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The 2016-17 Budget: Department Of Consumer Affairs

Legislative Analyst's Office · lao-3371 · Post · 2016-02-25

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2016-17 BUDGET The 2016-17 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 • FEBRUARY 2016 www.lao.ca.gov Legislative Analyst’s Office 1 2016-17 BUDGET 2 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET TABLE OF CONTENTS Executive Summary ��1 Criminal Justice Budget Overview ��3 Cross Cutting Issue: Criminal Fine and Fee Revenue ��5 Background ��5 Governor’s Proposals ��7 LAO Assessment ��7 LAO Recommendations ��8 California Department of Corrections and Rehabilitation ��10 Overview ��10 Adult Prison Population Projected to Increase Slightly and Parolee Population Projected to Decline ��10 Plans for Complying With Court-Ordered Population Cap ��12 Drug Interdiction ��16 Housing Unit Conversions ��19 Alternative Custody Programs ��21 Programs and Services for Long-Term Offenders��22 Male Community Reentry Program ��26 Federal Receiver for Inmate Medical Services ��27 Ironwood State Prison Maintenance Staff ��31 Judicial Branch ��31 Overview ��31 $20 Million Augmentation for Trial Court Operations ��32 New Court Innovations Grant Program ��33 Judicial Branch Facility Construction Proposals ��35 Department of Justice ��38 Overview ��38 Fraud and Elder Abuse Enforcement Enhancement ��38 Public Protection and Consumer Protection Enforcement Initiative ��39 Local Public Safety��43 County Jail Grants ��43 City Law Enforcement Grants ��46 Trial Court Security ��47 Summary of LAO Recommendations ��49 www.lao.ca.gov Legislative Analyst’s Office i 2016-17 BUDGET ii Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET EXECUTIVE SUMMARY Overview. The Governor’s budget proposes a total of $15.6 billion from various fund sources for judicial and criminal justice programs in 2016-17. This is an increase of $582 million, or 3.9 percent, above estimated expenditures for the current year. The budget includes General Fund support for judicial and criminal justice programs of $12.6 billion in 2016-17, which is an increase of $571 million, or 4.7 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. Criminal Fine and Fee Revenue. The Governor’s budget includes various proposals to address operational shortfalls in several state funds due to declines in criminal fine and fee revenue. These include expenditure reductions, cost shifts to the General Fund and other funds, and cash flow loans from the General Fund. Given that the various state funds receiving fine and fee revenue have been facing financial difficulty for years, the Legislature has few options beyond approving the Governor’s proposed short-term solutions for addressing the operational shortfalls and insolvencies in these state funds in 2016-17. However, to permanently address the recurring problem, we recommend the Legislature implement ongoing, systemic changes to the state’s criminal fine and fee system. Specifically, we recommend the Legislature (1) reevaluate the overall structure of the fine and fee system, (2) increase legislative control over the use of criminal fine and fee revenue, and (3) restructure the criminal fine and fee collection process. Plans for Complying With Court-Ordered Population Cap. In recent years, the state has been under a federal court order to reduce overcrowding in the 34 state prisons operated by the California Department of Corrections and Rehabilitation (CDCR). Chapter 310 of 2013 (SB 105, Steinberg) authorized CDCR to enter into contracts to secure a sufficient amount of inmate housing to meet the court-ordered population cap and to avoid the early release of inmates which might otherwise be necessary to comply with the order. This authority is currently set to expire on December 31, 2016. The administration proposes extending the authority to December 31, 2020. The Governor’s budget includes $259 million from the General Fund to maintain about 9,000 contract beds in 2016-17. In addition, the budget assumes the continued operation of the California Rehabilitation Center (CRC) in Norco, despite the fact that the administration has indicated that closing the facility is a priority. We recommend that the Legislature approve the administration’s requested extension of authority to procure contract beds as it is very likely that the administration will need to continue utilizing contract beds over the next several years in order to maintain compliance with the prison population cap. We also recommend that the Legislature direct the administration to close CRC because its capacity is not necessarily needed to comply with the federal court-ordered prison population cap, and its closure would result in significant ongoing General Fund savings. Inmate Rehabilitation Proposals. The Governor’s budget includes $10.5 million to expand the availability of rehabilitation programs for long-term offenders. Research shows that rehabilitative programs are most effective when they target offenders who have been assessed as a www.lao.ca.gov Legislative Analyst’s Office 1 2016-17 BUDGET moderate-to-high risk to reoffend. However, only a portion of the funding proposed for long-term offenders would support higher-risk offenders, even though many of these offenders are currently not receiving rehabilitative programming. Accordingly, we recommend that the Legislature approve only the portion of the proposal that increases rehabilitative programming opportunities for higher-risk offenders and reject the remainder of the proposal that would exclusively target long-term offenders, which tend to be of low risk. The budget also proposes $32 million to expand the Male Community Reentry Program, which houses inmates nearing release in residential facilities and provides them with rehabilitative programming. We recommend the Legislature reject the proposal, as it is unlikely to be the most cost-effective recidivism reduction strategy given that it does not target higher-risk offenders and is very costly. Trial Courts. The Governor’s budget proposes a $20 million General Fund base augmentation for trial court operations. The administration has not provided sufficient information to justify why the trial courts need this additional funding. For example, it is unclear what specific needs at the trial courts are not currently being met that necessitate an augmentation. Moreover, we note that the Governor’s budget already includes $72 million for workload changes, increased costs, and the expansion of specific services—making it even less clear why the proposed $20 million in resources is needed for trial court operations. Accordingly, we recommend rejecting the proposal. County Jail Grants. The Governor’s budget proposes one-time funding of $250 million from the General Fund for jail construction. However, the administration has not provided a detailed analysis regarding the magnitude of either programming or capacity needs or the extent to which the proposed funding would meet these needs. For example, the administration has not provided an estimate of the number of additional jail beds counties need or the amount of additional rehabilitation program or health service space needed that takes into account (1) the impact of Proposition 47 or (2) the extent to which eligible counties have pursued alternatives that could reduce or eliminate the need for state funding. Accordingly, we recommend the Legislature reject the Governor’s proposal. 2 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET CRIMINAL JUSTICE BUDGET OVERVIEW The primary goal of California’s criminal Since 2012-13, overall state spending on justice system is to provide public safety by criminal justice programs has increased. This deterring and preventing crime, punishing was largely due to additional funding for CDCR individuals who commit crime, and reintegrating and the trial courts. For example, increased criminals back into the community. The state’s CDCR expenditures resulted from (1) increases in major criminal justice programs include the court employee compensation costs, (2) the activation of system, CDCR, and the Department of Justice. The a new health care facility, and (3) costs associated Governor’s budget proposes total expenditures of with increasing capacity to reduce prison over $15 billion for judicial and criminal justice overcrowding. During this same time period, programs. Below, we describe recent trends in General Fund augmentations were provided to the state spending on criminal justice and provide an trial courts to partially offset reductions made in overview of the major changes in the Governor’s prior years. proposed budget for criminal justice programs in Governor’s Budget Proposals 2016-17. As shown in Figure 2 (see next page), the State Expenditure Trends Governor’s 2016-17 budget includes a total of Over the past decade, total state expenditures $15.6 billion from all fund sources for judicial on criminal justice programs has varied. As shown and criminal justice programs. This is an increase in Figure 1, criminal justice spending declined of $582 million (3.9 percent) over the revised between 2010-11 and 2012-13, primarily due to two 2015-16 level of spending. General Fund spending factors. First, in 2011 the state realigned various is proposed to be $12.6 billion in 2016-17, which criminal justice responsibilities Figure 1 to the counties, Judicial and Criminal Justice Expenditures including the (In Billions) responsibility for certain low-level Other Funds $16 felony offenders. General Fund 14 This realignment reduced state 12 correctional 10 spending. Second, 8 the judicial branch— 6 particularly the trial courts—received 4 significant one-time 2 and ongoing General Fund reductions. 