actions to help the trial courts operate among the courts based on workload. Thus, more efficiently. For example, the Legislature could courts that historically have had more reevaluate the proposed statutory changes that funding relative to their workload will were not enacted last year. These changes would benefit very little from the augmentation allow the courts to do more with existing dollars, proposed by the Governor. In contrast, thereby minimizing the impact of their budget courts with less funding relative to their reductions. Additionally, in conversations with workload will benefit comparatively more courts and other judicial branch stakeholders, a from the augmentation. number of other such statutory changes exist that would increase efficiency. For example, courts have LAO Recommendations informed us that under current law, they may only discard death penalty files and exhibits upon the Define Legislative Funding Priorities for execution of the defendant. Since most individuals Proposed Augmentation. Given the cost increases on death row are not executed but die due to in employee benefits and the limited availability of natural causes, courts cannot destroy their case resources to help trial courts absorb an increasing records and bear the costs of storing these files and amount of ongoing reductions in 2014-15, as well exhibits indefinitely. The Legislature could modify as legislative concerns regarding the likely negative current law to allow death penalty files and exhibits impacts of such challenges on court users, we to be discarded on the death of the defendant, find that the Governor’s proposed $100 million regardless of how the defendant died, which would augmentation merits consideration. However, if the reduce storage costs. Such changes could help Legislature determines that (1) further minimizing provide the judicial branch with additional ongoing the amount of additional impacts on court users savings or revenues that could help further offset is a statewide priority and (2) efficiencies or other ongoing reductions. If the Legislature is interested options do not allow the courts to provide the level in implementing a broader range of efficiencies of service it desires, the Legislature could chose to beyond those already proposed, it could consider provide additional General Fund support on either convening a task force to identify and recommend a one-time or an ongoing basis. efficiencies, as we discuss in greater detail in the Regardless of the amount of additional nearby box. funding provided to the trial courts in 2014-15, Establish Comprehensive Trial Court we recommend that the Legislature establish Assessment Program. Currently, there is priorities for how the increased funding should insufficient information to assess whether trial be spent—for example, increasing access to court courts are using the funding provided in the annual services. We also recommend that the Legislature budget effectively. This makes it difficult for the require the courts to report on the expected use of Legislature to ensure that (1) certain levels of access such funds prior to allocation and on the actual use to courts services are provided, (2) trial courts of the funds near the end of the fiscal year. Such use existing and increased funding in an effective information would allow the Legislature to conduct 14 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET manner, and (3) funding is allocated and used believe that it will first be important for the consistent with legislative priorities. For example, it Legislature to solicit input from the Judicial is unclear exactly how each trial court has absorbed Council. Thus, we recommend the Judicial Council past reductions and how such actions have report to the Legislature by a specified date on impacted court outcomes. Thus, we recommend its recommendations regarding appropriate that the Legislature take steps towards establishing measurements. In preparing this report, the a comprehensive performance assessment program Judicial Council should examine the measurements for the trial courts. (We initially made such a currently used by federal courts and other state recommendation in our 2011 report, Completing courts. the Goals of Trial Court Realignment.) While After the Legislature adopts specific the judicial branch collects some statewide performance measurements for the trial courts information related to certain measures of trial in statute, and once data on these measurements court performance (such as the time it takes a have been reported by the Judicial Council for at court to process its caseload), it currently lacks a least two years, we recommend that the Legislature comprehensive set of measurements for which data establish a system for holding individual courts is collected consistently on a statewide basis. accountable for their performance relative to In developing a comprehensive performance those standards. Such an accountability system assessment program, we first recommend that would involve the establishment of (1) a specific the Legislature specify in statute the specific benchmark that the courts would be expected performance measurements it believes are most to meet for each measurement and (2) steps that important and require the Judicial Council to would be taken should the court fail to meet the collect data on each measurement from individual benchmark over time (such as by requiring a trial courts on an annual basis. In determining court that fails to meet a benchmark to adopt the the specific performance measurements, we practices of those courts that were successful in meeting the same performance benchmark). Legislature Could Convene a Task Force to Recommend Efficiencies The Legislature could consider convening an independent task force—consisting of a broad range of judicial branch stakeholders—to comprehensively evaluate court processes and identify operational efficiencies that would reduce costs to the courts, improve delivery of court services, and increase access to court services. Although similar task forces have been convened in the past, these groups have only provided the Legislature with recommendations for which there is unanimous consensus. Consequently, the recommendations of these task forces have been limited in scope. To maximize the menu of efficiencies available for legislative consideration, the Legislature could direct the task force to identify all efficiencies proposed by stakeholders, along with an assessment of each efficiency’s impact (fiscal or otherwise). Dissenting members would then be allowed to provide their concerns and rationale for opposition. This would then enable the Legislature to consider a broad range of efficiencies as well as the fiscal and policy implications of each option. www.lao.ca.gov Legislative Analyst’s Office 15 2014-15 BUDGET Trial Court Reserves Policy programs, or unavoidable funding shortfalls. Any unexpended funds in the statewide reserve would Background be distributed to the trial courts on a prorated basis at the end of each fiscal year. Use of Trial Court Reserves. Chapter 850, New Reserves Policy Amended in 2013-14. Statutes of 1997 (AB 233, Escutia and Pringle), As part of the 2013-14 budget package, the allowed the Judicial Council to authorize trial Legislature approved legislation modifying the courts to establish reserves to hold any unspent reserves policy to address some concerns that funds from prior years. Chapter 850 did not had been raised about the policy. For example, place restrictions on the amount of reserves each amendments were approved to authorize intra- court could maintain or how they could be used. branch loans to trial courts from three judicial These reserves consist of funding designated by branch special funds—SCFCF, ICNA, and the the court as either restricted or unrestricted. Judicial Branch Workers’ Compensation Fund— Restricted reserves include (1) funds set aside totaling up to $150 million for cash management to fulfill contractual obligations or statutory purposes. The judicial branch is required to requirements and (2) funds usable only for specific report each year on the amount of such loans purposes. Examples of restricted reserves includes made and courts are required to repay each loan funds set aside to cover short-term facility lease within two years. Moreover, in order to increase costs, service contracts, license agreements, and the amount of reserves available for discretionary children’s waiting room costs. Unrestricted funds use, changes were also made to exempt reserves are generally used to avoid cash shortfalls caused that must be used for specific statutory purposes by normal revenue or expenditure fluctuations, (such as funds set aside to establish and maintain to make one-time investments in technology or a children’s waiting room) from the calculation of equipment, and to cover unanticipated costs. a trial court’s 1 percent limit—which totaled about New Reserves Policy Enacted in 2012-13. As $38 million at the end of 2012-13 and represented part of the 2012-13 budget package, the Legislature about 33 percent of restricted reserve funds. In approved legislation to change the above reserve addition to exempting any such reserves from policy that allows trial courts to retain unlimited the calculation of the 1 percent limit, the judicial reserves. Specifically, beginning in 2014-15, each branch estimates that trial courts will be able to trial court will only be allowed to retain reserves retain up to $24.1 million at the start of 2014-15. of up to 1 percent of its prior-year operating As shown in Figure 8, this is a substantial decrease budget. Additionally, legislation was approved to from the $324 million in reserves held at the end establish a statewide trial court reserve, managed of 2012-13. by the Judicial Council, beginning in 2012-13. This statewide reserve consists of a withholding of Governor’s Proposal 2 percent of the total funds appropriated for trial The Governor’s budget maintains the reserves court operations in a given year—approximately policy initially enacted as part of the 2012-13 $37.2 million in 2014-15. Trial courts can petition budget package and amended in 2013-14. The the Judicial Council for an allocation from administration states that the new reserves policy this statewide reserve to address unforeseen is more consistent with a state-funded judicial emergencies, unanticipated expenses for existing system as it enables the Judicial Council to set 16 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET statewide priorities for the use of such funds and courts could borrow from for cash-flow purposes. ensure that their use benefits the entire trial court For example, the Legislature could allow loans to system. be made from the IMF and the Court Facilities Trust Fund as well. Reserves Policy Continues to We note, however, that even with expanded Present Unintended Challenges authority to borrow from additional judicial Cash Flow Concerns Persist Despite Special branch special funds, it is likely that funds Fund Loans. Courts currently use their reserves will be unavailable for loans in the long run to avoid cash shortfalls when their monthly without delaying projects or reducing support operating expenses exceed their monthly for programs currently funded by these special allocation from the state. This ensures that courts funds. For example, both the SCFCF and ICNA pay all of their bills on time and that certain court are currently used to make debt-service payments programs can continue to operate even when there for completed courthouse construction projects. Graphic Sign Off are delays in federal or other reimbursements. Over time, more projects will be completed Secretary Accordingly, reducing the reserve courts are requiring greater expenditures from both of these Analyst allowed to retain can create cash flow difficulties funds, which would further reduce the availability MPA for courts. Moreover, the potential for cash of such funds for cash shortfall loans. Thus, if Deputy shortfalls is exacerbated by the requirement that priority was placed on ensuring $150 million in the judicial branch maintain a statewide reserve loans were available in these funds for cash-flow of 2 percent, as this means that each court’s total purposes, the judicial branch would potentially allocation is 2 percent smaller than it would need to delay certain projects. otherwise be. The recent amendments to the Figure 8 reserves policy to permit Total Trial Court Reserves Since 2000-01 temporary loans of up (In Millions) to $150 million from $700 the SCFCF, ICNA, and the Judicial Branch 600 Workers’ Compensation 500 Fund should address most of the cash-flow 400 issues in the short run. However, cash-flow 300 loans from these three 200 funds could force the judicial branch to delay 100 payments or planned projects. To prevent this, 00-01 01-0202-0303-0404-0505-06 06-0707-0808-0909-10 10-1111-1212-1313-14a the Legislature could (Estimated) a Does not include reserves that must be used for specific statutory purposes, which were exempted expand the number from the calculation of a trial court’s 1 percent limit by the Legislature in 2013-14. of special funds that www.lao.ca.gov Legislative Analyst’s Office 17 ARTWORK #140055 Template_LAOReport_mid.ait 2014-15 BUDGET Courts May Need to Suspend Some Existing This could potentially result in these courts Contracts. While the amended reserves policy requiring more loans to cover cash shortfalls, as exempts funds set aside for specific statutory well as the delayed implementation of additional purposes, it does not take into account reserve projects or elimination of programs or services funding that courts set aside to fulfill contractual that would otherwise be supported through obligations. This can create some challenges for the discretionary funds. courts. First, some courts have ongoing contractual Limits Ability for Courts to Plan for Future obligations. For example, some courts may utilize Projects. Historically, trial courts built up their a third-party vendor to process their employee reserves to fund projects or programs to help payroll, such as the county personnel agency or a them operate more efficiently, support additional private company. These third-party vendors often workload, or provide the public with greater access require the courts to maintain a certain amount to court services (such as document management, of funding in reserve prior to issuing payroll—an collections, electronic filing, and electronic access amount generally greater than the 1 percent cap technologies). To the extent that the funds currently that they are allowed to keep in reserve under supporting such projects or programs exceed the the new reserves policy. Without sufficient funds 1 percent reserves cap, they could be halted or in reserve to meet such obligations, courts may scaled back. Additionally, because the statewide have difficulty making employee payroll or may reserve can only be used to address unforeseen no longer be able to use their third-party vendor. emergencies, unanticipated expenses for existing Second, some courts have entered into one-time programs, or unavoidable funding shortfalls, or multiyear contracts or agreements to fund these funds are not available to support projects various projects, such as replacing aging case historically funded from reserves. Thus, the new management systems. In such circumstances, reserves policy limits the ability of courts to save courts often set aside the entire cost of the project and plan over time for such investments. but only make incremental payments once vendors Limits Incentive and Ability of Individual meet performance benchmarks. For example, one Trial Courts to Implement Efficiencies. Under trial court has entered into a $2.4 million contract the amended reserves policy, individual trial to replace its case management system with courts have less incentive to operate efficiently. The $1.1 million due in 2013-14 and $1.3 million due historical ability for courts to set aside unlimited in 2014-15. However, the court will only be able to funds encouraged them to operate more efficiently retain an estimated $305,000 in reserves to comply because any savings created could then be used by with the 1 percent cap—an amount significantly the court to fund future programs or projects that less than the $1.3 million due in 2014-15. benefited it directly. Under the new reserves policy, Since the above funds are not exempted however, reserve funds beyond the 1 percent cap from the calculation of the 1 percent limit, some created by efficiencies implemented by individual courts may be forced to break existing contracts, trial courts cannot be retained by the court. particularly if an alternative funding source is not Accordingly, trial courts have less incentive to identified by the judicial branch. To the extent implement such efficiencies as they will be unable that courts are able to fulfill these expenditures to benefit directly from the savings created. In within the 1 percent cap, they will likely have fewer addition, the reserves policy limits the ability of unrestricted funds available for other purposes. trial courts to create such efficiencies. 18 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET LAO Recommendation as required by some trial court payroll vendors and (2) held to fulfill existing While the Governor’s budget proposes no contracts. new changes to the reserves policy in 2014-15, we recommend the Legislature amend existing policy • Future Projects. In order to enable courts to address some or all of the unintended challenges to fund future projects and programs to related to cash flow, meeting existing contracts, improve court operations, the Legislature planning for future projects, and incentives for and judicial branch could establish new implementing operational efficiencies. We find that processes for prioritizing and funding there are different ways that the Legislature could those projects determined to be of address each of these challenges. greatest value to the state. For example, • Cash-Flow Concerns. In order to the Legislature could require the judicial address potential cash-flow concerns, branch to follow the same processes that the Legislature could make statutory currently exist for other state entities for changes to increase the availability of cash, the approval and funding of information such as by (1) expanding the number of technolody projects. judicial branch special funds eligible for Alternatively, the Legislature could decide making loans, (2) authorizing the State to increase the trial court reserves cap from the Controller’s Office to change the frequency current 1 percent limit. The new limit could vary of the distribution of funds to the judicial depending on the extent that the Legislature takes branch, and/or (3) permitting the state to other actions (such as those described above) to make loans from its borrowable funds to address the challenges currently resulting from the judicial branch. The Legislature could the 1 percent cap. For example, according to the also exclude funds needed for cash-flow judicial branch, trial courts would need to keep purposes from the calculation of the approximately 12 percent of their prior-year 1 percent reserve cap. operating budget in order to avoid cash-flow • Contract Concerns. In order to address issues, assuming no other changes are adopted to concerns regarding the ability of trial alleviate concerns regarding cash flow. We note courts to meet multiyear contracts, the that increasing the cap could also help provide an Legislature could also exempt funds from incentive and ability to invest in future projects the 1 percent cap that are (1) set aside that could create operational efficiencies. CALIFORNIA DEPARTMENT OF CORRECTIONS AND REHABILITATION Overview adult inmates in the state’s prison system. Most of these inmates are housed in the state’s 34 prisons The CDCR is responsible for the incarceration and 42 conservation camps. Approximately of adult felons, including the provision of 11,700 inmates are housed in either in-state or training, education, and health care services. As out-of-state contracted prisons. The department of January 15, 2014, CDCR housed about 134,000 www.lao.ca.gov Legislative Analyst’s Office 19 2014-15 BUDGET also supervises and treats about 47,000 adult Adult Prison Population parolees and is responsible for the apprehension Projected to Increase of those parolees who commit new offenses or and Parolee Population parole violations. In addition, about 700 juvenile Projected to Decline offenders are housed in facilities operated by CDCR’s Division of Juvenile Justice (DJJ), which Background includes three facilities and one conservation The average daily prison population is projected camp. to be about 138,000 inmates in 2014-15, an increase The Governor’s budget proposes total of roughly 2,800 inmates (2 percent) from the expenditures of $9.8 billion ($9.5 billion estimated current-year level. This increase is largely General Fund) for CDCR operations in 2014-15. due to an increase in admissions to state prison. Figure 9 shows the total operating expenditures In particular, the department reports an increase estimated in the Governor’s budget for the in the number of offenders convicted as “second current year and proposed for the budget year. strikers.” (Under the state’s Three Strikes law, an As the figure indicates, the proposed spending offender with one previous serious or violent felony level is an increase of $391 million, or about 4 conviction who is convicted for any new felony percent, from the 2013-14 spending level. The can be sentenced to twice the term otherwise department’s budget includes increased spending required under law for the new conviction and related to (1) a projected increase in the prison must serve the sentence in state prison. These population, (2) the expansion of the correctional particular offenders are commonly referred to as officer training academy, (3) increased workers’ second strikers.) In 2012-13, 5,500 second strikers compensation expenses, (4) the expansion of were admitted to state prison, which is an increase rehabilitation programs, and (5) increased use of of 33 percent from the prior year. The CDCR’s in-state contract beds for inmates. This additional projections also show that the prison population is spending is partially offset by a projected decrease expected to continue increasing over the next few in the adult parole population resulting from the years. By June 30, 2019, the department estimates 2011 realignment of adult offenders to counties. that the prison population will be 143,000. Figure 9 Total Expenditures for CDCR (Dollars in Millions) Change From 2013-14 2012-13 2013-14 2014-15 Actual Estimated Proposed Amount Percent Prisons $7,481 $8,214 $8,496 $282 3.3% Adult parole 621 569 566 -3 -0.6 Administration 409 430 546 116 21.3 Juvenile institutions 175 187 179 -8 -4.7 Board of Parole Hearings 57 41 46 5 10.1 Totals $8,742 $9,441 $9,833 $391 4.2% CDCR = California Department of Corrections and Rehabilitation. 20 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET The average daily parole population is projected from the higher-than-expected 2013-14 parole to be about 37,000 parolees in the budget year, population, as well as additional unanticipated a decline of about 9,000 parolees (20 percent) costs for the recently activated California Health from the estimated current-year level. This Care Facility (CHCF) in Stockton. These costs decline is largely a result of the 2011 realignment, are partially offset by savings related to in-state which shifted from the state to the counties the contract beds due to delays in moving inmates into responsibility for supervising certain offenders such beds, as well as reduced costs associated with following their release from prison. The CDCR’s the deactivation of temporary mental health crisis projections also show that the parole population beds at the California Men’s Colony in San Luis is expected to continue to decline—although Obispo. (The increased cost for the administration’s at a slower pace—over the next few years. By proposed expansion of in-state contracts in the June 30, 2019, the department estimates that the current year is accounted for elsewhere in the parole population will be 33,000. Governor’s budget for CDCR.) The budget-year net reduction in costs is Governor’s Proposal largely related to the lower-than-expected 2014-15 As part of the Governor’s January budget parole population and reduced costs associated proposal each year, the administration requests with deactivating temporary mental health crisis modifications to CDCR’s budget based on projected beds at the California Institution for Men in Chino changes in the prison and parole populations in and California State Prison, Sacramento. These the current and budget years. The administration reductions are partially offset by increased costs to then adjusts these requests each spring as part of reimburse counties for various services provided the May Revision based on updated projections to CDCR (such as housing CDCR inmates when of these populations. The adjustments are Figure 10 made both on the Governor’s Population-Related Proposals overall population of (Dollars in Millions) offenders and various 2013-14 2014-15 subpopulations (such Prison Population Assumptions as mentally ill inmates 2013-14 Budget Act 128,885 128,885 and sex offenders on Governor’s 2014-15 budget 135,006 137,788 parole). As can be Prison Population Adjustments 6,121 8,903 seen in Figure 10, the Parole Population Assumptions administration proposes 2013-14 Budget Act 42,498 42,498 Governor’s 2014-15 budget 45,944 36,660 a net increase of Parole Population Adjustments 3,446 -5,838 $2.9 million in the current Budget Adjustments year and a net reduction Inmate-related adjustments $5.0 $2.2 of $23.4 million in the Contract bed adjustments -7.7 — Jail contract reimbursements — 13.2 budget year. Health care facility activations -0.2 -4.9 The current-year Parolee-related adjustments 5.9 -28.7 net increase in costs is Other adjustments -0.1 -5.1 primarily due to costs Proposed Budget Adjustments $2.9 -$23.4 www.lao.ca.gov Legislative Analyst’s Office 21 2014-15 BUDGET they must appear in court), as well as costs from an (such as to medical appointments). However, the increase in certain populations of inmates needing administration’s request for additional resources mental health care. for the operation of CHCF does not reflect any savings to CDCR from such workload reductions. Adjustments Do Not Reflect CHCF Use of Registry for Mental Health Services. Delay and Rely Heavily on Registry Mental health staffing levels are determined using In general, the administration’s projections of a ratio staffing model, which is based on patient the prison and parole population are reasonable population, clinical staff recommendations, based on recent trends, and the associated budget direction from the Coleman court special adjustments are generally reasonable. We find, master, and other factors. Adjustments are made however, that potential savings could be realized twice annually based on changes in the patient by adjusting for the delayed activation of CHCF, population. We note, however, that mental as well as from reducing reliance on registry for health staff positions have consistently been very mental health position vacancies. difficult to fill. Currently, the department has a Delayed Activation of CHCF. The department vacancy rate of 23 percent, excluding registry, activated CHCF in July 2013 and began blanket, and long-term sick leave. According to transferring inmates to the prison in phases CDCR, none of the additional 75 mental health throughout the fall of 2013. The department’s positions authorized by the Legislature for original activation schedule called for CHCF to 2013-14 (including psychiatrists, psychologists, have all of its 1,722 beds filled by December 31, and administrative support staff) have been filled. 2013. However, the activation of certain housing In 2013-14, CDCR estimates that it will realize units were delayed. For example, CDCR delayed $36 million in salary savings from those vacancies the activation of seven 30-bed housing units for and is projected to spend $25 million on registry mentally ill inmates operated by the Department staff (temporary staff paid an hourly wage) to of State Hospitals (DSH). The CDCR activated two cover the vacant positions. of these units several months behind schedule, The CDCR utilizes registry staff because of and the other five units were inactive at the time the difficulties in filling mental health positions of this analysis. It is unclear when the units will and the need to maintain a certain basic level be activated. According to CDCR, the delays have of services. As such, some level of registry is resulted from DSH’s inability to hire sufficient expected and unavoidable. However, registry may mental health professionals to staff the housing be more expensive than hiring civil service staff. units. Moreover, we note that the state recently Highly trained classifications such as psychiatrists suspended the transfer of inmates to CHCF and psychologists are particularly more expensive due to activation problems (such as inadequate to hire as registry staff. medical supplies). The delayed activation of the One way to reduce the need to use expensive housing units should reduce workload for CDCR registry staff is to encourage individuals providing in 2013-14 and 2014-15. This is because the registry services to transition to civil service department does not need to allocate budgeted positions. However, there is little reason for correctional officer time to provide security registry employees to do so, because CDCR for empty housing units. In addition, there are currently has no cap on the number of hours a fewer inmates to escort throughout the prison mental health registry employee can work. As a 22 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET result, individuals can earn more as registry staff. Prison Staffing and Overtime We note that CDCR has put in place such caps on Each year the state spends billions of dollars registry nurses in medical classifications because annually both in base staffing costs and overtime of similar concerns about unnecessary costs. costs to ensure each of its prisons is adequately LAO Recommendations staffed and is able to handle its various workload demands. Below, we describe and identify We withhold recommendation on the inefficiencies with how CDCR currently addresses administration’s adult population funding these staffing needs. In addition, we review the request until the May Revision. We will continue Governor’s budget proposals related to CDCR’s to monitor CDCR’s populations, and make staffing and overtime and recommend steps the recommendations based on the administration’s department could take to address its correctional revised population projections and budget staffing needs in a more cost-effective manner. adjustments included in the May Revision. However, we recommend that the Legislature Background direct the department to make adjustments as part Staffing the 34 adult prisons operated by CDCR of the May Revision to reflect the savings from the represents a unique challenge. This is because many delayed activation of housing units at CHCF. duty assignments (referred to as “posts”) must We also recommend that the Legislature be filled 24 hours per day, 365 days per year. In direct the department to report during budget particular, many assignments filled by correctional subcommittee hearings this spring on (1) the officers, sergeants, and lieutenants are posted feasibility of instituting a cap for individual positions. If a staff member is unavailable to fill registry employees in cases where such employees a post, the prison generally cannot leave the post are more costly than civil servants and (2) what unfilled. Staff in these posts typically work one of would be an appropriate cap. The cap would need three eight hour shifts (referred to as “watches”) each to be low enough to provide an incentive for these day, five days per week and have two regular days employees to transition to civil service, but not too off (RDOs). Thus, a single post is typically filled by low that it inhibited the department’s ability to three different employees over the course of a day. provide mental health services. Such information Staff members assigned to the prison’s “watch office” would assist the Legislature in determining are employed to ensure that all the posts are filled whether and what type of cap should be adopted. and are responsible for finding an employee capable To the extent a cap encourages registry employees of filling posts that are left empty when another to transition to civil service, it could reduce the employee is unavailable. overall cost of mental health services in CDCR. Steps Taken to Fill Posts Left Empty When We further recommend the Legislature require Staff Are Unavailable. There are different reasons the department to report on how all of the savings why an employee is unavailable to fill an assigned realized from mental health staff vacancies post, with employee leave use being the most has been used by the department, in order to common. Each correctional employee used, determine whether the activities that were on average, 365 hours of leave in 2011-12. The funded are consistent with legislative priorities most common type of leave used by correctional and whether CDCR’s budget should be adjusted employees is sick leave. Other types of leave accordingly. www.lao.ca.gov Legislative Analyst’s Office 23 2014-15 BUDGET include vacation leave, annual leave (a type of leave to fill the empty posts. Like relief officers, employees may choose to earn in lieu of vacation PICOs generally are assigned to a specific and sick leave), and leave taken by staff to complete prison. However, unlike relief officers, professional training and development or to fulfill PICOs only work if they are called in by the military duty. In addition, posts can be empty if a watch office to fill an empty post—similar position is vacant, such as when CDCR fails to hire to how a substitute teacher fills in for a enough staff. When a post becomes empty due to sick school teacher. The pay and benefits vacancies or staff absences, the watch office at the of PICOs are contingent on the number of prison takes a series of sequential steps to identify hours they work. certain employees to fill the absent post as follows. Overtime. If the posts are still empty after the • Relief Officers. When posts become empty above steps are taken, a watch office will then offer because staff are unavailable, the watch correctional employees the opportunity to earn office attempts to first fill the empty posts overtime on a voluntary basis, with more senior with relief officers. Relief officers are officers being offered the opportunity first. If no full-time correctional employees who are employees volunteer to work overtime, a watch assigned to a specific prison. These officers office will then use involuntary overtime to fill arrive at the prison for a predetermined empty posts. Under these circumstances, overtime shift, but may not know which post they is assigned in reverse seniority order, with the most will be assigned to on a given day until they junior correctional employee on the previous watch arrive at the prison. If there are not enough being required to stay and fill the empty post on the empty posts on a given watch, relief officers next watch. can be assigned other duties, such as In addition to the need to fill posts, workload searching the prison for contraband. Relief that falls outside each watch can also drive the officers receive the same pay and benefits need for correctional employee staffing and as other correctional officers assigned to overtime. The most significant workload that regular posts. results in the need for staffing and overtime is the workload associated with medical guarding • Officers Redirected From Other Posts. If and transportation. Such workload occurs when relief officers are not available to fill empty inmates require certain types of medical care posts, the watch office may then determine that cannot be provided on-site and correctional whether any correctional employees can staff must transport them to their appointments be redirected from other posts that do not and guard them while they are there. This often need continual staffing during the watch results in overtime because the total time to in question. Examples of posts that do not transport and guard inmates can extend beyond require continual staffing include posts in the end of an officer’s shift. Other workload also prison investigation units. contributes to the need for correctional staffing and • PICOs. If the empty posts are correctional overtime. Examples include the need to conduct officer assignments (and not for investigations, transport inmates to and from their correctional sergeants or lieutenants), the court dates, and various emergencies such as prison watch office will then attempt to use PICOs riots. 