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 www.lao.ca.gov Legislative Analyst’s Office 3 2016-17 BUDGET Figure 2 Judicial and Criminal Justice Budget Summary (Dollars in Millions) Change From 2015-16 Actual Estimated Proposed 2014-15 2015-16 2016-17 Actual Percent Department of Corrections and $10,077 $10,395 $10,540 $145 1.4% Rehabilitation General Funda 9,804 10,097 10,273 176 1.7 Special and other funds 273 299 267 -32 -10.6 Judicial Branch $3,229 $3,429 $3,604 $175 5.1% General Fund 1,404 1,598 1,702 104 6.5 Special and other funds 1,825 1,831 1,902 71 3.9 Department of Justice $724 $804 $826 $22 2.7% General Fund 190 206 217 11 5.4 Special and other funds 535 598 609 11 1.8 Board of State and Community Corrections $128 $185 $418 $233 126.3% General Fund 68 68 329 261 384.6 Special and other funds 59 117 89 -28 -23.9 Other Departmentsb $220 $241 $248 $7 2.8% General Fund 62 61 80 19 30.7 Special and other funds 158 180 168 -12 -6.7 Totals, All Departments $14,378 $15,054 $15,636 $582 3.9% General Fund 11,528 12,029 12,601 571 4.7 Special and other funds 2,850 3,025 3,036 10 0.3 a Does not include revenues to General Fund to offset corrections spending from the federal State Criminal Alien Assistance Program. b Includes Office the Inspector General, Commission on Judicial Performance, Victim Compensation and Government Claims Board, Commission on Peace Officer Standards and Training, State Public Defender, funds provided for trial court security, and debt service on general obligation bonds. Note: Detail may not total due to rounding. represents an increase of $571 million (4.7 percent) the Governor’s budget includes (1) $58 million above the revised 2015-16 level. to expand inmate rehabilitation programs, Major Budget Proposals. The most significant (2) $30 million for a new Court Innovation Grant piece of new spending included in the Governor’s program for trial courts, (3) $21 million for court budget is a proposal to provide a one-time General workload associated with Proposition 47, and Fund augmentation of $250 million to the Board (4) a $20 million base augmentation for the trial of State and Community Corrections (BSCC) for courts. (Please see our recent report, The 2016-17 jail construction. The BSCC would be responsible Budget: Fiscal Impacts of Proposition 47, for more for allocating these funds to counties. In addition, detailed information regarding the fiscal impact of the budget includes various augmentations for Proposition 47.) CDCR and the judicial branch. For example, 4 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET CROSS CUTTING ISSUE: CRIMINAL FINE AND FEE REVENUE LAO Bottom Line. Given that various state both courts and counties—collect payments funds receiving criminal fine and fee revenue from individuals and then distribute them to have been facing financial difficulty for years, the numerous funds to support various state and local Legislature has few options beyond approving government programs and services. State law the Governor’s proposed short-term solutions dictates a very complex process for the distribution for addressing the operational shortfalls and of fine and fee revenue. The complexity arises from insolvency in these state funds in 2016-17. However, the numerous statutes that specify (1) the order in to permanently address the recurring problem, we which the payments collected from an individual recommend the Legislature implement ongoing, are to be used to satisfy the various fines and fees systemic changes to the state’s criminal fine and fee and (2) how the revenue from each of the individual system. Specifically, we recommend the Legislature fines and fees will be distributed among various (1) reevaluate the overall structure of the fine state and local funds. and fee system, (2) increase legislative control Use of Criminal Fine and Fee Revenue. In over the use of criminal fine and fee revenue, and 2013-14, the total amount of criminal fine and fee (3) restructure the criminal fine and fee collection revenue distributed to state and local governments process. totaled nearly $2 billion. As shown in Figure 3, the Background Figure 3 Collection of Criminal Half of Fine and Fee Revenue Distributed to the State Fines and Fees. Upon 2013-14 conviction of a criminal offense (including traffic State Trial Court Counties Operations violations), individuals Total: $2 Billion are typically required by the court to pay various fines and fees as part of their punishment. The State Trial Court total amount owed by an Construction individual consists of a base fine specified in statute for each criminal offense, as Cities well as various additional Other State Programs charges (such as other fines, Collection Programsa fees, forfeitures, penalty surcharges, assessments, and a Split between courts (state government) and counties (local government) depending on restitution orders). Collection who is actually collecting delinquent payments. programs—operated by www.lao.ca.gov Legislative Analyst’s Office 5 2016-17 BUDGET state received a little over $1 billion (or roughly annual revenues—and some have become insolvent. half) of this revenue. Of this amount, a little Figure 4 lists the 11 state funds facing shortfalls, less than two-thirds went to support trial court including 6 that are currently insolvent. As shown operations and construction. The remainder in the figure, the state has adopted a number supported various other state programs, such as of short-term solutions in recent years to help victim-witness assistance, peace officer training, address the shortfalls facing some of these funds. and the state’s DNA laboratory. Additionally, in These actions include: (1) requiring programs to accordance with state law, collection programs make expenditure reductions, (2) generating more received $114 million (or 6 percent) for certain revenue, and (3) shifting costs to the General Fund operational costs related to the collection of or other state funds. delinquent payments. Finally, local governments For example, the Legislature enacted an received the remaining $820 million (or 18-month traffic amnesty program last year to 42 percent) in distributed revenue. Of this amount, increase revenues to address the insolvency of $657 million (or 80 percent) went to the counties. two funds—the Peace Officers Training Fund Funds Facing Persistent Operational (POTF) and the Corrections Training Fund (CTF). Shortfalls From Declines in Fine and Fee Revenue. The amnesty program reduces the debt owed for According to available data, the total amount qualifying traffic offenses if individuals pay the of fine and fee revenue distributed to state and reduced amount in full or enroll in a payment plan. local governments has declined since 2010-11. All revenues from the program are to be distributed As a result, a number of state funds receiving in accordance with state law except for the portion such revenue have been in operational shortfall deposited into the State Penalty Fund (SPF). Instead for years—meaning annual expenditures exceed of distributing revenues from the SPF to nine state Figure 4 Summary of State Funds Facing Shortfalls Related to Declines in Criminal Fine and Fee Revenue Short-Term Solutions Proposed or Adopted Reduce Increase Shift Costs to Shift Costs to Fund Expenditures Revenues General Fund Other Funds Currently Insolvent Corrections Training Fund x x — x Improvement and Modernization Funda x — x — Peace Officers Training Fund x x x x Traumatic Brain Injury Fund — — — x Trial Court Trust Funda — — x — Victim-Witness Assistance Fund — — — x Facing Immediate Insolvency DNA Identification Fund x x x — Driver Training Penalty Assessment Fund x — — — Potentially Insolvent in Future Immediate and Critical Needs Accounta x — — — Restitution Fund x — — — State Court Facilities Construction Funda — — — — a Judicial branch special fund. 6 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET funds as required under state law, all revenues from • Cash Flow Loans. The Governor’s budget the amnesty program will instead be distributed proposes budget bill language to authorize only to the POTF and CTF. short-term cash flow loans from the General Fund to POTF and CTF related to Governor’s Proposals the 18-month amnesty program enacted last year. These loans are intended to be The Governor’s budget includes various used to cover revenue shortfalls in the proposals to address operational shortfalls from event that there is a delay in the receipt declines in criminal fine and fee revenue. The of revenues from the amnesty program. Governor’s proposals address all of the funds However, if amnesty revenues come in that are listed as currently insolvent or facing below expectations, these loans could immediate insolvency in Figure 4. (As discussed effectively shift additional costs to the below, the budget does not address those funds that General Fund. could potentially become insolvent in the future.) Specifically, the administration proposes the LAO Assessment following actions: The Governor’s budget takes positive steps • Expenditure Reductions. The Governor’s towards preventing funds from becoming insolvent budget proposes reducing expenditures due to the decline in criminal fine and fee revenue. from CTF by $490,000 and from the DNA However, the budget only includes short-term Identification Fund by $6 million. The solutions to address a continuing problem. Without budget proposes provisional language to broader changes to the overall fine and fee system, allow the Department of Finance to increase the state will likely need to repeatedly identify and expenditures from the DNA Identification implement short-term solutions in future years. Fund to the extent more revenues are deposited into the fund than currently Governor’s Proposals Provide Only estimated. Additionally, due to a decline Short-Term, Partial Solutions in revenue to the Driver Training Penalty Assessment Fund, the Governor’s budget The Governor’s budget only provides proposes to reduce the amount transferred short-term solutions to address the ongoing from the fund to POTF by $3 million. problem of declining fine and fee revenue. For example, the budget proposes shifting nearly • Cost Shifts. The Governor’s budget $31 million in costs from various funds to the proposes to shift nearly $31 million in costs General Fund—which does not address their from various funds