24 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET CDCR Budget for Relief Officers and hires permanent full-time positions while it PICOs. In order to estimate the number of relief assesses whether its historical policy of assigning officers that should be budgeted for in a given 3.5 percent of its total correctional officers as year, CDCR has historically used a formula that PICOs should be permanently adjusted. The incorporates both the amount of leave time (such CDCR does not have a budget specifically for as vacation, sick leave, and training days) accrued PICOs. Instead, resources for these positions are by correctional officers as well as how much derived from funding budgeted for overtime and of that leave time they use. Currently, CDCR positions that are vacant, as the use of PICOs estimates that for every ten correctional officer reduces the need for these funds. positions, three relief officers must be budgeted CDCR Spending on Overtime. In 2012-13, for to account for the leave time that will likely CDCR spent $279 million on correctional officer, be used by regular correctional officers. This ratio sergeant, and lieutenant overtime costs. As shown of relief officers to correctional officers is known in Figure 11, most of this spending is related to Graphic Sign Off as the “relief factor.” The department also uses overtime to fill posts left empty due to staff being Secretary a similar process for budgeting relief officers to unavailable. Specifically, almost two-thirds of fill posts left empty by correctional sergeants and CDCR’s expenditures on overtime in 2012-13 Analyst lieutenants. The CDCR is budgeted in the current were related to sick leave, vacant positions, or MPA year for a total of about 4,500 correctional relief other staff absences. The remainder was spent onD eputy positions, which consists of 3,800 correctional other workload-related overtime (such as medical officers, 530 correctional sergeants, and about guarding and transportation). 190 correctional lieutenants. In total, this represents about $500 million in costs. Figure 11 In addition, CDCR CDCR Spending on Overtime has recently employed 2012-13 several hundred PICOs, accounting Other Workload for 3.5 percent of the Sick Leave department’s total number of correctional officers. Because the department is currently facing high correctional Medical Guarding and Transportation officer vacancy rates, it plans to suspend placing newly hired correctional officers into Total: $279 Million the PICO program for Other Staff Vacancies two years. During this Absences time the department plans to only offer new ARTWORK #140055 www.lao.ca.gov Legislative Analyst’s Office 25 Template_LAOReport_mid.ait 2014-15 BUDGET Governor’s Proposals posts being empty. This is because funding for these types of overtime can be redirected from savings The Governor’s 2014-15 budget proposes resulting from vacant positions. For example, when $207.2 million in General Fund support for overtime is needed to fill a post that is empty due overtime costs. This represents a slight increase to a vacancy, the department can redirect funding from the $201.3 million included in the 2013-14 tied to the vacant position to pay for the overtime, budget for overtime costs. In addition, the budget as that funding is not being used to pay correctional proposes to change the methodology CDCR uses employees. Similarly, because the department to calculate the relief factor. Under the proposal, budgets for enough relief officers to cover nearly the relief factor would be calculated based solely all of the leave taken by correctional employees, on statewide actual leave usage rather than a overtime is only necessary to cover for such leave if combination of actual leave usage and accrual there are vacant relief officer positions. rates. In addition, the proposed methodology We also note that the amount of funding would incorporate types of leave (such as furlough derived from vacant positions is sufficient to fully days) that are not accounted for in the current cover overtime costs. This is because the amount relief factor. These changes result in the need for budgeted for each correctional position on a per an additional $9 million in General Fund support hour basis, including benefits and other non-salary and 84 positions in 2014-15. Under the Governor’s costs, exceeds the cost of the overtime necessary proposal, the relief factor would be adjusted to cover the number of hours typically worked by annually based on updated data on actual usage of correctional employees, as is illustrated in Figure 12. staff leave in the prior year. In addition, we note that While staff are generally paid one and a half times CDCR indicates that while the proposed relief factor their usual pay for overtime hours, the increased change is based on statewide data, it is currently costs for the higher hourly wage is more than offset in the process of calculating specific relief factors by other factors. For example, when the state hires for individual prisons that could be used to make additional correctional staff it must pay for their annual adjustments at each prison in the future. retirement and benefits whereas there are no such CDCR Budgeted for More costs incurred for each additional hour of overtime Overtime Than Necessary worked. However, when CDCR incurs costs for Our analysis of the way CDCR staffs its prisons overtime related to workload (such as medical and manages overtime indicates that CDCR’s overtime budget is unnecessarily large. While Figure 12 budgeting for overtime Amount Budgeted Per Vacant Position Exceeds Average Cost of Overtime related to workload and some absences is Officer Sergeant Lieutenant necessary, the department Salary $70,128 $85,429 $96,108 does not need to set aside Benefits and other costs 41,691 48,902 52,900 Total Amount Budgeted Per Position $111,819 $134,331 $149,008 funding specifically for Average number of hours worked 1,712 1,688 1,728 overtime required to cover Hourly Amount Budgeted Per Vacancy $65.31 $79.58 $86.23 vacancies and most of the Average Overtime Hourly Cost $47.92 $59.18 $68.61 types of leave that result in 26 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET guarding and transportation) and leave not reduced the inmate population and the number of covered by relief officers (such as leave earned when correctional employees, which in turn significantly correctional employees work through furlough reduced the department’s need for overtime days), there is no source of funding available to be funding. Although CDCR’s overtime budget was redirected to cover such costs. Thus, CDCR only reduced slightly in 2012-13, the budget was still needs to set aside overtime funds in its budget more than $100 million beyond its actual need. exclusively for these purposes. Similarly, we estimate that the administration’s However, as shown in Figure 13, CDCR’s proposed overtime budget for 2014-15 is over overtime budget in recent years is far larger than budgeted by more than $100 million. what has been required to fund overtime related In view of the above, it appears that the funding to workload and absences not covered by relief tied to vacant positions has been used by CDCR for officers. We note that Figure 13 does not depict other purposes rather than to support the costs of CDCR’s actual spending on overtime, but rather overtime resulting from the vacancies. Our analysis compares the amount budgeted for overtime to finds that such funding has typically been used Graphic Sign Off our estimate of the department’s actual need for to address unfunded costs that the department Secretary overtime funding. While CDCR’s actual spending has experienced in recent years. For example, in Analyst on overtime has exceeded its budget in recent years, 2012-13, the department incurred $290 million in MPA as we explain above, savings from vacancies is workers’ compensation costs, despite having only Deputy available to cover most of these costs. As such, the $210 million in its budget for such costs. In order to department’s actual spending on overtime does not cover the $80 million shortfall, CDCR redirected reflect its need for overtime funding. unused funds from various places within its budget In 2011-12 and 2012-13, CDCR’s overtime including funds tied to vacant positions. budget was more than $100 million above, or about Figure 13 double, the amount required CDCR's Overtime Budget Far Larger Than Needed to fund overtime related to (In Millions) workload and absences not $300 Overtime Costs Not Covered by Vacancy Savings covered by relief officers. Overtime Budget The discrepancy between 250 CDCR’s overtime budget and its actual need for 200 overtime funding increased significantly in 2011-12, 150 when the department received additional funding 100 because it had typically spent more on overtime 50 than it had previously been budgeted for. At the same time, the implementation 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 of the 2011 realignment www.AlaoR.TcaW.gOovR K L e#g1is4la0t0iv5e5 Analyst’s Office 27 Template_LAOReport_mid.ait 2014-15 BUDGET CDCR Does Not Optimize Use of CDCR’s budget includes more funding for relief Relief Officers and PICOs officers than necessary in most months of the year. This mismatch is illustrated in Figure 14, which As described above, CDCR establishes the relief compares the number of hours of leave correctional factor by taking into account the amount of leave employees are currently likely to use in each time accrued and used by correctional employees month with the number of hours of staffing that in prior years, which is then used to estimate the relief officers are likely to provide under CDCR’s number of relief officer positions to budget for. current approach to staffing, assuming there are no Currently, this amounts to three relief officer vacancies in relief officer positions. positions for every ten correctional officer positions CDCR Does Not Allocate Relief Officers and slightly more for correctional sergeants and Based on Needs of Specific Institutions. The lieutenants. (The administration’s proposed changes mismatch between an institution’s need for to the relief factor would marginally increase these coverage and the number of relief positions it is ratios for correctional officers, and slightly reduce Graphic Sign Off budgeted for is further compounded by a flaw in them for sergeants and lieutenants.) However, CDCR’s method for allocating relief officers amongS ecretary this represents the amount of relief officers CDCR prisons. Currently, CDCR allocates relief positions Analyst needs on average over the course of a year. While, among institutions based solely on the number of MPA in actuality, the amount of leave taken—and by non-relief positions it has despite the fact that staff Deputy extension the number of relief officers needed—is leave usage—and thus the need for relief officers— subject to seasonal variation. For example, officers varies significantly among institutions. Such tend to take more leave in the summer months and variation in leave usage occurs primarily because during December, with less leave in the remaining months. By basing the number of relief officers Figure 14 needed on an annual Current Coverage Strategy Likely to average, CDCR ends Result in Mismatch Between Staffing and Needsa up budgeting for too many relief officers in Hours of Leave Needing Coverage 800,000 most months of the year, Hours of Coverage Provided and not enough in the 700,000 summer and December. 600,000 This means that, if there 500,000 were no vacancies in relief officer positions, 400,000 more correctional 300,000 employees would likely 200,000 report to work than necessary eight months 100,000 of the year. Although Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec vacancies can prevent a Estimate based on 2013-14 staffing patterns and 2011-12 leave usage. this from occurring, it still demonstrates that 28 Legislative Analyst’s Office www.lao.ca.gov ARTWORK #140055 Template_LAOReport_mid.ait 2014-15 BUDGET each institution has a different mix of more and officers, who are scheduled for work irrespective of less senior officers and more senior officers tend to the amount of need on the day they are scheduled, accrue and use leave at higher rates. For example, institutions can use PICOs only when needed. This as shown in Figure 15, staff at Pelican Bay State flexibility makes PICOs uniquely suited to address Prison in Crescent City, which has relatively fewer the seasonal and institutional variabilGityr ianp thhei c Sign Off senior officers, used about 29 percent less leave need to cover for officers using leave. In addition, Secretary per employee than those at Valley State Prison for PICOs generally cost less on an hourly basis—after Analyst Women in Chowchilla in 2011-12. However, under adjusting for the number of hours a relief officer MPA the current allocation procedure, each of these is likely to work—than relief officers. Moreover, Deputy institutions would be allocated relief positions at PICOs earn their benefits based on the number the same rate. of hours they work, in contrast to relief officers CDCR Does Not Take Full Advantage of the whose benefits are generally independent of the Benefits of Utilizing PICOs. In contrast to relief amount of time they work. Figure 16 (see next page) Figure 15 Amount of Leave Used by Correctional Staff Varies by Institution Leave Hours Used Per Correctional Employee, 2011-12 Valley State Lancaster Kern Valley Institution for Women Women's Facility Corcoran Ironwood Deuel San Quentin Salinas Valley Avenal Chuckawalla Valley Solano Wasco Centinella Substance Abuse Facility Calipatria Pleasant Valley Folsom Correctional Institution North Kern Mule Creek Sacramento Sierra Institution for Men High Desert Training Facility Men's Colony Correctional Center Medical Facility RJ Donovan Rehabilitation Center Pelican Bay 50 100 150 200 250 300 350 400 450 500 www.lao.ca.gov Legislative Analyst’s Office 29 ARTWORK #140055 Template_LAOReport_large.ait 2014-15 BUDGET compares the hourly cost of a budgeted relief officer CDCR attempts to budget enough relief positions who works 1,712 hours (about the average amount to, on average, cover all the leave taken in a given worked by correctional officers in 2011-12) with the year, even though PICO officers are more flexible hourly cost of a PICO that is in a similar pay range. and less costly. Although the Governor’s proposal to update the relief factor annually based on LAO Recommendations actual leave usage in the prior year and to adopt In order to address the issues we identified institution specific relief factors is a step in the right above, we recommend that the Legislature direction, it does not go far enough in addressing (1) require CDCR to revise its budgeting the concerns discussed above. Specifically, the methodology for relief officers and PICOs and proposal does not address variance in the need for (2) adjust CDCR’s overtime budget to more closely relief officers throughout the year and does not take reflect its need for overtime spending. As we full advantage of the benefits offered by utilizing describe in more detail below, we estimate these more PICOs. changes would free up a total of $129 million In order to address these concerns, we relative to the Governor’s proposed budget for recommend that the Legislature direct CDCR 2014-15. to revise its relief officer and PICO budgeting Revise Budgeting Methodology for Relief methodology. Specifically, we recommend that Positions and PICOs. As discussed above, CDCR CDCR budget only enough relief officers to each currently budgets relief positions based on average institution to cover the minimum amount of leave annual data, which results in too many relief taken at each institution in a given year, and use officers being budgeted in many months in which PICO officers to cover any leave taken above that a less than average amount of leave is being used. amount. For example, under this approach, each In addition, CDCR allocates relief positions to institution’s allocation of relief officers that cover institutions uniformly, despite variance in the for correctional officers could be tied to the amount amount of leave taken at each institution. Finally, of leave taken during the week or month in the prior year during which Figure 16 the least amount of leave PICOs Less Costly Per Hour Than Relief Officers was used by correctional officers. To cover leave Cost of a Relief Officer Position Cost of a PICO taken above that amount, Salary $70,128 $58,206 each institution would Retirement 21,964 18,160 Health, vision, dentala 12,600 12,600 receive a specific budget Worker’s compensation 3,147 3,147 to employ PICOs. This Medicare 1,017 844 Cost of leaveb — 6,460 would ensure that Equipment and other costs 2,963 2,963 each institution has Totals $111,819 $102,381 an allocation of relief Hours workedc 1,712 1,712 officers and PICOs that Cost Per Hour $65.31 $59.80 can flexibly respond to a Permanent Intermittent Correctional Officers (PICOs) that work 960 hours in one year earn full health benefits. b Assumes PICO is at fourth step of K range salary scale, is scheduled regularly, and is compensated for all accrued sick and seasonal variation in vacation leave. c the need for coverage, is Assumes PICO works the same amount of hours as relief officers to allow for comparison. The actual average hours worked by PICOs is likely less than 1,712. tailored to the institution’s 30 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET unique need for coverage, and maximizes the recent increase in its vacancy rate is due to several use of less costly PICOs to provide that coverage. factors, including (1) the suspension of recruiting Similarly, we recommend that CDCR revise the correctional officers from March 2011 through way it allocates relief positions that cover for March 2013, (2) the activation of new prisons in correctional sergeant and lieutenant positions. We Stockton and California City, and (3) an increased recommend that these relief officers be allocated correctional officer attrition rate. As discussed to each institution based on data on leave taken earlier in this report, vacancies drive the need to at the institution in the prior year, rather than on cover posts through the use of overtime. According historical statewide averages. This would ensure to the department, the high vacancy rate and the that each institution’s allocation of relief sergeants resulting overtime utilization is contributing to and lieutenants is tailored to its specific needs. We increased sick leave and workers’ compensation estimate that the above changes could result in the claims due to fatigue and stress. elimination of around 700 relief officer positions In order to permanently address vacancies, and the need for around 600 PICO positions CDCR must hire new officers. However, the process resulting in net savings of about $25 million to recruit, qualify, train, and place individuals annually. We note that this adjustment could into correctional officer positions is extensive. For be revised at the May Revision based on more example, applicants must pass numerous written, up-to-date data. physical, and psychological examinations and Adjust CDCR’s Overtime Budget. Our undergo a background check. After this process, best estimate is that the department only needs cadets are trained for 16 weeks at the academy $103.2 million to cover its workload-related at the Richard A. McGee Correctional Training overtime costs in 2014-15. As discussed above, Center in Galt. As of April 2014, however, the CDCR’s remaining overtime costs can be covered department plans to shorten the duration of the with savings from vacant positions. Accordingly, academy to 12 weeks. After completing the 12-week we recommend that the Legislature reduce the training, new correctional officers will receive $207.2 million proposed by the administration for one week of orientation and three weeks of field overtime expenditures by $104 million. We note training at correctional facilities. that this adjustment could be revised at the May According to CDCR, once an institution Revision based on more up-to-date data. identifies a need for correctional officers, it can take 12 to 18 months before individuals are placed into Academy Augmentation the institution. The shortened academy may slightly reduce the amount of time necessary. While most Background academy graduates are assigned to permanent Vacancies occur when CDCR does not have full-time duty, historically the department has enough employees to fill all of the positions assigned some graduates to become PICOs in that it is funded for in the annual state budget. order to achieve its target of having 3.5 percent Historically, the department has had a vacancy of total authorized correctional officers assigned rate of about 5 percent. However, as of December as such. However, as we discussed earlier in this 2013, CDCR had about 2,200 vacancies in its report, CDCR plans to suspend assigning academy correctional officer positions—a vacancy rate of graduates to PICO positions for two years while it about 10 percent. According to the department, the considers whether to adjust its 3.5 percent target. www.lao.ca.gov Legislative Analyst’s Office 31 2014-15 BUDGET Governor’s Proposal May—to incorporate forecasts of key workload drivers (such as the total inmate population). Even The Governor’s 2014-15 budget proposes a though the department currently tracks data (such $61.7 million General Fund augmentation and 147 as correctional officer vacancies and attrition rate) new positions to expand CDCR’s recruitment and that could be used to project the need for future training of correctional officer candidates. This academy graduates, this data and adjustments to its would more than double the department’s budget of recruitment and training capacity are not part of $49.1 million for such purposes in the current-year. the department’s biannual budget adjustments or According to the administration, these resources are any other regularly scheduled budget process. needed to increase hiring to fill correctional officer This lack of planning can result in the positions that are currently or expected to be vacant. department not recruiting and training the The proposal includes increased staff to recruit appropriate number of cadets to meet its needs. For and evaluate correctional officer applicants and example, during the personnel reductions related additional resources for the academy to train cadets. to the 2011 realignment, the department assumed Together with the recent reduction to the length of that it would be eliminating more positions the academy training period, these changes would than it would be required to fill. Accordingly, allow CDCR to increase the number of academy the department did not run a basic academy graduates from 720 in 2013-14 to 3,400 in 2014-15. between March 2011 and May 2013. (We note the CDCR Lacks Annual Process for Adjusting department did operate transitional academies Recruitment and Training Capacity which allowed employees in one classification—like parole agents—to transfer into new classifications— The growing number of correctional officer like correctional officers.) However, correctional vacancies presents significant operational challenges staff left the department at higher rates than for the department. While the Governor’s proposal expected. As a result, CDCR will likely be facing is a reasonable approach to addressing the problem, a staffing shortfall for the next couple of years as we are concerned that the problem could have it tries to recruit and train enough officers to fill been mitigated—or even avoided altogether—if these vacancies. If the administration had routinely CDCR had been conducting regular forecasts of took into account CDCR’s training and recruiting its correctional officer need as part of the annual needs as part of the biannual budget process, the budget process. department would have likely recruited and trained As discussed above, the process to recruit, enough officers to prevent the significant shortfall it qualify, train, and place individuals into currently faces. correctional officer positions is extensive. As such, CDCR must forecast its need for new correctional LAO Recommendations officers 12 to 18 months in advance in order to Direct CDCR to Regularly Adjust Recruitment ensure that the amount of resources it has devoted and Training Capacity. We recommend that the to recruiting and training officers at any point in Legislature direct the department to incorporate time is sufficient to produce the number of new adjustments to its correctional officer recruitment officers it will need in the future. Currently, the and training capacity into its biannual budget administration adjusts its proposed funding levels adjustment process. Such adjustments should be for CDCR for both the current and budget years based on projections of its need for additional biannually—first in January and then again in 32 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET correctional officers at least 18 months into the to programming. In addition, the presence of future to account for the time required to recruit drugs in prison allows inmates to continue using and train new officers. This would allow the them, thereby reducing the effectiveness of drug department to better prepare for its future need treatment programs. for correctional officers and to avoid mismatches Governor’s Proposal between the number of vacancies and the number of new academy graduates. The Governor’s budget for 2014-15 proposes Direct CDCR to Continue to Fill PICO to expand existing efforts related to drug and Positions. As discussed above, CDCR intends to contraband interdiction. In recent years, the temporarily suspend assigning new correctional department has supplemented its base funding of officers to PICO positions in order to prioritize $3 million for drug and contraband (such as cell filling permanent full-time and relief officer phones) interdiction with one-time funds from positions. It is understandable that hiring PICOs asset forfeitures. According to CDCR, its current may not be the highest priority, particularly for interdiction efforts have been hampered by a lack prisons with high vacancy rates for permanent of sufficient permanent funding. In recognition of correctional officer positions. However, as we this, the Governor’s budget for 2014-15 proposes discussed in an earlier section regarding prison an augmentation of $14 million in General Fund staffing and overtime, there are benefits to using support and 81 positions to expand CDCR’s PICOs that the department is not currently taking interdiction program. Under the proposal, full advantage of. Accordingly, we recommend that these levels would increase to $18.5 million and the Legislature direct the department to continue 148 positions in 2015-16. The proposal consists offering newly trained correctional officers the of four separate initiatives aimed at deterring the option of accepting PICO positions. smuggling of drugs and contraband into prison and deterring inmates from using drugs. These Drug Interdiction Proposal initiatives involve: (1) increasing from 29 to 100 the number of trained canines to detect contraband Background possessed by inmates; (2) increasing from 7 to 35 Data provided by CDCR indicate that drug the number of ion scanners available to detect use is prevalent in prison. For example, in June drugs possessed by inmates, visitors, or staff; 2013, 23 percent of randomly selected inmates (3) purchasing an additional 240,000 urinalysis kits tested positive for drug use. In addition, another to randomly drug test inmates; and (4) equipping 30 percent refused to submit to testing, which inmate visiting rooms with video surveillance suggests that the actual percentage of inmates technology and requiring inmates in visiting rooms using drugs is likely considerable. to wear special clothing intended to prevent the Drug use in prison is problematic for smuggling of drugs and other contraband. several reasons. For example, according to the Interdiction Proposal Has Merit, department, the prison drug trade strengthens But Cost-Effectiveness of Specific prison gangs and leads to disputes among inmates Initiatives Uncertain that can escalate into violence. Such violence often leads to security lock-downs which interfere Studies of the implementation of interdiction with rehabilitation by restricting inmate access initiatives in California and in other states suggest www.lao.ca.gov Legislative Analyst’s Office 33 2014-15 BUDGET that strategies similar to those being proposed by above pilot study was unable to determine the the administration can be effective at reducing effectiveness of visiting room video surveillance contraband and drug use in prison. This, together equipment. with the ongoing challenge posed by in-prison drug LAO Recommendation use, lead us to conclude that the administration’s goal of reducing contraband and drug use in While the Governor’s proposal to expand prisons is both worthwhile and achievable. CDCR’s drug and contraband interdiction efforts However, as we discuss below, it is unclear based has merit, it is unclear what the most cost-effective on our review of the research in this area which combination of interdiction initiatives is. Thus, initiatives, or combination of initiatives, proposed we recommend that the Legislature modify the by the administration are most cost-effective at proposal to conduct a pilot of the various initiatives reducing contraband and drug use in prison. proposed by the Governor. Specifically, we In 1999, CDCR initiated a two-year interdiction recommend the Legislature reduce the request from pilot program that included all four of the $14 million in General Fund support in 2014-15 initiatives identified in the administration’s current ($18.5 million in 2015-16) to $3 million annually proposal. A study of this pilot program by the on a three-year limited-term basis. The reduced University of California, Los Angeles, found that funding amount would allow the department while drug use declined over the course of the pilot to pilot test the four proposed interdiction program, most of the decline could be attributed initiatives—urinalysis testing, canine units, ion to random urinalysis testing—the least costly of scanners, and visiting room surveillance—in the initiatives proposed by the Governor. The study different combinations in order to assess the found that the other interdiction strategies (such relative effectiveness of the initiatives. The as canine units and ion scanners) did not appear to Legislature could use the outcomes of the pilot to contribute to declines in drug use. In addition, data determine which, if any, of the various initiatives suggest that the other interdiction initiatives may should be expanded to all of the state’s prisons. not be effective at detecting drugs. For example, The actual cost of the pilot program could vary over the course of the study period, the canine depending on how it is designed. Accordingly, units were involved in almost 9,000 searches that we recommend that the Legislature adopt budget resulted in only ten drug finds, and the use of bill language requiring that the department ion scanners—one of the most costly initiatives (1) contract with independent researcher experts proposed by the Governor—resulted in only a (such as a university) to design and evaluate single drug find. the pilot program, (2) not expend any funds We note, however, that certain aspects for the expanded interdiction initiatives until regarding the implementation of the 1999 pilot it has notified the Legislature of the design and program suggest that the above results are not cost of the pilot program, (3) revert any unspent necessarily conclusive. For example, the ion funds to the General Fund, and (4) report to the scanners identified above were not used to scan Legislature on the outcomes (including the relative visitors or staff, which CDCR intends to do under cost-effectiveness of each initiative) of the pilot the Governor’s proposal. We also note that there program by April 1, 2017. This would allow the may have been improvements in the technology evaluation to incorporate two full years of data and of available scanners since 1999. In addition, the for the results to inform the 2017-18 budget process. 