that receive fine and fee revenue to the General Fund. Specifically, ongoing solvency. Moreover, the Governor’s the budget proposes to shift costs of proposals only help address some of the state funds $13 million from POTF, $9 million from that are facing shortfalls or insolvency. The budget the Trial Court Trust Fund, and $9 million does not have proposals for other funds that will from the Improvement and Modernization be facing shortfalls or insolvency in the future. For Fund (IMF). The budget also shifts about example, according to judicial branch estimates, $4 million in costs from the Victim- absent any expenditure reductions, the State Witness Assistance Fund and $360,000 Court Facilities Construction Fund is estimated in costs from the Traumatic Brain Injury to become insolvent in 2022-23 with a projected Fund to other special funds. www.lao.ca.gov Legislative Analyst’s Office 7 2016-17 BUDGET deficit of $29.5 million. This deficit would continue for programs to collect debt in a cost-effective to grow and would reach $540 million by the end of manner or to maximize the total amount of debt the judicial branch’s forecast period in 2037-38. they collect as well as a lack of complete, consistent, and accurate reporting on how programs collect Improvements Needed to Overall debt to allow for comprehensive evaluations of Fine and Fee System program performance. The key shortcoming of the Governor’s LAO Recommendations proposals is that they fail to address the structural problems with the fine and fee system. These issues The Governor’s proposed short-term solutions are described in two reports on the fine and fee address the operational shortfalls and fund system that we have released over the past couple of insolvency in the near-term. Given that these funds years. have been facing financial difficulty for years, the In our January 2016 report, Improving Legislature has few options beyond approving California’s Criminal Fine and Fee System, we the Governor’s proposals. However, the proposed identified four major problems with how fines budget fails to provide longer-lasting solutions. and fees are assessed and distributed. First, For example, the administration’s approach to we found that the existing system distributes addressing the POTF insolvency has forced the fine and fee revenue based on various statutory Legislature to identify and implement short-term formulas, making it difficult for the Legislature to solutions for the fund annually since 2014-15. Thus, control how such revenue is used. This is because we recommend the Legislature focus on addressing the current formula-based system limits the the systemic problems with the state’s criminal information available to guide legislative decisions, fine and fee system we identified above by taking a makes it difficult for the Legislature to reprioritize number of actions to improve the overall system. the use of such revenue, and allows administering Improve Overall Fine and Fee System. To entities to maintain significant control over the use address the systemic problems with the state’s of funds. Second, the existing system distributes criminal fine and fee system, we recommend that revenue in a manner that is not generally based the Legislature improve the state’s process for on program need—thereby resulting in programs assessing and distributing criminal fine and fee receiving more or less funding than needed. Third, revenue, as outlined in our January 2016 report. the complexity of the existing system makes it Specifically, we recommend: difficult for collection programs to accurately • Reevaluating Overall Structure of System. distribute fine and fee revenue. Finally, a lack First, we recommend that the Legislature of complete and accurate data on fine and fee reevaluate the overall structure of the collections and distributions makes it difficult for fine and fee system to ensure the system the Legislature to conduct fiscal oversight. is consistent with its goals. As part of Additionally, in our November 2014 report, this process, the Legislature will want to Restructuring the Court-Ordered Debt Collection determine the specific goals of the system, whether ability to pay should be incorporated Process, we identified a number of weaknesses into the system, what should be the in the fine and fee collection process. These consequences for failing to pay, and whether weaknesses included a lack of clear fiscal incentives fines and fees should be regularly adjusted. 8 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET • Increase Legislative Control Over Fine desired level, irrespective of fluctuations in fine and and Fee Revenue. Second, we recommend fee revenue. We provide two examples below. the Legislature increase its control over • IMF. As discussed above, the Governor the use of criminal fine and fee revenue proposes shifting about $9 million in to ensure that its uses are in line with costs from the IMF to the General Fund legislative priorities by (1) requiring in order to help the IMF remain solvent. that most criminal fine and fee revenue Specifically, these are costs related to the be deposited in the state General Fund, Phoenix project, which is the judicial (2) consolidating most fines and fees into a branch’s statewide financial system. single, statewide charge, (3) evaluating the Under our recommended changes, the existing programs supported by fine and IMF would no longer receive fine and fee revenues, and (4) mitigating the impacts fee revenue based on existing statutory of potential changes to the fine and fee formulas. Instead, these revenues would system on local governments. be deposited in the General Fund. In To complement these recommended changes addition, the Legislature would review the to the assessment and distribution of criminal programs currently supported by the IMF fine and fee revenue, we also recommend that to determine whether they merit support the Legislature restructure the criminal fine relative to other General Fund priorities. Those that are determined to be a priority and fee collection process by implementing the would receive whatever level of General recommendations outlined in our November Fund support the Legislature determined 2014 report. In particular, we recommend was appropriate. For programs that the (1) implementing a pilot program that would Legislature does not feel are a priority provide collection programs with an incentive for support, it could either (1) eliminate to maximize the amount of debt they collect in the program or (2) seek alternative fund a cost-effective manner and (2) improving data sources. For example, it could require the collection and measurements of performance. Such trial courts to pay for the Phoenix project a restructuring would maximize the amount of from the Trial Court Trust Fund. revenue available for deposit into the General Fund. • POTF and CTF. Currently, the This would help mitigate any potential impacts Commission on Peace Officers Standards from continued or further declines in fine and fee and Training (POST) and the Standards revenue. and Training for Local Corrections Improving System Would Eliminate Need Program in BSCC receive funding from to Repeatedly Identify Short-Term Funding POTF and CTF respectively. Under Solutions. Our recommendations for improving our approach, POST and BSCC would the overall structure of the fine and fee system no longer be supported by fine and fee focuses on structural, ongoing changes that revenue. Instead, the Legislature would eliminate the need to repeatedly identify short-term first determine whether these programs solutions to address shortfalls and insolvency merit General Fund support. To the extent in funds supported by fines and fees. Instead, the Legislature decided to fund these the Legislature would provide those programs it programs, it would then direct POST believes are statewide priorities with the funding and BSCC to provide it with information to help assess how much General Fund level it believes is necessary to deliver services at a www.lao.ca.gov Legislative Analyst’s Office 9 2016-17 BUDGET support is appropriate. For example, the reducing local law enforcement training Legislature could direct both programs costs, such as by identifying unnecessary and their stakeholders (such as local law or low-priority training for potential enforcement) to report on options for elimination. CALIFORNIA DEPARTMENT OF CORRECTIONS AND REHABILITATION Overview 1 percent, from the revised 2015-16 spending level. This increase reflects higher costs related The CDCR is responsible for the incarceration to (1) various proposals to expand rehabilitation of adult felons, including the provision of programs (2) debt-service payments on lease training, education, and health care services. As revenue bonds issued for prison construction, and of February 3, 2016, CDCR housed about 127,000 (3) inmate population-related adjustments. This adult inmates in the state’s prison system. Most additional spending is partially offset by (1) reduced of these inmates are housed in the state’s 35 spending for contract beds, (2) savings from the prisons and 43 conservation camps. About 9,000 conversion of segregated housing units to general inmates are housed in either in-state or out-of-state population housing units, and (3) reductions in the contracted prisons. The department also supervises parolee population. and treats about 44,000 adult parolees and is responsible for the apprehension of those parolees Adult Prison Population who commit new offenses or parole violations. In Projected to Increase Slightly addition, about 700 juvenile offenders are housed in and Parolee Population facilities operated by CDCR’s Division of Juvenile Projected to Decline Justice, which includes three facilities and one LAO Bottom Line. We withhold conservation camp. recommendation on the administration’s adult The Governor’s budget proposes total population funding request until the May Revision. expenditures of $10.5 billion ($10.3 billion Figure 5 General Fund) for CDCR Total Expenditures for the