34 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET Federal Receiver for for which there are no generic prescription Inmate Medical Services therapies available. For example, about 26 percent of the inmate patient population has a serious Augmentation for Inmate Pharmaceuticals mental health diagnosis and many mental health medications are patent-protected, which results in Background. In 2006, after finding the state high mental health pharmaceutical costs. failed to provide adequate medical care to prison Recognizing the uncertainty associated with inmates, the federal court in the Plata v. Brown pharmaceutical cost growth, the size and acuity case appointed a Receiver to take control over the of the patient population, and the potential cost direct management of the state’s prison medical savings of various programmatic changes initiated care delivery system from CDCR. The Receiver’s by the Receiver, the Legislature increased the office is currently responsible for providing inmate pharmaceutical budget on a limited (rather medical pharmaceuticals prescribed by physicians than permanent) basis in recent years. Specifically, under his management, as well as psychiatric and since 2007-08, the Legislature has provided only dental medications prescribed by psychiatrists limited-term augmentations (typically for one to and dentists managed by CDCR. From 2004-05 three years) to support inmate pharmaceutical through 2010-11, the inmate pharmaceutical budget costs. As we discuss below, spending on such increased from $136 million to $216 million. (The costs has declined in the past couple of years pharmaceutical budget reflects only the cost of compared to previous highs. The enacted 2013-14 pharmaceuticals and not the cost of medication budget includes a total of $178 million for inmate distribution or management.) pharmaceuticals. Of this amount, $51 million Increases in the inmate pharmaceutical was provided on a limited-term basis. Figure 17 budget can occur for several reasons, such as (see next page) shows the amount spent on additional inmates needing prescription drugs pharmaceuticals per inmate from 2004-05 through and increases in the rate at which inmates 2012-13, and as revised and proposed by the are prescribed drugs. Moreover, we note that Governor for 2013-14 and 2014-15. pharmaceutical costs generally rise at a faster pace In recent years, the Receiver has taken than inflation. For example, in 2012, average drug some steps to reduce pharmaceutical costs. costs increased approximately 3.8 percent and As shown in Figure 17, costs per patient have average prices for brand name drugs increased declined slightly in recent years. In addition, the 25.4 percent, compared to an overall 1.7 percent department is working to reduce non-formulary increase in consumer prices. Brand name drugs prescribing and pharmaceutical waste, developing are often prescribed when generic alternatives are a centralized procurement process, and is using unavailable due to patent protections. In addition, the implementation of electronic health records as while cost savings can be achieved by using a an opportunity to standardize ordering, refilling, formulary (a list of preferred medicines that cost and discontinuing medications. However, as we less), drugs that have few alternatives are less discuss below, some of these improvements have likely to have formulary options, which can also not yielded their full benefit and there are still contribute to cost growth. This is particularly an significant improvements that the Receiver has yet issue for CDCR because the inmate population to make. is disproportionately likely to have health issues www.lao.ca.gov Legislative Analyst’s Office 35 2014-15 BUDGET Governor’s Proposal. The Governor’s are spending approximately $820 per inmate budget proposes adjustments to the inmate on all pharmaceuticals and $571 per inmate on pharmaceutical budget for both the current and psychiatric medications. California’s spending on budget years. For 2013-14, the budget proposes to pharmaceuticals exceeds the average of these other reduce the current-year pharmaceutical budget to states by more than 80 percent while its spending $168 million. For 2014-15 and ongoing, the budget on psychiatric medication is approximately proposes $161 million for inmate pharmaceuticals. 17 percent greater than the average of these other This $161 million budget would become the states. new baseline for the Receiver’s pharmaceutical Non-Formulary Prescribing Remains High. spending, establishing an ongoing budget based on The Receiver’s office maintains a list of medicines current purchasing and prescribing practices. it prefers that health care providers prescribe to Pharmaceutical Spending Higher Than Other inmates, which is also referred to as a formulary. States. Although the amount that the state spends Non-formulary prescriptions are typically two per inmate on pharmaceutical drugs has declined to three times more expensive than those on the in recent years, it still remains higher than other formulary. According to the Receiver’s Turnaround Graphic Sign Off large states for which we were able to obtain data, as Plan of Action (the Receiver’s detailed proposal shown in Figure 18. Under the Governor’s budget, for how to achieve a cSoensctriteuttaiorynal level of care), the state would spend about $1,350 per inmate on one of the keys to maAnangainlygs ptharmaceutical costs all pharmaceutical drugs in 2014-15, compared to is utilization of a druMg fPoArmulary. Accordingly, $1,514 in 2012-13. The state spent approximately the Receiver has a goaDl eopf huatvying the rate of $659 on psychiatric drugs per mental health non-formulary prescriptions by medical providers patient in 2012-13, the most recent year for which be 3 percent. As can be seen in Figure 19 (see data was available. By contrast, other large states page 38), however, most CDCR prisons exceed this 3 percent goal. The process for approving Figure 17 non-formulary Pharmaceutical Expenditures Per Inmate prescriptions is not centrally controlled by $1,800 the Receiver’s office, but 1,600 rather by staff at each 1,400 of the 34 prisons. This 1,200 likely contributes to the 1,000 significant variation in 800 non-formulary usage among prisons. 600 Receiver’s Office 400 Has Not Adopted 200 Some Expert Recommendations. In 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Revised Proposed addition to the issues described above, several 36 Legislative Analyst’s Office www.lao.ca.gov ARTWORK #140055 Template_LAOReport_mid.ait 2014-15 BUDGET other areas of concern related to pharmaceutical We also note that the Receiver recently practices in prisons continue to be expressed by the established a central fill pharmacy to provide Office of the Inspector General (OIG) and Health prescriptions to all institutions as a way to create Management Associates (HMA), a consulting firm efficiencies. For example, having such a pharmacy that performed an organizational assessment of could reduce the volume of prescriptions processed the Receiver’s office in 2013. While the Receiver’s and filled at the institutions, as well as reduce the office is in the process of acting on some of these need for each institution to continue operating recommendations, we believe the opportunity its own pharmacy. We note, however, currently for further efficiency increases exists. For only an average of 65 percent of keep-on-person example, the Receiver is currently in the process medications are filled through the central fill of developing a centralized procurement process pharmacy, and each institution continues to and conducting a recovery audit of vendor pricing operate its own pharmacy. Underutilization of Graphic Sign Off and rebates. Both of these steps could result in the central fill pharmacy can create unnecessary reduced pharmaceutical costs. In addition, prison costs because of increased workload a S n e d cretary medical programs continue to have large volumes processing at the institutions. Finally,A thnea lyst of pharmaceutical waste (meaning pharmaceuticals Receiver’s office also has deficiencies iMn PinAventory that go unused). Such waste could be prevented management, such as the discrepancieDse bpetuwtyeen through improvements in policies related to the computerized inventory stock and the actual pharmaceutical prescribing and restocking and stock on shelves. All of the issues identified above inmate transfers (meaning when an inmate moves suggest that the Receiver’s current pharmaceutical from one institution to another). expenditures continue to be larger than necessary. Figure 18 Pharmaceutical Expenditures Per Inmate Higher Than Other States California New York New Jersey Pennsylvania Florida Michigan Ohio Pharmaceutical Costs Per Inmate Psychiatric Drug Costs Per Mental Health Patient Georgia $200 400 600 800 1,000 1,200 1,400 1,600 Note: Data reflect costs in most recent fiscal year or period for which data was available. www.lao.ca.gov Legislative Analyst’s Office 37 ARTWORK #140055 Template_LAOReport_large.ait Graphic Sign Off Secretary Analyst MPA Deputy 2014-15 BUDGET Figure 19 Medical Non-Formulary Prescriptions August 2013 Chuckawalla Valley Ironwood Correctional Training Facility Kern Valley Salinas Valley Rehabilitation Center Correctional Institution Calipatria Sierra Basic Correctional Center High Desert Pelican Bay Pleasant Valley Centinella Valley State Avenal Substance Abuse Corcoran North Kern Deuel Reception Center Wasco Central Women’s Facility Lancaster Folsom Institution for Women RJ Donovan Men’s Colony Sacramento Intermediate Mule Creek Institution for Men Solano San Quentin Medical Facility 3% 6 9 12 15 Note: Intermediate institutions house inmates with high medical needs, basic institutions house inmates with less serious medical needs, and reception centers house inmates with all levels of medical needs. LAO Recommendation. The Governor’s budget Legislature approve the administration’s proposed proposes to increase the base budget for inmate pharmaceutical budget, we recommend that it be ARTWORK #140055 pharmaceuticals. However, we are concerned that for only two years (2014-15 and 2015-16), so that Template_LAOReport_mid.ait increasing the ongoing base budget for a system it can reevaluate the need for ongoing funding in that has not yet fully realized recommended two years. In addition, we recommend that the efficiency improvements could remove any Legislature require the Receiver’s office to perform incentive for further improvement and result in an analysis of the potential savings that could be excess cost. Thus, while we recommend that the achieved by addressing the issues identified by 38 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET the OIG and HMA and report to the Legislature been challenges in carrying out the above activities by January 2016. This information will allow the with existing staff. As a result, some institutions Legislature to better assess what the ongoing size have experienced delays in submitting the required of the Receiver’s pharmaceutical budget should be documents or, in some cases, have submitted when the limited-term funding expires. incomplete documents. In addition, there have also been delays in the reviews conducted by staff at Armstrong Compliance Funding CDCR headquarters. Background. The federal Americans with Governor’s Proposal. The Governor’s budget Disabilities Act (ADA) provides civil rights for 2014-15 proposes a $4 million General Fund protections and equal access to public and augmentation and 42 new positions for the private services and facilities for individuals with Receiver’s office to comply with the Armstrong disabilities. In 1994 a lawsuit, Armstrong v. Brown, MOU. Of the requested positions, (1) 34 positions was filed alleging CDCR was not in compliance will be allocated so that each institution receives with the ADA. In 1999, CDCR negotiated a one additional position to assist with the workload settlement in the lawsuit and developed the related to ARP and ADA compliance, (2) two Armstrong Remedial Plan (ARP) to address the positions will support field operations, (3) four areas of noncompliance. In 2007, the court issued positions will be assigned to headquarters, and an injunction because it found CDCR to be in (4) two positions for sign language interpretation continued violation of the ADA and ARP. In will be assigned to the two new CDCR facilities— 2012, the court clarified the 2007 injunction, and CHCF and DeWitt Nelson. The administration specified that the Receiver’s office is also subject indicates that the requested funding and positions to the ARP. In August 2012, the Receiver signed will help reach the goal of 100 percent compliance an MOU with the plaintiffs, requiring all medical with the MOU by 2014-15. staff to comply with ARP and all orders from Sign Language Interpreter Positions the Armstrong court. Based on the outcomes of Are Necessary. In 2012, the Armstrong court compliance reviews conducted by CDCR’s Office ruled that CDCR must provide sign language of Audits and Court Compliance, the Receiver’s interpreters for all inmates requiring such office currently has an Armstrong compliance assistance. Due to the MOU, this requirement also percentage of 84 percent, with the goal of obtaining applies to the inmate medical services currently 100 percent compliance. overseen by the federal Receiver. The court also Currently, the workload associated with ruled that all institutions designated to house the MOU at each prison is being handled by hearing and speech impaired inmates must have administrative support staff in the inmate medial a permanent sign language interpreter available services program overseen by the Receiver. to assist such inmates. Despite this requirement, This workload is in addition to their normal CHCF and DeWitt Nelson currently lack such responsibilities. We also note that three analysts at interpreters due to an oversight in the previous CDCR headquarters are responsible for reviewing request that established the staffing packages for compliance documents and monitoring tour these intuitions. Accordingly, the Governor’s reports, as well as for developing corrective action proposal to provide interpreters to these plans and ensuring institution compliance with institutions will bring CHCF and DeWitt Nelson ARP. According to the Receiver’s office, there have in line with other CDCR facilities and the ARP. www.lao.ca.gov Legislative Analyst’s Office 39 2014-15 BUDGET Permanent Staffing Needs Unclear. As noted have different workload. Though each institution above, administration indicates that the requested will have some level of required activities, resources will help the Receiver’s office improve institutions with currently low levels of compliance from an Armstrong compliance rate of 84 percent will likely have greater workload. For example, to 100 percent by 2014-15. Specifically, the these institutions may have more substantial administration states that the proposed position for corrective action plans, may require more each institution will develop operating procedures monitoring and correction of staff noncompliance, for that institution, assist with corrective action and may require more training. This possibility plans, track allegations of noncompliance, and train seems to be supported by the fact that some other staff on ARP and ADA requirements. If the institutions are currently managing the workload, Receiver’s office achieves the projected compliance while others have difficulty meeting deadlines of 100 percent by 2014-15, it is unclear how much of or submitting complete documentation. We are that workload will exist after 2014-15. For example, concerned that, under the administration’s plan, once full compliance has been achieved, the need some institutions may be understaffed while others to implement corrective action plans should not may be overstaffed. Without established metrics be necessary. We also note that the workload to evaluate the workload at each institution, it is associated with tracking noncompliance should not possible at this time to determine appropriate be substantially diminished after achieving full ongoing staffing levels. compliance. Thus, it appears unnecessary for the LAO Recommendations. We find that the requested positions to be provided on a permanent two sign language interpreter positions proposed basis rather than on a limited-term basis. by the Governor are justified and recommend Quantity and Distribution of Staff May Not the Legislature approve them. However, while we Be Appropriate. The administration’s budget acknowledge that the Armstrong MOU has resulted proposes 40 positions to achieve full compliance in increased workload for the Receiver’s office, we with the MOU, a rate of approximately one position are concerned that the other 40 additional positions for every 250 Receiver budgeted staff positions. proposed by the Governor on a permanent basis By comparison, CDCR has 67 staff assigned to do not take into account the volume of workload ARP and ADA compliance for non-health care either at a statewide level or at each institution. We operations, a rate of approximately one position also are concerned that workload will decline in for every 755 CDCR budgeted staff positions. Since future years and that approving permanent staff is many of the compliance activities are associated therefore unnecessary. with tracking complaints against specific staff Given these concerns, we recommend that and training staff on ARP and ADA policies, the Legislature approve 14 one-year, limited-term 40 positions may be excessive for the volume of positions statewide for the Receiver to achieve work associated with compliance. In addition, it is ARP and ADA compliance. This would provide possible that some of the proposed institution-level the Receiver with the same compliance staff positions could cover several institutions, as many to total staff ratio that CDCR uses to achieve facilities are colocated or located within a short compliance. We also recommend that the distance of one another. Legislature require the Receiver to report this The proposal also includes one position for spring at budget hearings on specific workload every institution. However, each institution may and performance metrics by institution and 40 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET statewide. The measures the Receiver reports on services back to the state. We also note that in should include, but not be limited to: performance 2012, the chief executive officer of the California on the Armstrong audit tool, performance on Medical Facility (CMF) in Vacaville approached the internal audits, volume of staff noncompliance California Prison Industry Authority (CalPIA) about allegations, volume of inquiries and cases closed, developing a health care facilities cleaning service progress on corrective action plans, and number pilot project. The contract included the training of of staff training events. This information would inmate laborers, staff oversight of inmate laborers, allow the Legislature to reassess the appropriate the maintenance of cleanliness in clinical areas, and level of staffing as part of its spring budget the provision of cleaning materials. This pilot project deliberations. Should the Receiver present has been extended through 2014 and now employs information that suggests that additional positions 46 inmate workers. are necessary, or that positions should be provided Governor’s Proposal. The Governor’s on a permanent basis, the Legislature could budget proposes to expand the CMF pilot modify the level of staffing at that time. project regarding the cleaning of health care facilities on a statewide basis. Specifically, the Janitorial Crews budget proposes a $14.5 million General Fund Background. As part of the 2002 settlement augmentation for 2014-15, which would increase agreement in Plata v. Brown, CDCR agreed to to $19.5 million in 2015-16, for the Receiver to ensure clean and sanitary health care environments enter into a statewide health care facility janitorial in its prisons. Most of the cleaning is performed contract with CalPIA. By contrast, without this by inmates supervised by custody staff. Although proposal the Receiver’s office would likely spend the sanitation of health care facilities is held to a around $8 million to keep health care spaces in higher standard than the cleaning of non-health the prisons clean. The Governor’s budget also care facilities, the inmates do not receive training in proposes the elimination of 83 Receiver staff health care facility cleaning and disinfection. The positions in 2014-15, as the CalPIA contract will provision of these janitorial services varies widely replace existing Receiver janitorial resources. by institution. While some institutions have fixed The budget proposes to transfer these janitorial schedules to clean some or all of the health care positions to CalPIA. In addition, the proposal areas at the institution, other institutions have no set includes one full-time staff position for program cleaning schedules for any of their health care areas. oversight, and anticipates employing 628 trained We also note that at some institutions, additional inmate laborers. The statewide contract cost will cleaning is done by contracted janitors. be approximately $28 million in 2015-16 (upon In 2012, the Plata court ordered medical full implementation), which translates to a cost of inspections of institutions that had reached a $1.38 per square foot serviced. certain level of compliance with the 2002 settlement Proposal Has Merit. . . Given the concerns agreement. These inspections are performed by raised by the Plata court experts and the lack of court experts and included an evaluation of health statewide consistency in the sanitation of health care cleanliness and sanitation. Several of the care areas in the prisons, the Governor’s proposal audits identified deficiencies in facility cleanliness, to contract with CalPIA for janitorial services which could delay the transfer of responsibility for merits consideration. The CalPIA has experience the management and provision of inmate medical with managing clinical space cleanliness and www.lao.ca.gov Legislative Analyst’s Office 41 2014-15 BUDGET has already operated a pilot program at CMF. In According to information provided by CalPIA addition, developing a standardized statewide and the Receiver’s office, only 5 percent of the program for janitorial services would help ensure contract cost is for inmate wages. Nearly three- appropriate sanitation and, thus, improve the quarters of the cost is for the wages and benefits of state’s ability to regain control of inmate medical civil service employees and the oversight, training, services. and audit employees. Despite the recidivism The Governor’s proposal could also help reduction and improved cleanliness of this reduce inmate recidivism. This is because CalPIA proposal, we remain concerned about the high would train participating inmate laborers in costs—particularly the high personnel costs—of health facility cleaning standards and practices the Governor’s proposal. and provide certification to those inmates LAO Recommendation. While we who complete training. This training and acknowledge the need for improved janitorial certification could result in improved employment services, we recommend that the Legislature opportunities for such inmates upon their release withhold action on this proposal until the from prison and make them less likely to reoffend. Receiver’s office can justify the significant cost of . . . But Estimated Costs Appear Unnecessarily the contract with CalPIA. Accordingly, we also High. Although the Governor’s proposal could recommend the Legislature require the Receiver’s provide several benefits as discussed above, we office to report at budget subcommittee hearings find that the proposal would dramatically increase this spring on why these janitorial services cannot the amount the state spends on cleaning health be provided at a lower cost by CalPIA or an care spaces in the prison. As mentioned above, outside contractor. the Receiver’s office would likely spend around Capital Outlay $8 million on janitorial services absent the Governor’s proposal. This proposal would increase Noncontact Visiting Booths at Ventura those costs to nearly $28 million annually, at a cost Youth Correctional Facility per square foot of $1.38. By comparison, Kaiser pays $1.36 per square foot for janitorial services in Background. The DJJ within CDCR is its health care facilities. Similarly, janitorial services responsible for housing juvenile offenders sent to for comparable spaces at San Joaquin General its facilities by the juvenile courts for committing Hospital—which includes a secured wing that certain serious, violent, or sex offenses. The DJJ provides medical care to CDCR inmates—costs also houses minors who are sentenced to state $1.35 per square foot. While it may seem reasonable prison by the adult criminal courts, usually that the Receiver would have cleaning costs similar until they turn age 18, at which time they are to the private sector, we are concerned by that transferred to a CDCR prison. Since 1998, the parity because both of these health care providers DJJ population has declined. The DJJ is projected employ non-incarcerated individuals and must pay to have an average of 708 juvenile offenders in its at least minimum wage. By contrast, CalPIA will facilities in 2013-14 and 649 offenders in 2014-15. employ inmate laborers, who typically earn far less By June 30, 2019, DJJ is projected to have 556 than the minimum wage (often less than $1 per juvenile offenders. hour). The DJJ has three main facilities to house juvenile offenders: O.H. Close (OHC) Youth 42 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET Correctional Facility in Stockton, N.A. Chaderjian of 2013 and June 2015, the BTP population may (NAC) Youth Correctional Facility in Stockton, experience further declines as well. Specifically, if and the Ventura Youth Correctional Facility the BTP population declines by 15 percent, OHC (VYCF) in Camarillo. Each facility houses will have 12 BTP offenders, NAC will have 16 BTP juvenile offenders in smaller living units based offenders, and VYCF will have 20 BTP offenders on the type of treatment each offender needs. For by June 2015. Because the BTP units at OHC and example, the behavior treatment program (BTP) NAC could house 14 additional BTP offenders, living unit serves juvenile offenders who exhibit DJJ could transfer some of BTP offenders at VYCF aggressive and violent behavior. Each of the three to the other BTP programs, leaving as few as six DJJ facilities has a BTP living unit, with a capacity offenders at VYCF. This suggests that, by the time of 18 offenders at OHC and 24 offenders each at the noncontact visiting booths are constructed NAC and VYCF. As of December 30, 2013, there in September 2015, DJJ may only need to house are 11 BTP offenders at OHC, 15 at NAC, and 21 a handful of BTP offenders at VYCF. This raises at VYCF. questions about whether the state should invest in Governor’s Proposal. The Governor’s budget permanent infrastructure to service a dwindling for 2014-15 proposes to spend $590,000 from population of BTP offenders. the General Fund to construct four noncontact Noncontact Booths Not Needed at Other visiting booths at VYCF for use by juvenile Facilities. We also note that, despite the fact offenders in the BTP living unit. These booths that OHC and NAC house offenders in the would allow for enhanced security while BTP BTP program, neither of these facilities have offenders use their visiting privileges. The noncontact visiting booths. The department administration notes that there have been a indicates that neither facility has had difficulty variety of incidents during visiting hours with during visiting hours with BTP offenders as has BTP offenders, including fights and attempts to been experienced at VYCF. This raises questions introduce contraband into VYCF. According to about whether these booths are necessary or if the administration, noncontact booths would these difficulties could be addressed in other, less limit the occurrence of these incidents. The costly ways. proposed project would begin August 2014 and LAO Recommendation. We recommend that construction would conclude in September 2015. the Legislature deny the request to construct Declining DJJ Population May Make noncontact visiting booths at VYCF. Given Proposed Project Less Necessary. According to the likelihood that the population of offenders DJJ’s fall 2013 population projections, the number needing these booths will continue to decline, of juvenile offenders in the BTP living units will noncontact visiting booths could become largely decline from 54 to 38 between September 2013 unnecessary by the time they are completed and June 2015. However, more recent data suggest in September 2015. To the extent that the that the BTP population is currently lower than population of BTP offenders remains at VYCF, expected. Specifically, as of December 2013, only we recommend that DJJ use alternative means to 37 juvenile offenders were in BTP units, with provide these offenders with visits. For example, only 21 of these offenders housed at VYCF. Since VYCF could consult with NAC and OHC to the overall population of juvenile offenders is determine whether strategies used at the northern projected to decline by 15 percent between the end facilities could be employed at VYCF. www.lao.ca.gov Legislative Analyst’s Office 43 2014-15 BUDGET LOCAL PUBLIC SAFETY Overview commit certain other specified offenses. Felons who do not meet these criteria are The state works closely with local public safety either (1) required to serve their entire agencies in several ways to create a cohesive system felony sentence in county jail or (2) receive of state and local law enforcement. Specifically, the a “split sentence,” in which they spend the state provides funding to local law enforcement initial portion of their sentence in jail and through public safety grants administered the concluding portion in the community by various departments (such as the Office of under the supervision of county probation Emergency Services). In addition, the state assists departments. local law enforcement in their efforts. For example, the state’s Commission on Peace Officer Standards • Certain Parolees. Before realignment, and Training (POST) establishes statewide individuals released from state prison standards for local law enforcement to select and were supervised in the community by state train officers. parole agents. Following realignment, After the 2011 realignment, which, as we however, state parole agents generally discuss below, shifted certain state criminal justice only supervise individuals released from functions to local government, the state increased prison whose current offense is serious its involvement in local law enforcement in various or violent. The remainder are released to ways. For example, in recent years, the Board the community under the supervision of of State and Community Corrections (BSCC) county probation departments. has provided increased assistance to local law • Parole Violators. Prior to realignment, enforcement with additional grant programs, and individuals released from state prison data collection and sharing efforts. could be returned to prison for violating County Jails Grants the terms of their community supervision. Following realignment, however, those Background offenders released from prison—whether supervised by the state or counties—must 2011 Realignment. As part of the 2011-12 generally serve their revocation term in budget package, the state enacted legislation to county jail. realign to counties the responsibility for three different felon populations. Impact of Realignment on County Jail • Lower-Level Offenders. The 2011 Populations. As shown in Figure 20, the statewide realignment limited which felons can be jail population has increased by 11,000 inmates sent to state prison, thereby requiring since 2011, nearing the peak population of 82,000 that more felons be managed by counties. inmates that occurred in 2007. Realignment is Specifically, sentences to state prison are responsible for most of this increase. now limited to registered sex offenders, As of June 2013, 56 jail facilities in 25 counties individuals with a current or prior serious had average daily populations that exceeded their or violent offense, and individuals that rated capacities. In total, these facilities had 11,500 44 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET more inmates than their rated capacity. However, of 52 of the 58 counties found that 44 inmates are other jails had more capacity than inmates. currently serving sentences longer than ten years Specifically, 65 jail facilities in 45 counties had an whereas there were none prior to realignment. average daily population below rated capacity. In The most common sentence for these longer-term total, these facilities had 6,000 inmates less than inmates is drug trafficking. their rated capacity. We note that there are some Since existing jails were not generally designed counties with multiple facilities where one facility to house long-term offenders, the longer sentences may exceed its capacity while another may have resulting from realignment create challenges available bed space. This typically occurs where the for counties. For example, jails often have only facilities serve different populations (by gender or limited space for rehabilitative programs that security need for example) and the counties cannot serve long-term offenders. Jails also often have move inmates between facilities. limited medical facilities to effectively treat We also note that many county jail facilities are long-term inmates with health problems, which can under self-imposed or court-imposed population frequently result in inmates being transported to caps. As of June 2013, 39 facilities in 19 counties local medical facilities at a significant cost. were operating under either self-imposed caps or State Has Influence Over County Jail Graphic Sign Off court-imposed caps. When such facilities exceed Populations. Statutes enacted by the Legislature their population caps, they release inmates early. and Governor establish the body of laws that Secretary For example, in the first half of 2013, an average define crimes and specify the punishments for Analyst of about 13,000 inmates per month were released such crimes. Criminal sentencing law influences MPA early. the size of county jail populations in two primary Deputy In addition to changing the number of ways. First, it defines the types of crimes that are offenders in county jail, the 2011 realignment punishable by county jail terms. For example, changed the type of offenders in jail. Prior to offenders convicted of crimes that are defined in realignment, jails generally held defendants statute as misdemeanors cannot be sentenced to awaiting trial on arraignment and Figure 20 individuals sentenced to Average Daily Jail Population Is Reaching Peak Levels serve less than one year 84,000 in jail. These offenders 82,000 typically were in jail for 80,000 relatively short amounts of 78,000 time. After realignment, 76,000 however, certain felony 74,000 offenders began serving 72,000 all or a portion of their 70,000 sentence in county jail, 68,000 rather than in state prison. 