operations in 2016-17. California Department of Corrections and Rehabilitation Figure 5 shows the total (Dollars in Millions) operating expenditures Change From 2015-16 2014-15 2015-16 2016-17 estimated in the Actual Estimated Proposed Amount Percent Governor’s budget for the Prisons $8,956 $9,138 $9,278 $140 2% current year and proposed Adult parole 450 554 554 — — for the budget year. As Administration 461 473 473 — — Juvenile 173 186 188 2 1 the figure indicates, institutions the proposed spending Board of Parole 37 44 48 4 10 level is an increase of Hearings Totals $10,077 $10,395 $10,540 $145 1% $145 million, or about 10 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET However, we recommend that the Legislature as inmates housed in contract facilities and sex direct CDCR to provide it with estimates of savings offenders on parole). from the delayed activation of the infill facility at As can be seen in Figure 6, the administration R.J. Donovan prison no later than the April 1 so proposes a net decrease of $700,000 in the current that these adjustments can be incorporated into the year and a net increase of $14.1 million in the department’s budget. budget year. The current-year net decrease in costs is primarily due to a projected decline in Background the department’s utilization of contract beds. The average daily prison population is These savings are mostly offset by costs related to projected to be about 128,800 inmates in 2016-17, a projected increase in the number of inmates in an increase of about 1,200 inmates (1 percent) from state operated prisons. The budget-year net increase the estimated current-year level. This increase is in costs is largely related to (1) adjustments to primarily due to the fact that CDCR is projecting a health care staff and (2) a projected increase in the slight increase in the number of inmates sentenced number of inmates in state operated prisons. These to prison by the courts. The average daily parole increases are partly offset by a projected reduction population is projected to be about 42,600 in in the utilization of contract beds. 2016-17, a decrease of about 1,400 parolees Adjustments Do Not Reflect (3 percent) from the estimated current-year level. Delayed Infill Activation This decrease is due to a decline in the number of individuals being paroled after being resentenced The 2015-16 Budget Act included $14.6 million under Proposition 47. for the activation of a new infill facility at R.J. Donovan prison in San Diego based on an Governor’s Proposal assumption that the facility would be opened in As part of the Governor’s January budget February 2016. The department indicates that due to proposal each year, the administration requests construction delays the activation will now occur in modifications to CDCR’s Figure 6 budget based on projected Governor’s Population-Related Proposals changes in the prison and parole populations in the (Dollars in Millions) current and budget years. 2015-16 2016-17 The administration then Population Assumptions adjusts these requests Prison Population—2015‑16 Budget Act 129,581 129,581 Prison Population—Governor’s 2016-17 budget 127,681 128,834 each spring as part of Prison Population Adjustments -1,900 -747 the May Revision based Parole Population—2015‑16 Budget Act 45,047 45,047 on updated projections Parole Population—Governor’s 2016-17 budget 43,960 42,571 of these populations. Parole Population Adjustments -1,087 -2,476 The adjustments are Budget Adjustments made both on the Health care staffing $1.0 $25.6 Inmate related 2.2 15.5 overall population of Contract bed -3.4 -27.1 offenders and various Other -0.5 0.1 subpopulations (such Proposed Budget Adjustments -$0.7 $14.1 www.lao.ca.gov Legislative Analyst’s Office 11 2016-17 BUDGET May 2016. This should reduce workload for CDCR in Background 2015-16 as the department will need the correctional Federal Court Orders Prison Population Cap. officers that will be assigned to the prison for three In recent years, the state has been under a federal fewer months than previously assumed. However, court order to reduce overcrowding in the 34 state the administration’s requested budget for CDCR prisons operated by CDCR. Specifically, the court does not reflect any savings from such workload found that prison overcrowding was the primary reductions. We note that the department informs reason the state was unable to provide inmates us that it has placed a freeze on hiring custody staff with constitutionally adequate health care and for the facility and that it is currently developing an ordered the state to reduce its prison population estimate of the resulting savings. to 137.5 percent of design capacity by February 28, 2016. (Design capacity generally refers to the LAO Recommendation number of beds CDCR would operate if it housed We withhold recommendation on the only one inmate per cell and did not use temporary administration’s adult population funding beds, such as housing inmates in gyms. Inmates request until the May Revision. We will continue housed in contract facilities or fire camps are not to monitor CDCR’s populations and make counted toward the overcrowding limit. For more recommendations based on the administration’s information regarding the federal court-ordered revised population projections and budget population cap, please see our report, The 2014-15 adjustments included in the May Revision. Budget: Administration’s Response to Prison However, we recommend that the Legislature Overcrowding Order.) direct the department to provide it with estimates CDCR Has Maintained Buffer to Avoid of savings from the delayed activation of the Exceeding Population Cap. The court also infill facility at R.J. Donovan prison no later appointed a compliance officer. If the prison than the April 1 so that these adjustments can be population exceeds the population cap at any incorporated into the department’s budget. point in time, the compliance officer is authorized Plans for Complying With to order the release of the number of inmates Court-Ordered Population Cap required to meet the cap. In order to ensure that such releases do not occur if the prison population LAO Bottom Line. We recommend that the increases unexpectedly, CDCR has intentionally Legislature approve the administration’s requested reduced the prison population below the court- extension of authority to procure contract beds as required cap by thousands of inmates. This gap it is very likely that the administration will need between the number of inmates CDCR is allowed to continue utilizing contract beds over the next to house in its 34 prisons and the number it several years in order to maintain compliance with actually houses acts as a “buffer” against the the prison population cap. We also recommend population cap. that the Legislature direct the administration to Prison Population Currently Below Cap. As of close the California Rehabilitation Center (CRC) January 2016, the inmate population in the state’s in Norco because its capacity is not necessarily prisons was about 900 inmates below the February needed to comply with the federal court-ordered 2016 cap. However, this buffer is expected to grow prison population cap and its closure would result substantially with the activation of three new infill in significant ongoing General Fund savings. facilities that will add about 2,400 beds in the 12 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET spring of 2016, capable of holding 3,300 inmates (SB 105, Steinberg) authorized CDCR to enter into if crowded to 137.5 percent of design capacity. contracts to secure a sufficient amount of inmate The court has not yet determined how it will housing to meet the court-ordered population cap count this new capacity towards calculating the and to avoid the early release of inmates which prison population cap. For example, it is not clear might otherwise be necessary to comply with the whether the court would consider the new cap to order. This authority is currently set to expire on be 3,300 inmates higher as soon as these facilities December 31, 2016. The administration proposes are activated, or if it would not do so until these extending the authority to December 31, 2020. The facilities are actually filled with inmates. However, Governor’s budget includes $259 million from the we assume the court will count these beds in General Fund to maintain about 9,000 contract the same way it has counted additional capacity beds in 2016-17. (This does not include about 2,400 from the activation of the California Health Care beds at California City prison which is leased Facility in Stockton. Accordingly, we assume from a private provider but staffed and operated these 2,400 beds would allow CDCR to house an by CDCR.) This represents a decrease of about additional 3,300 inmates in the state’s 34 prisons 8 percent from the revised current-year funding as soon as they are activated. As we discuss below, level of $283 million for about 10,000 contract beds. the Governor’s budget projects that the state will As mentioned above, inmates housed in contract maintain compliance with the court-ordered beds are not counted towards the population cap. population cap throughout 2016-17. Budget Assumes Continuing Operation of CRC. The administration’s plan for reorganizing Administration’s Plan to Comply CDCR following the 2011 realignment of adult With Prison Population Cap offenders called for the closure of CRC by 2015, The Governor’s proposed budget for CDCR due to its age and deteriorating infrastructure. assumes a total inmate population of about 128,800 However, Chapter 310 authorized the continued in 2016-17 and proposes to house about 112,900 of operation of CRC because it was determined that these inmates in the state’s 34 prisons and about the capacity would be needed to comply with the 15,900 of these inmates outside of the 34 prisons population cap. The prison has a design capacity (such as in contract facilities and fire camps). of about 2,500 (allowing the state to house 3,400 Given the design capacity of the 34 prisons, the