66,000 For example, a 2013 survey 64,000 conducted by the California 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 State Sheriff’s Association www.lao.ca.gov Legislative Analyst’s Office 45 ARTWORK #140055 Template_LAOReport_mid.ait 2014-15 BUDGET prison. Similarly, as discussed above, offenders time. For example, DAs can seek a split with no prior convictions for serious, violent, or sentence or probation in which offenders sex offenses who are convicted of nonserious, serve their sentence in the community and non-violent crimes are also generally required to are only incarcerated if they violate the serve their sentences in county jail. In addition, terms of their supervision. criminal sentencing law dictates the amount of • Community Supervision and Revocation. time offenders spend in jail. For example, statute Counties can also influence the size of their limits misdemeanor jail terms to less than one jail populations by the manner in which year, and specifies the amount of time offenders they manage the offenders they supervise convicted of felonies can be required to spend in the community. For example, counties in jail. The state’s ability to control what offenses can reduce their jail populations through are eligible for punishment in county jail and the programs aimed at reducing the extent to amount of time offenders spend in county jail which the offenders commit new offenses exerts major influence over the size of county jail and are returned to jail. In addition, populations. counties also have flexibility in choosing Counties Also Have Significant Influence Over how to punish offenders that violate the Jail Population. Under current law, various factors terms of their supervision. For example, at the county level exert significant influence rather than returning such offenders to over the size of their jail populations. Some of the jail for extended periods of time, counties primary ways counties can influence the size of can use tools such as flash incarceration, in their jail population include: which a violator is incarcerated in jail for • Sentencing. Although judges are ultimately up to ten days. Other alternatives to longer responsible for the sentences offenders jail terms include electronic monitoring receive, county agencies have significant (also known as house arrest) and referrals influence over the sentencing process. For to programs such as drug abuse treatment example, probation departments provide programs. presentencing reports to the courts. These reports usually detail the relevant history of • Pretrial Release. Trial court judges the offender (such as prior criminal arrests are responsible for deciding whether to and convictions, family circumstances, release criminal defendants from custody work experience, and educational before the courts adjudicate their cases, background) and include a sentencing as well as what conditions to place on recommendation. The court uses these that release (such as a requirement to post reports to make sentencing decisions. In bail and be supervised). In cases where addition, county district attorneys (DAs) the judge requires bail, defendants who can influence sentencing based on how are unable to pay may be required to stay they charge offenders. For example, DAs in jail until their cases are adjudicated. can decide to charge a crime as a felony or Such individuals (known as “pretrial” a misdemeanor, with the latter resulting in defendants”) make up 63 percent of the lesser jail time. In addition, they can seek jail population. Some counties and courts sentences that result in limited or no jail use pretrial risk assessments to determine 46 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET which defendants could safely be released would be used to help alleviate jail overcrowding even if they cannot post bail. These tools by building increased capacity, with some priority typically require staff to collect certain to county applicants who demonstrate the use of information about the defendant (such a risk assessment for pretrial defendants. On the as residential history). Most tools then other hand, the administration also suggests the provide a single risk score on the likelihood grants would be awarded in a manner similar to that a defendant will be rearrested or miss those authorized in Chapter 42, which focused on a court appearance. By using such tools program space, rather than additional capacity. to identify pretrial defendants to safely Administration Needs to Better release, counties can significantly reduce Assess County Need their jail populations. Proposal Lacks Adequate Assessment of Recent Funding Provided for Jail Construction. Need. It is clear that realignment has resulted in an In recent years, the state has provided additional increase in the county jail population and that some funding for jail construction. For example, the county jails are not currently designed to house Legislature approved Chapter 7, Statutes of 2007 long-term offenders. Thus, there is likely a need for (AB 900, Solorio), which provided $1.2 billion to funding to support additional county jail projects. construct new jails. These funds will add about However, the administration has not provided a 10,000 beds to county jails. In addition, in response detailed analysis regarding the magnitude of either to the additional pressures created by realignment, programming or capacity needs and the extent to the Legislature adopted Chapter 42, Statutes of 2012 which the Governor’s proposal would meet these (SB 1022, Committee on Budget and Fiscal Review), needs. For example, the administration has not which authorized an additional $500 million for provided an estimate of the number of additional jail construction. As can be seen in Figure 21 (next jail beds counties need or the amount of additional page), Chapter 42 will add program and medical rehabilitation program or health service space space to jails as well as about 1,400 additional beds. needed. Although the population currently exceeds According to the BSCC, these additional funds capacity at some jails, we note that few of the grant were geared mainly toward increasing the ability projects funded from Chapter 42 monies have been of counties to provide rehabilitation services rather built yet. than increasing county jail capacity. According to BSCC, it received a total of Governor’s Proposal $1.2 billion in grant requests in 2013 for jail construction that it did not fund. Although this The Governor’s budget for 2014-15 proposes information could suggest that the current need an additional $500 million in lease-revenue bonds for additional jail funding potentially exceeds for local jail construction. Under the proposal, $500 million, it is insufficient to assess the true counties would be subject to a 10 percent cost-share extent of the problem. This is because it is unclear requirement. However, at the time of this analysis, whether counties that are requesting additional jail the administration had not provided much detailed construction funding have: information regarding the proposal. As such, it is unclear what types of projects would be funded • Maximized Alternatives to Increasing Jail with the proposed grants. On the one hand, the Space. As discussed above, counties have administration has suggested that these grants significant influence over the size of their www.lao.ca.gov Legislative Analyst’s Office 47 2014-15 BUDGET jail populations. Figure 21 Specifically, Overview of State-Funded Jail Construction Projects counties can use (Dollars in Millions) various tools Estimated to reduce jail Additional Beds to Estimated populations, such County Award Amount Be Constructed Completion Date as split sentences, AB 900a (Phase I) Calaveras $26 95 Completed probation, Madera 30 144 Completed alternatives to San Bernardino 100 1,392 Completed incarceration, Solano 62 362 April 2014 San Luis Obispo 25 155 June 2016 rehabilitation San Diego 100 842 2016 programs, flash Amador 23 89 TBD San Joaquin 80 1,280 TBD incarceration, and Subtotals ($446) (4,359) aggressive pretrial AB 900 (Phase II) release. Counties Imperial $33 232 December 2015 Kings 33 252 April 2016 can also take Stanislaus 80 456 September 2016 other steps, such San Benito 15 60 May 2017 as contracting Kern 100 822 June 2017 Santa Barbara 80 376 February 2018 for jail space in Tulare 60 514 May 2018 other county Orange 100 512 November 2018 jails. Counties Los Angeles 100 1,024 TBD Maderab 3 — TBD that have not Monterey 36 288 TBD employed such Riverside 100 1,250 TBD Siskiyou 24 150 TBD tools may not Sutter 10 42 TBD necessarily need Subtotals ($741) (5,746) state funds for jail Chapter 42c Fresnod $79 -200 TBD construction to Lake 20 40 TBD address their jail Napa 13 96 TBD capacity needs. Orange 80 384 TBD Sacramentob 56 — TBD • Planned to Make San Jaoquin 33 384 TBD San Mateob 24 — TBD Effective Use of Santa Barbara 39 228 TBD Program Space. Santa Cruz 25 64 TBD Shasta 20 64 TBD It is also unclear Solanob 23 — TBD on the extent to Tehama 7 64 TBD Tulare 40 82 TBD which counties Tuolomne 20 198 TBD are requesting Subtotals ($480) (1,404) funding to build Totals $1,667 11,509 a facilities that Chapter 7, Statutes of 2007 (AB 900, Solorio). b Madera, Sacramento, San Mateo, and Solano Counties are building medical and/or programming space instead of additional beds. would be used c Chapter 42, Statutes of 2012 (SB 1022, Committee on Budget and Fiscal Review). d Fresno County is replacing a 500-bed building with a 300-bed expansion to an existing building. in an effective TBD = to be determined. 48 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET manner. In particular, while many that felons with sentences over ten years be counties indicate they need additional required to serve their sentence in state prison program space in their jails, such space rather than in county jail. The administration may not necessarily be used to deliver estimates that this change would increase the state programs that can be demonstrated to be prison population by about 300 inmates annually. effective. The administration also indicates that it may reconsider this policy change depending on the • Identified Local Funding Sources. In state’s ability to meet the federal court-ordered addition, it is unclear to what extent population cap. counties have attempted to identify local funding sources to address their jail LAO Assessment construction needs. Prison Population Effect Likely Much Larger The absence of such analysis make it more Than Estimated. The administration estimates difficult for the Legislature to assess what that about 300 inmates would be affected by this infrastructure needs counties lack and whether the change. However, this data is based on current proposed $500 million in the Governor’s budget for county sentencing practices. If this proposal were jail construction is needed, or if a different amount adopted, counties would have a fiscal incentive to would be appropriate. seek longer sentences for defendants as doing so would shift the financial responsibility of these LAO Recommendation offenders from counties to the state. Moreover, as We recommend that the Legislature request counties struggle with increased jail populations, additional information from the administration longer sentences could also become an easy way to justifying the $500 million in lease-revenue help reduce county jail populations. Accordingly, bonds proposed for jail construction. Specifically, it is likely that the Governor’s proposal would we recommend directing the administration increase the state prison population by more to conduct an analysis of the extent to which than 300 offenders annually in the long run. In counties need additional jail funding. Such an addition to increasing state costs, we note that analysis should include an assessment of (1) the the proposal would make it more difficult for the extent to which counties have maximized use of state to comply with the federal court-ordered existing jail space, (2) how effectively counties population cap, as it would be increasing the plan to use any proposed space for rehabilitation number of inmates in state prisons. programs, and (3) the ability of counties to fund Reverses Realignment. Additionally, part of jail construction with local resources. the policy rationale for realignment was to make counties responsible for sentencing decisions Requiring Sentences by making them responsible for the custody of Longer Than Ten Years Be almost all nonserious offenders. This proposal Served in State Prison reverses a portion of this outcome and instead allows counties to shift the cost of non-violent Governor’s Proposal offenders onto the state in cases where counties In order to assist counties with their jail can give offenders sufficiently lengthy sentences. capacity issues, the Governor’s budget proposes www.lao.ca.gov Legislative Analyst’s Office 49 2014-15 BUDGET Potential Sentencing Issues for Some Felonies. Changes to Split Sentencing The categorization of some felonies as non-violent and nonserious should typically mean that such Background crimes are punished with shorter sentences than As mentioned above, the 2011 realignment those for serious or violent felonies. However, shifted responsibility for housing certain felons in some cases, due to specific provisions in from the state to the counties. To reduce the sentencing law and the way crimes are prosecuted, burden on counties of housing these offenders, the offenders convicted of such crimes can receive 2011 realignment allows judges to sentence these longer sentences. In other words, although felons to split sentences. Offenders that receive individual nonserious and non-violent crimes a split sentence spend the initial portion of their may have sentences specified in statute that are sentences in jail and the remaining portion in the significantly shorter than ten years, these felonies community under the “mandatory supervision” can be charged with additional nonserious and of county probation departments. Split sentences non-violent crimes and enhancements that result reduce jail populations because they reduce in an overall sentence length similar to sentences the amount of time offenders spend in jail, as for serious or violent felonies. (We note that many well as reduce county costs because mandatory of these longer sentences that are currently being supervision is typically less expensive than jail. served in county jails are drug offenses—often The extent to which counties employ split methamphetamine-related offenses.) This suggests sentencing varies greatly. For example, judges that there is a mismatch between the severity of in 18 counties use split sentences for more than these sentences and where these sentences must be half of eligible felons, while in Los Angeles served. County, only 5 percent of felons receive them. It is LAO Recommendation estimated that 28 percent of eligible felons receive split sentences statewide. We recommend that the Legislature reject this proposal. Although county jails are not well suited Governor’s Proposals to house longer-term offenders, in time, counties The Governor proposes budget trailer can adapt to the new population they face following legislation to make two statutory changes to split realignment and can limit their long-term jail sentencing. Both changes are intended to increase populations through changes in sentencing the use of these sentences. We discuss each in practices (such as wider use of split sentences). greater detail below. To the extent the Legislature is concerned about Presumptive Split Sentencing. The Governor long-term offenders in county jail, it has two proposes legislation to make spilt sentences the fundamental choices. On the one hand, it could presumptive sentence for eligible felons. Under the place sentencing limits on certain nonserious proposal, any county jail felony sentence would be and non-violent crimes to reduce the incidences a split sentence unless the court finds that the facts of ten year or more jail terms. Conversely, if the of the case warrants a straight jail sentence. The Legislature decides such crimes merit lengthy proposed legislation also restricts how judges can sentences, it could classify such crimes in statute as divide split sentences between jail and mandatory serious offenses and therefore eligible for prison. supervision based on the length of the sentence. 50 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET • For offenders whose sentences are three We are concerned, however, about the years or less, judges would have complete proposal’s restriction on the ability of judges to discretion in determining what portion determine the appropriate amount of time for of the sentence is served in jail or under offenders to spend on mandatory supervision. mandatory supervision. According to the administration, community supervision lasting between one and three to • For offenders whose sentences are more four years is consistent with best practices, and than three years but less than eight years, yields better results for offenders than shorter or judges would be required to order at least lengthier supervision. However, we have found one year of mandatory supervision. no evidence that there is an optimal length of supervision. While some research suggests that • For offenders whose sentences are greater shorter and more intensive supervision is better than eight years, judges would not be than longer and less intensive supervision, it allowed to order mandatory supervision is unclear whether the majority of a sentence terms that exceed one-third of the total is better served in jail or under community sentence length. supervision. One-Year Enhancement for Mandatory We also note that adding restrictions on Supervision Felonies. In addition, the Governor’s how sentences are split removes additional budget package adds an additional one-year flexibility from judges. Moreover, data is not enhancement to all felony sentences in cases readily available on how judges are currently where the offender committed the felony while splitting sentences, making it unclear how the under mandatory supervision. proposed restrictions will change the amount of time offenders are spending outside of jail in the Presumptive Split Sentencing Has community. To the extent the proposed changes Merit but Needs Modification result in less mandatory supervision time than is As discussed above, split sentences can currently being used, the changes could result in help reduce county jail population and costs. additional pressure on county jails. Moreover, split sentences may improve outcomes for some offenders. Specifically, research One-Year Enhancement Could Exacerbate indicates structured supervision and programs Overcrowding and Is Unnecessary delivered through community supervision can The Governor’s proposed one-year lower recidivism. To the extent that presumptive enhancement for mandatory supervision felonies split sentencing increases the use of mandatory would result in longer sentences and, thus, increase supervision, this could increase the number state prison and county jail populations. The of offenders subject to structured supervision administration assumes that the proposal would and programs delivered in the community and increase the rate at which counties and courts improve offender outcomes. In light of this, the employ split sentencing by deterring offenders from administration’s proposal to increase the use reoffending while on community supervision. To of split sentences by making them presumptive the extent that the Governor’s proposal increases merits legislative consideration. the likelihood that offenders receive split sentences, it would result in a reduction in the average daily www.lao.ca.gov Legislative Analyst’s Office 51 2014-15 BUDGET jail population as such offenders would spend less the state should make sure that counties have time in jail than would otherwise be the case under the ability to control and reduce the size of their the Governor’s proposal. Similarly, the proposal jail populations, we recommend that the state would reduce the jail population to the extent that do so without using sentence enhancements that it decreased the likelihood that offenders commit have the potential to create the opposite effect. new offenses while under mandatory supervision. Accordingly, we recommend that the Legislature However, the actual extent to which the proposed reject this proposal. Although a one year sentence change would prompt additional split sentences enhancement may increase the use of split or lower recidivism rates remains unclear. Thus, sentencing, it also may increase jail and prison it is uncertain the precise net impact that the populations. If presumptive split sentencing does Governor’s proposal collectively would have on jail not have a measurable effect on the use of split operations and costs. sentencing, the Legislature may want to request The effect of the proposal on the state prison information on why counties are not using split population is also unclear, though it is less likely sentences and explore a variety of options that do to result in a net reduction. On the one hand, the not risk exacerbating jail and prison population additional punishment could deter offenders from overcrowding issues. committing new felonies, which could reduce the POST number of offenders sent to state prison. However, to the extent it does not change offender behavior, it Background would simply increase state prison populations. This would be problematic because it would exacerbate The POST sets minimum selection and state prison overcrowding and make it more difficult training standards for California law enforcement, for the state to comply with the federal court- develops and runs training programs, and ordered population cap. reimburses local law enforcement for training. The Governor’s budget includes about $56 million from LAO Recommendation all fund sources for POST in 2014-15, a decrease Modify Presumptive Split Sentencing Proposal. of about $5 million (or 8 percent) from the revised We recommend that the Legislature approve estimate of 2013-14 expenditures. Of the total, the Governor’s proposal to make split sentences $40 million would be spent on state operations, presumptive. To the extent that presumptive such as the development of new officer selection split sentencing increases its use, it can reduce standards, training materials, and training state jail overcrowding and potentially provide better law enforcement. The remaining $16 million outcomes for offenders. However, in view of our would be spent on local assistance, such as the above concerns regarding the proposed restrictions reimbursement of local law enforcement costs on how sentences could be split, we recommend that associated with attending POST training (including the Legislature modify the proposal to eliminate travel, food, and course tuition). such restrictions. Judges would continue to have The POST is funded primarily by the Peace the ability to split sentences between jail time and Officers’ Training Fund (POTF), which derives mandatory supervision as they deem appropriate. revenue largely from penalty assessments on Reject One-Year Enhancement Proposal. criminal and traffic fines. As shown in Figure 22, While we concur with the administration that expenditures have exceeded revenues from 52 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET POTF for several years, resulting in an operating • No longer reimburse training costs for shortfall. This is due to a variety of factors. For attendees who register after registration example, expenditures from POTF increased when deadlines and are admitted to courses. POST decided to increase reimbursement rates • Reduce the availability of certain courses to local law enforcement for attending trainings that are not mandated or part of the core beginning in 2008-09. The commission did this curriculum to 2012-13 levels. as a way to assist local governments with their budget constraints during the economic downturn. • Suspend all symposia, workshops, and According to the commission, expenditures seminars. Although some team-building increased further in recent years due to growth workshops will continue, the number in the number of individuals attending trainings, offered will be reduced. (Previously as local law enforcement budgets became less scheduled workshops will not be cancelled, constrained. The reduction in POTF revenue is also but must conclude before June 30, 2014. Graphic Sign Off due to several factors, including funding reductions Additional exceptions could be granted by Secretary made to law enforcement that may have resulted the commission’s executive director.) in fewer fines being issued. For the past several Analyst years, a significant fund balance in the POTF was • Suspend reimbursements for travel, MPA used to address the fund’s operating shortfall. We lodging, commuter lunch, and per diem Deputy note, however, that such a fund balance is currently expenses. However, mandated and insufficient to fully support planned expenditures contracted training courses are exempted in the future. from this suspension. Governor’s Proposal Figure 22 In order to bring POTF Expenditures Exceed Revenues, expenditures more in line Creating Operating Shortfall with revenues, POST has (In Millions) reduced services supported by $70 POTF in the current year and plans to continue to do so in 60 the budget year. As reflected 50 in the Governor’s proposed budget, the commission 40 estimates that such 30 reductions will create savings Expenditures of $1 million in 2013-14 20 Revenues and Transfers and $7 million in 2014-15. 10 Specifically, as of January 1, 2014, the commission has 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 taken steps to: POTF = Peace Officers’ Training Fund. ARTWORK #140055 www.lao.ca.gov Legislative Analyst’s Office 53 Template_LAOReport_mid.ait 2014-15 BUDGET Proposal Does Not Fully Address POST must make additional ongoing reductions Operating Shortfall of around $9 million annually—equivalent to a 64 percent reduction in local assistance payments Despite the above reductions, the proposed beginning in 2014-15. This could be accomplished expenditures from the POTF are expected to by eliminating various types of local assistance that exceed revenues by about $9 million in 2014-15. POST currently provides. For example, POST could An expected reserve balance of $11.8 million at the reduce reimbursements to local law enforcement end of 2013-14 would help keep the fund solvent for tuition costs and the salary costs of officers through 2014-15. However, the reserve balance attending training courses. is estimated to be only $2.8 million at the end of As mentioned above, POST indicates that law 2014-15. Thus, if POST plans to continue the same enforcement agencies have begun to send more level of activities in 2015-16, the reserve will not be officers to POST trainings. This could be a sign large enough to cover all of the expenditures for that local law enforcement budgets have begun such activities—resulting in the fund becoming to recover. Given this possibility and the limited insolvent partway through 2015-16. resources available from the POTF to support LAO Recommendation training, it seems appropriate for POST to scale back its reimbursements. Although such actions Because of the possibility that the POTF would make training more expensive for local law could become insolvent in the near future, we enforcement, they are necessary to help ensure that recommend that the Legislature take steps to the POTF is able to continue to support local law further reduce expenditures in the budget year. In enforcement in the long run. order to permanently bring the fund into balance, 54 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET SUMMARY OF LAO RECOMMENDATIONS Issue Governor’s Proposal LAO Recommendation Judicial Branch Trial court funding Increase of $100 million (General Approve proposal. Define legislative augmentation Fund) for trial court operations. priorities for proposed augmentation. Consider implementing more efficiencies to help courts operate more efficiently. Establish a comprehensive trial court assessment program. Trial court reserves policy No proposal. Maintains existing Modify trial court reserves policy to trial court reserves policy as address some of all the unintended amended in 2013-14. challenges related to cash flow, contract expenditures, future project funding, and incentives for implementing efficiencies. California Department of Corrections and Rehabilitation (CDCR) Adult prison and parole Reduce by $23.4 million (primarily Withhold until May Revision. Direct populations General Fund) for various department to adjust proposal for savings adjustments associated with associated with the delayed activation of prison and parole caseload the California Health Care Facility. Direct changes. department to report at budget hearings on instituting a registry cap for certain mental health positions, as well as its use of savings from vacant mental health positions. Prison staffing and overtime Increase of $5.9 million (General Direct department to revise the way it Fund) for correctional overtime budgets for relief officers and Permanent costs. Increase of $9 million Intermittent Correctional Officers (PICOs), (General Fund) and 84 positions to take better advantage of the benefits related to new relief factor of PICOs. Reduce overtime budget calculation. by $104 million to account for funding available from vacant positions to support overtime. Academy augmentation Increase of $61.7 million (General Approve proposal. Direct department to Fund) and 147 positions for (1) adjust its academy budget biannually CDCR’s academy. to ensure department’s staffing needs are met and (2) continue to offer cadets PICO positions. Drug interdiction proposal Increase of $14 million (General Provide $3 million annually on a three-year Fund) and 81 positions for drug limited term basis to pilot drug interdiction interdiction activities. strategies, in order to ensure that the most cost-effective approach is adopted. Inmate pharmaceutical Provide $161 million (General Approve proposal on a two-year limited- augmentation Fund) in ongoing support for term basis. Direct Receiver to report on inmate pharmaceuticals. potential savings that could be achieved by implementing additional efficiencies. (Continued) www.lao.ca.gov Legislative Analyst’s Office 55 2014-15 BUDGET Issue Governor’s Proposal LAO Recommendation Armstrong compliance Increase of $4 million (General Approve two positions proposed for sign funding Fund) and 42 additional language interpreters. Approve 14 of the positions for the Receiver’s remaining positions, but on a one-year office to comply with limited-term basis, given the uncertainty requirements of Armstrong v. regarding required workload. Direct Brown lawsuit. Receiver to report on workload and performance metrics. California Prison Industry Increase of $14.5 million (General Withhold recommendation. Require Authority (CalPIA) janitorial Fund) for the Receiver’s office Receiver to justify cost of contract at crews to contract with CalPIA for budget hearings. janitorial services. Ventura Youth Correctional Provide $590,000 (General Fund) Reject proposal given declining state Facility (VYCF) noncontact to construct four noncontact juvenile offender population and the fact visiting booths visiting booths at VYCF. that other facilities do not have such booths. Local Public Safety County jail grants Provide $500 million in new Direct administration to conduct an analysis lease-revenue bonds for local of county jail needs to justify proposal. jail construction. Greater than ten year Require that felony sentences Reject proposal. Could either limit the sentences served in state longer than ten years be served amount of time certain offenders can prison in state prison, rather than spend in county jail or reclassify certain county jail. crimes as serious offenses. Presumptive split sentencing Make split sentences presumptive Approve proposal to make split sentences and place restrictions on use of presumptive, but reject proposed mandatory supervision. restrictions on mandatory supervision. These changes will help counties better manage their jail populations. One-year enhancement for Add a one-year enhancement Reject proposal as it could increase state felonies committed on to felony sentences in cases prison and county jail populations. mandatory supervision where the felony was committed on mandatory supervision. Peace Officer Standards and Reduce by $7 million local Reduce local assistance spending from Training assistance spending from the the POTF by an additional $9 million to Peace Officer Training Fund permanently bring the fund into balance. (POTF) to prevent shortfall in the fund. 56 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET www.lao.ca.gov Legislative Analyst’s Office 57 2014-15 BUDGET 58 Legislative Analyst’s Office www.lao.ca.gov 2014-15 BUDGET www.lao.ca.gov Legislative Analyst’s Office 59 2014-15 BUDGET Contact Information Drew Soderborg Managing Principal Analyst 319-8346 Drew.Soderborg@lao.ca.gov Aaron Edwards Prisons and Parole 319-8351 Aaron.Edwards@lao.ca.gov Sarah Larson Inmate Health Care 319-8306 Sarah.Larson@lao.ca.gov Anita Lee Courts 319-8321 Anita.Lee@lao.ca.gov Lia Moore Local Public Safety 319-8333 Lia.Moore@lao.ca.gov Peace Officer Standards and Training LAO Publications This report was reviewed by Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 60 Legislative Analyst’s Office www.lao.ca.gov