inmates at the overcrowding limit of 137.5 percent) department could house up to 117,000 inmates in and currently houses about 2,900 inmates. As state prisons under the court order. Accordingly, part of the 2015-16 Budget Act, the Legislature the Governor’s proposed budget for CDCR would required the administration to provide an updated provide sufficient prison capacity to maintain an comprehensive plan for the state prison system, average buffer of about 4,100 inmates in 2016-17. including a permanent solution to the decaying The administration’s plan relies on two key infrastructure at CRC. The administration’s plan proposals to achieve a buffer of this size: (1) the states that closing CRC is a priority but that the utilization of contract prison beds and (2) the capacity will be needed for the next few years in continued operation of CRC. These proposals are order to maintain compliance with the prison described below. population cap. The Governor’s budget includes Proposed Extension of Authority to Procure $6 million for special repairs at CRC to address Contract Bed Capacity. Chapter 310 of 2013 some of the prison’s most critical infrastructure www.lao.ca.gov Legislative Analyst’s Office 13 2016-17 BUDGET needs (such as improvements to electrical and Administration Has Not Provided Permanent plumbing systems). Plan for CRC. In our view, a permanent solution for CRC would require either (1) a timeline for LAO Assessment closing the institution or (2) a comprehensive list of Our analysis indicates that the administration’s the major infrastructure deficiencies at the prison, plan would likely maintain compliance with the a timeline for completing the projects needed prison population cap for the next several years. to remedy such deficiencies to keep the prison However, we find that the plan (1) provides more open, and the estimated cost of doing so. The prison capacity than necessary and (2) does not administration has provided neither. Moreover, the provide a permanent solution for the decaying administration’s proposal for special repair funding infrastructure at CRC, as required by the for CRC appears to be wholly insufficient to meet Legislature. the needs of the institution. The amount of funding Plan Would Likely Result in Ongoing needed to fully address infrastructure needs at Compliance With Population Cap. As shown in CRC is unknown but we estimate that it could be Figure 7, the administration’s plan would maintain a couple hundred million dollars. Assuming lease compliance through 2019-20 under CDCR’s current revenue bonds are used to finance these costs, we population projections. This assumes that the estimate the state would incur around $15 million department maintains the same level of contract annually in debt-service payments. As such, the bed capacity in future years as in 2016-17. $6 million proposed by the administration for special repairs at CRC Figure 7 is only a small fraction CDCR Projected to Maintain Compliance With Prison Population Capa of the true need and represents little more than a partial, 118,000 temporary solution to 116,000 the problem. Administration’s 114,000 Plan Would Result 112,000 in Excessive, 110,000 Costly Buffer. As 108,000 discussed above, Prison Population Limit the administration’s 106,000 Projected Prison Population proposed budget for 104,000 CDCR in 2016-17 102,000 would maintain an average buffer of 100,000 2016-17 2017-18 2018-19 2019-20 about 4,100 inmates a Excludes inmates housed outside 34 state prisons (such as in contract beds) because they are in 2016-17. We not counted towards the cap. acknowledge that CDCR = California Department of Corrections and Rehabilitation. some buffer is needed to avoid violating 14 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET the court order if the inmate population increases Reduce Prison Capacity by Closing CRC. unexpectedly. However, based on our analysis of We recommend that the Legislature direct CDCR historical population fluctuations, we find that the to reduce its prison capacity in order to achieve administration could maintain a much smaller a reduced buffer of 2,250 in 2016-17. We further buffer—about 2,250 inmates—without substantially recommend that the Legislature direct the increasing the risk of violating the prison population department to achieve this capacity reduction by cap. We note that CDCR has previously indicated closing CRC. As shown in Figure 8, we estimate that it believes a buffer in the range of 2,000 to 2,500 this approach would eventually achieve net savings would be an appropriate ongoing level. of roughly $131 million annually relative to the Accordingly, it appears that CDCR could Governor’s proposed approach. These savings are reduce its prison capacity in 2016-17 by almost achieved primarily from reduced costs to operate a couple thousand beds. It could do so by either CRC but also include reduced debt service from (1) reducing its utilization of contract beds or avoided capital outlay costs that we estimate would (2) reducing capacity within its 34 prisons, such need to be invested in order to keep CRC open as by closing housing units or an entire prison. permanently. These savings would be somewhat Maintaining the buffer at the level proposed by offset by increased costs for contract beds needed the administration would come at a significant to replace a portion of the capacity lost from cost relative to alternative approaches. This is the closure of CRC. We also recommend that because the department saves about $18,000 the Legislature reject the Governor’s proposed annually by taking an inmate out of a contract augmentation of $6 million for special repairs at bed and placing the inmate in one of the state’s CRC as these repairs would be unnecessary if CRC prisons. Alternatively, the state could achieve even is closed. greater savings—as much as $59,000 annually per We note that it would likely take at least a year inmate—by consolidating these inmate reductions before CRC could be closed. As such, the above and closing an entire state prison. savings would likely not be realized until at least 2017-18. In addition, it is possible that closing CRC LAO Recommendation could actually increase costs somewhat during the Approve Extension of Contract Bed Authority. period when CRC is being closed. This is because We recommend that the Legislature approve the Figure 8 administration’s requested Closing CRC Would Save $131 Million extension of authority to Relative to Governor’s Approach procure contract beds. 2017-18 Fiscal Year (Dollars in Millions) It is very likely that the Governor’s LAO administration will need Approach Recommendation to continue utilizing Status of CRC Open Closed contract beds over the next Contract beds 10,300 11,852 Surplus prison capacity (or “buffer”)a 4,123 2,250 several years in order to Annual Savings maintain compliance with Relative to Governor’s Plan — $131 the prison population cap. a Assumes administration maintains 2016-17 buffer. CRC = California Rehabilitation Center. www.lao.ca.gov Legislative Analyst’s Office 15 2016-17 BUDGET the department may need to replace some of the for random drug testing of 10 percent of inmates per lost capacity from closing CRC by increasing its use month at all 34 state prisons and the California City of contract beds. The precise fiscal effect of closing prison, which are all operated by CDCR. (We note CRC in the short term is unknown and would that CDCR had redirected resources in 2013-14 to depend primarily on (1) how the court adjusts begin random drug testing 10 percent of the inmate the prison population cap during the time that population each month beginning January 2014. CRC is being shut down and (2) how quickly the As such, the department had already established a department is able to achieve operational savings baseline of drug usage prior to the start of the pilot.) at CRC as it reduces the prison’s population. At The remaining amount was used to implement most, we estimate that closing CRC could result in enhanced interdiction strategies at 11 institutions, increased costs in the low tens of millions of dollars with 8 prisons receiving a “moderate” level of in 2016-17. In the long term, CDCR would likely interdiction and 3 prisons receiving an “intensive” need to procure additional contract beds because level. According to CDCR, each of the moderate it is projecting that the inmate population will institutions received the following: (1) at least two increase by a couple thousand by 2019-20. We also (and in some cases three) canine drug detection note that to the extent the Legislature prioritizes teams; (2) two ion scanners to detect drugs possessed reducing contract beds over closing CRC, it could by inmates, staff, or visitors; (3) X-ray machines for still achieve a portion of the above savings—about scanning inmate mail, packages, and property as $33 million in 2016-17 relative to the Governor’s well as the property of staff and visitors entering approach—by directing the department to reduce the prison; and (4) one drug interdiction officer. In its buffer to 2,250 inmates by reducing its use of addition to the above resources, each of the intensive contract beds. institutions received: (1) one additional canine team, (2) one additional ion scanner, (3) one full body Drug Interdiction scanner at each entrance and one full body X-ray LAO Bottom Line. We recommend that the scanner for inmates, and (4) video cameras to surveil Legislature, approve the extension of random inmate visiting rooms. In 2015, the Legislature drug testing for one additional year because passed legislation requiring the department to the program has allowed CDCR to identify evaluate the pilot drug testing and interdiction more inmates using illegal drugs, but reject the program within two years of its implementation. remainder of the Governor’s proposal to extend the Governor’s Proposal pilot drug interdiction program due to the lack of conclusive evidence at this time regarding program Increased Funding to Extend and Expand effectiveness. Pilot Program. The Governor’s budget for 2016-17 requests $7.9 million in one-time funding from Background the General Fund and 51 positions to extend the Two-Year Pilot Program Initiated in 2014-15. enhanced drug interdiction pilot program for The Legislature provided CDCR with $5.2 million an additional year, as well as expand the level (General Fund) in both 2014-15 and 2015-16 to of services provided through the pilot program. implement a two-year pilot program intended to According to CDCR, the continuation of the reduce the amount of drugs and contraband in state existing pilot program for one more year would prisons. Of this amount, $750,000 annually was used allow the department to collect additional data to 16 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET analyze its effectiveness. In addition, CDCR intends and lockdowns associated with the prison drug to expand certain interdiction efforts to (1) increase trade. Although a comprehensive analysis of the the frequency of random screening of staff and pilot program is not yet available, preliminary visitors at intensive interdiction prisons and data suggest the pilot has not achieved the desired (2) lease three additional full body X-ray machines outcomes. Specifically, the data suggests: to screen visitors. The department states that these • Drug Use Appears on the Rise. As additional resources are necessary to assess the shown in Figure 9, data provided by efficacy of increased screening. CDCR indicate that the overall statewide The department has indicated that it intends percentage of positive and refused tests to issue a preliminary evaluation report on the increased from 5.3 percent in the six pilot program but has not provided an estimate months preceding the implementation of of when that report will be released. In addition, the interdiction strategies to 6.7 percent in the first six months of the pilot. (Refused the department intends to issue a final evaluation tests are likely an indication that an inmate report in the spring of 2017. has been using drugs.) The largest increase LAO Assessment occurred at the prisons which received the most intensive interdiction. The percent of Interdiction Efforts Do Not Appear to Be positive or refused tests also increased in Effective. According to CDCR, the goals of its the second six months of the pilot overall drug interdiction efforts are to (1) reduce inmate at prisons receiving moderate interdiction drug use and (2) increase institutional security in resources. While there was a decline at various ways, such as by reducing inmate violence intensive prisons between the first and Figure 9 Inmate Drug Use Appears on the Rise Percentage of Inmates Testing Positive or Refusing Drug Tests 16% Six Months Preceding Interdiction Activities (January to June 2014) 14 First Six Months of Interdiction Activities (July to December 2014) 12 Second Six Months of Interdiction Activities (January to June 2015) 10 8 6 4 2 Overall Intensive Interdiction Prisons Moderate Interdiction Regular Prisons (35 Prisons) (3 Prisons) Prisons (8 Prisons) (24 Prisons) www.lao.ca.gov Legislative Analyst’s Office 17 2016-17 BUDGET second six month period of the pilot, the Drug Testing Appears to Have Some Benefit. percent of positive or refused tests still Data provided by CDCR suggest that random remained above that of the six months drug testing has increased the rate at which the preceding the pilot. department is identifying inmates who are using illegal drugs. This increased rate of identification • Institutional Security Improvements May Not Be Attributable to Interdiction should allow the department to better target Efforts. Data provided by CDCR indicate inmates who are in need of substance abuse that the number of violent incidents in treatment. In addition, it is possible that the prison (such as assaults on staff and other random drug testing is deterring some inmates inmates) declined by about 4 percent from from using drugs. However, further analysis is 2013-14 to 2014-15 (the first year of the drug needed to determine whether this is the case. interdiction pilot). However, as shown in Figure 10, most of this decline occurred LAO Recommendations in prisons without enhanced interdiction. Approve Temporary Extension of Drug Prisons which were part of the pilot actually Testing. We recommend that the Legislature saw an increase in violence. In addition, approve the portion of this request—$750,000 from data provided by CDCR indicate that the General Fund—associated with continuing the lockdowns decreased overall from 2013-14 random drug testing for one additional year. The to 2014-15 but that the decline in prisons drug testing program appears to have increased without enhanced interdiction (45 percent) the rate at which CDCR is identifying inmates was greater than the decline in prisons with enhanced interdiction (36 percent). who use illegal drugs. In addition, the collection Figure 10 Violent Incidences on the Rise at Pilot Prisons Average Violent Incidents Per Prison 180 2013-14 160 2014-15 140 120 100 80 60 40 20 Intensive Interdiction Prisons Moderate Interdiction Prisons Regular Prisons (3 Prisons) (8 Prisons) (24 Prisons) 18 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET of additional drug test results should help the placements for inmates who, for a variety of department to assess whether the removal of drug reasons, constitute a threat to the security interdiction resources, as we recommend below, of the institution or the safety of staff and affects the rate of drug use in prisons. Based on inmates. Typically, ASUs house inmates who participate in prison violence or the result of the department’s final evaluation, commit other offenses in prison. the Legislature could determine whether to permanently extend the drug testing program. • Security Housing Units (SHUs). SHUs Reject Remainder of Proposal to Extend are used to house for an extended period Drug Interdiction Pilot Program. We recommend inmates who CDCR considers to be the that the Legislature reject the remainder of the greatest threat to the safety and security of Governor’s proposal to extend and expand the drug the institution. Historically, department interdiction pilot program. Extending the program regulations have allowed two types of inmates to be housed in SHUs: (1) inmates now would be premature given that (1) preliminary sentenced to determinate SHU terms for data suggest that it is not achieving its intended committing serious offenses in prison (such outcomes and (2) CDCR has not yet fully evaluated as assault or possession of a weapon) and its effectiveness. We also recommend that the (2) inmates sentenced to indeterminate Legislature direct the department to accelerate SHU terms because they have been its timeline for evaluating the program so that identified as prison gang members. (As it is completed in time to inform legislative discussed below, changes were recently deliberations on the 2017-18 budget, such as made to CDCR’s regulations as a result of a whether any of the interdiction strategies should be legal settlement.) permanently adopted. Segregated housing units are typically more Housing Unit Conversions expensive to operate than general population housing units. This is because, unlike the general LAO Bottom Line. We recommend that the population, inmates in segregated housing units Legislature reject the administration’s proposal for receive their meals and medication in their cells, $5.8 million to fund increased staffing for CDCR’s which requires additional staff. In addition, custody Investigative Services Unit (ISU) from savings staff are required to escort inmates in segregated related to segregated housing unit conversions. This housing when they are temporarily removed from is because the proposal lacks sufficient workload their cells, such as for a medical appointment. justification, particularly in light of recent declines In 2015, CDCR settled a class action lawsuit, in other ISU workload. known as Ashker v. Brown, related to the department’s use of segregated housing. The terms Background of the settlement include significant changes to Segregated Housing Units. CDCR currently many aspects of CDCR’s segregated housing unit operates different types of celled segregated policies. For example, inmates can no longer housing units that are used to hold inmates be placed in the SHU simply because they are separate from the general prison population. These gang members. Instead, inmates can only be segregated housing units include: placed in the SHU if they are convicted of one of • Administrative Segregation Units (ASUs). the specified SHU-eligible offenses following a ASUs are intended to be temporary www.lao.ca.gov Legislative Analyst’s Office 19 2016-17 BUDGET disciplinary due process hearing. In addition, the the activities of gang members released to the department will no longer impose indeterminate general population. The department is requesting SHU sentences. The department has also made 22 of the proposed positions be approved on a changes to allow inmates to transition from two-year, limited-term basis because it has not yet segregated housing (including SHUs and ASUs) to determined the exact amount of ongoing workload the general population more quickly than before. associated with the segregated housing policy Investigative Services Unit. The CDCR changes. currently operates an ISU consisting of Need for Additional ISU Staff Not Justified 263 correctional officer positions located across the 35 state-operated prisons. Correctional officers Proposed ISU Staffing Increase Lacks Detailed who are assigned to the ISU receive specialized Workload Analysis. While we acknowledge training in investigation practices. These staff are that the new segregated housing policies may responsible for various investigative functions such drive some increased workload for the ISU, the as monitoring the activities of prison gangs and department has not established a clear nexus investigating assaults on inmates and staff. between the policy changes and the increased workload. In particular, the department has Governor’s Proposal been unable to provide a detailed analysis which The Governor’s budget proposes to reduce indicates the specific workload increases that will General Fund support for CDCR by $16 million in result from the policy changes and how it was 2015-16 and by $28 million in 2016-17 to account determined that 48 is the correct number of staff for savings from a reduction in the number of to handle this increased workload. Without this inmates housed in segregated housing units. information it is difficult for the Legislature to According to the department, the policy changes it assess the need for the requested positions. is implementing pursuant to the Ashker settlement Other Factors Have Impacted ISU Workload will reduce the number of inmates held in ASUs and in Recent Years. There are a variety of factors that SHUs, allowing it to convert several of these units drive workload for the ISU, such as the number to less expensive general population housing units. of violent incidences occurring in the prisons. For example, CDCR estimates that the number It appears that a couple of these key factors have of inmates held in SHUs could decline by around declined in recent years. First, the number of 1,000, or about one-third of the current population. inmates in CDCR-operated prisons has decreased In addition, the administration proposes from about 124,000 in 2012-13 to a projected level $5.8 million to increase the number of staff in the of about 117,000 in 2015-16. Second, the number of ISU, which would offset the above 2016-17 savings. assaults on inmates and staff has decreased from The redirected funding would support the addition about 8,500 in 2012-13 to about 1,200 in 2014-15. of 48 correctional officers to the ISU, an increase of Accordingly, the ISU now has fewer inmates to 18 percent. According to the administration, these monitor and fewer assaults to investigate relative to positions are needed to handle workload from an 2012-13. Despite these developments, correctional anticipated increase in gang activity related to the officer staffing for the ISU has actually increased new segregated housing policies required by the slightly from 253 officers in 2012-13 to 263 officers Ashker settlement. Specifically, the department in 2014-15. This raises the question of whether plans to use the additional positions to monitor any increased workload for the ISU resulting 20 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET from segregated housing policy is offset by other commit a violent crime, and (4) had not attempted workload decreases in recent years—meaning to escape from custody within the last ten years. that potential workload increases could be The Legislature enacted subsequent legislation accommodated with existing resources. which (1) excluded male inmates from the program and (2) amended the criminal history eligibility LAO Recommendation requirements. Specifically, Chapter 41 of 2012 We recommend that the Legislature reject the (SB 1021, Committee on Budget and Fiscal Review) administration’s proposal for $5.8 million to fund allowed female inmates with prior serious or violent increased staffing for the ISU because the proposal crimes to participate in the program. (Inmates lacks sufficient workload justification, particularly with current offenses for such crimes were still in light of recent declines in other ISU workload. excluded.) Statute does not specify how much of their sentence inmates must complete in order to Alternative Custody Programs be eligible for ACP, but CDCR’s current regulations LAO Bottom Line. We recommend that the require that program participants must be within Legislature withhold action on the Governor’s two years of their scheduled release date. proposal to reduce the length of the alternative EACP. In 2014, a federal court ordered CDCR custody programs pending additional information to expand the ACP in order to reduce prison to determine whether the proposed change is overcrowding. In response, the department created warranted. the EACP. The EACP is similar to the ACP except that (1) inmates who have a current serious or Background violent offense are eligible and (2) participants As we discuss below, CDCR currently are required to reside in one of three designated maintains two programs for certain inmates residential treatment facilities located in San Diego, to serve the remainder of their sentence in an Sante Fe Springs, and Bakersfield. alternative custody setting—the Alternative In 2015, a federal court found that the state was Custody Program (ACP) and the Enhanced unlawfully discriminating against male inmates by Alternative Custody Program (EACP). excluding them from the ACP and ordered CDCR ACP. Chapter 644 of 2010 (SB 1266, Lieu) to make male inmates eligible for the program. This created the ACP to allow certain inmates to court order did not apply to the EACP. be released from prison early and serve the Governor’s Proposal remainder of their sentences in the community in a private residence or residential treatment The Governor’s budget includes three proposals facility under the supervision of a state parole related to the department’s alternative custody agent. The program was initially intended to programs: serve (1) female inmates, (2) pregnant inmates, • Expand EACP. The Governor’s budget and (3) inmates who were primary caretakers of proposes a $390,000 General Fund dependent children prior to their incarceration. augmentation to expand female Eligibility was limited to inmates who (1) had no participation in EACP by 72 beds (36 beds current or prior serious or violent crimes, (2) had at each of the existing facilities in San no current or prior registerable sex offenses, Diego and Sante Fe Springs). This would (3) had not been assessed as posing a high risk to expand the total program capacity to 311. www.lao.ca.gov Legislative Analyst’s Office 21 2016-17 BUDGET • Extend ACP Eligibility to Male Offenders. offenders currently spend in the alternative custody The Governor’s budget proposes programs and how many female inmates could $3.3 million from the General Fund and be affected by the change. Without the above 20 positions in 2015-16 to extend eligibility information it is difficult for the Legislature to for the ACP to male inmates. Under the determine whether a reduction in the length of the proposal, these levels would increase to alternative custody programs is appropriate. $6 million and 40 positions beginning in 2016-17. According to the administration LAO Recommendation these resources are needed to (1) review Withhold Action. In view of the above, we applications from inmates to determine recommend that the Legislature withhold action eligibility, (2) develop rehabilitation on the Governor’s proposal to reduce the length plans for eligible inmates, and (3) notify of the alternative custody programs pending stakeholders (such as local law enforcement and victims) when inmates are scheduled additional information to determine whether for early release. the proposed change is warranted. Accordingly, we also recommend that the Legislature direct • Reduce Program Duration From Two the department to report at budget hearings on Years to One. The administration also (1) why it believes the male ACP would operate proposes to reduce the length of time more effectively as a one-year program and (2) its inmates can participate in both the ACP assessment of the impact of reducing the program and EACP from within two years of their length on female offenders. scheduled release date to within one year from being released. While we find that the Governor’s proposal to expand the ACP and the EACP are aligned LAO Assessment with recent court decisions, we recommend the Legislature hold off on approving the expansion Proposals to Expand EACP and ACP Align pending resolution on the proposed change to With Court Orders . . . The Governor’s proposals program duration as a different level of funding to expand the EACP and allow male inmates to may be required if program length is not reduced participate in the ACP appear to be aligned with to one year. As part of the above report, CDCR recent court orders. For example, as discussed should also provide information on the fiscal effects above, the federal court recently ordered CDCR to (relative to the Governor’s budget) of maintaining make male inmates eligible for the ACP. the current length of the program at two years. . . . But Proposed Reduction in Program Length Not Justified. CDCR has not provided a Programs and Services for rationale for why the alternative custody programs Long-Term Offenders would operate more effectively as one-year LAO Bottom Line. We recommend that the programs rather than as two-year programs. Nor Legislature approve a portion of the proposal that has the department fully evaluated the potential increases rehabilitative programming opportunities impact on the female alternative custody programs for higher-risk offenders and reject the remainder that would occur from the reduction in length. of the proposal that would exclusively target For example, the administration has been unable long-term offenders. Research suggests that to provide data on the average time that female programs targeting higher-risk offenders are likely 22 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET to achieve better outcomes than those targeting In addition, CDCR offers various other long-term offenders. rehabilitative programs that are generally available to inmates and parolees, including long-term Background offenders. The current year budget allocates about Long-term offenders are individuals who $450 million for these programs, which include have been sentenced to a life term in prison with education, substance use disorder treatment, and the possibility of parole, with the Board of Parole cognitive behavioral therapy. As we discuss below, Hearings (BPH) making the determination the Governor proposes expanding some of these whether parole is ultimately granted. As a result of programs including: an increase in the rate at which BPH grants parole • Parole Service Centers (PSCs). PSCs in recent years, the number of long-term offenders are located throughout the state and granted parole increased from 541 in 2009 to 902 provide residency, employment, and other in 2014. According to the department, due to the support services to parolees. The CDCR nature of their commitment offenses, long-term currently has 136 beds in PSCs dedicated offenders spend a significant amount of time in to long-term offenders. The current-year prison and thus may have challenges adjusting to budget for PSCs is $12 million. life outside of prison. In order to alleviate these • Transitions Program. The Transitions challenges, CDCR has established rehabilitative Program utilizes contract providers to programs that specifically target long-term provide various life and job skills training offenders: to help offenders transition back into their • Long-Term Offender Program (LTOP). The communities. Under the program, which LTOP provides rehabilitative programming is located at 13 prisons, all inmates— (such as substance use disorder treatment, including long-term offenders—are anger management, and employment eligible to participate if they (1) have been readiness) on a voluntary basis to long-term assessed as a moderate-to-high risk to offenders at three state prisons—Central reoffend, (2) have been assessed as having California Women’s Facility in Chowchilla, a moderate-to-high need for employment California Men’s Colony in San Luis training services, and (3) have between Obispo, and California State Prison, five weeks and six months left on their Solano. sentence. The current-year budget for the Transitions Program is $3.2 million. • Offender Mentorship Certification Program (OMCP). The OMCP trains • Community College Programs. long-term offenders as substance use Chapter 695 of 2014 (SB 1391, Hancock) disorder counselors while they are required CDCR to enter into an incarcerated. Upon graduation from interagency agreement with California the training program, participants are Community Colleges to expand employed by CDCR to deliver counseling community college courses offered in services to their fellow inmates. There are prisons. Under this program, CDCR currently two sessions offered annually, provides classroom space and equipment, allowing up to 64 offenders to be certified while the community colleges provide staff, as mentors each year. faculty, and volunteers to teach the courses. There are currently 14 community colleges www.lao.ca.gov Legislative Analyst’s Office 23 2016-17 BUDGET offering courses to around 7,500 inmates. beds dedicated to long-term offenders— According to CDCR, 38 percent of inmates from 136 beds to 272 beds. currently enrolled in the college programs • Transitions Program ($3.1 Million). The are long-term offenders. budget proposes $3.1 million to expand the Transitions Program to the remaining Governor’s Proposal 21 state prisons that currently do not offer The Governor’s budget for 2016-17 proposes the program. In addition, the department a $10.5 million General Fund augmentation for proposes to terminate its existing contracts CDCR to expand the availability of programs for and instead hire 53 civil service teachers to long-term offenders. The proposed augmentation deliver services. According to CDCR, this would increase to $13.5 million in 2017-18 and modification would help prisons address challenges they have faced procuring $16.2 million in 2018-19, as shown in Figure 11. The contract providers for the program. proposal includes both the expansion of existing programs and the establishment of new programs • Community College Programs ($480,000). for long-term offenders. As we discuss below, while The budget proposes $480,000 to support some of the programs specifically target long-term overtime for custody staff to monitor offenders, other programs target a broader range inmates participating in community of offenders. The proposed $10.5 million increase college courses. in 2016-17 would be allocated for the following • OMCP ($423,000). The budget proposes programs: $423,000 to double the number of • LTOP ($3.4 Million). The budget proposes (1) annual OMCP training sessions from $3.4 million to expand the LTOP to a two to four and (2) potential annual fourth prison yet to be determined. Of this program graduates from 64 to 128. amount, $2.1 million is one-time funding As shown in the figure, the proposed for the installation of modular space for the $10.5 million augmentation would increase in program and $1.3 million would support 2017-18 and 2018-19. Part of this increase would ongoing administrative costs. support the establishment of a new Transitional • PSCs ($3.1 Million). The budget proposes Housing Program for long-term offenders while $3.1 million to double the number of PSC they are on parole. The requested funding would allow CDCR to contract Figure 11 for residency and Governor’s Long-Term Offender Proposal rehabilitative services for (In Millions) 400 long-term offenders upon full implementation. Program 2016-17 2017-18 2018-19 Long-Term Offender Program $3.4 $1.3 $1.3 LAO Assessment Parole Service Centers 3.1 3.1 3.1 Transitions Program 3.1 3.1 3.1 Targeting Higher-Risk Community College Program 0.5 0.5 0.5 Offenders Yields Greater Offender Mentor Certification Program 0.4 0.4 0.4 Transitional Housing Program — 5.1 7.8 Public Safety Benefits. Totals $10.5 $13.5 $16.2 Research shows that 24 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET programs designed to reduce recidivism are most Many Higher-Risk Offenders Not Currently effective when they target offenders who have been Receiving Needed Treatment. Currently, many assessed as a moderate-to-high risk to reoffend. inmates who have been assessed as a moderate- This is because lower-risk offenders are much less to-high risk to reoffend do not receive rehabilitative likely to reoffend irrespective of whether they programming. For example, in 2014-15, 44 percent receive programming, resulting in little public of such offenders were released without having any safety benefits. Long-term offenders are typically of their rehabilitative needs met, despite having considered lower-risk offenders compared to been assessed as having a need for programming. the general population. This is because they are This is in large part due to limited resources. (1) subject to an exhaustive review by BPH and are Given that most of the Governor’s proposal targets not granted release if they are deemed to pose a long-term offenders, it will do little to meet the high risk to reoffend and (2) are on average older needs of higher-risk offenders. than most inmates who are released. Research has LAO Recommendations demonstrated that as offenders age they become less likely to commit crimes. Approve Proposed Expansion of Programming Only Portion of Proposed Funding Targets for Higher-Risk Offenders. We recommend Higher-Risk Offenders. Since most of the increased that the Legislature approve the portion of the funding proposed by the Governor would support proposal—totaling $4 million—that would expand programs that specifically target long-term rehabilitative programming opportunities for offenders—which tend to be of lower risk—only a higher-risk offenders that are consistent with small portion of the funds would be available to programs shown to be cost-effective methods for help support higher-risk offenders. Specifically, reducing recidivism. Specifically, we recommend we find that three of the programs proposed for providing the requested funding to support (1) the augmentation would increase programming expansion of the OMCP, (2) the expansion and opportunities for higher-risk offenders. These modification of the Transitions Program, and include: (1) the expansion of the OMCP, (2) the (3) custody overtime needed to operate community expansion and modification of the Transitions college programs. Program, and (3) custody overtime needed to Reject Remainder of Proposal. We recommend support community college programs. We also that the Legislature reject the remainder of the note that these programs incorporate best practices Governor’s proposal to expand programs for that have been demonstrated through research to long-term offenders. While we acknowledge that be cost-effective strategies for reducing recidivism, these programs may provide some benefit to such as targeting rehabilitative needs including long-term offenders, research suggests that the substance abuse treatment and job training. While department could achieve greater benefits to public the OMCP trains only long-term offenders as safety by instead targeting higher-risk offenders. counselors, it increases programming opportunities To the extent that the Legislature is interested in for other inmates because the counselors are further expanding rehabilitative programming, employed by CDCR to deliver substance abuse we recommend that it direct the department to treatment disorder counseling to their peers. come back with a proposal that targets higher-risk offenders and reduces the number of such offenders www.lao.ca.gov Legislative Analyst’s Office 25 2016-17 BUDGET who are released from prison without receiving Governor’s Proposal any programming targeted toward their identified The Governor’s budget proposes $32 million needs. (General Fund) in 2016-17 and $34 million Male Community in 2017-18 to expand the MCRP. The 2016-17 Reentry Program appropriation includes $20 million to support existing contracts and $12 million to expand the LAO Bottom Line. We recommend that program. The proposed augmentation would allow the Legislature reject the Governor’s proposed CDCR to contract with four additional facilities— $32 million General Fund augmentation for the three in Los Angeles County and one in San Diego Male Community Reentry Program (MCRP), as it County—to provide an additional 460 beds. In is unlikely to be the most cost-effective recidivism addition, CDCR proposes to increase the amount reduction strategy given that it (1) does not target of time participants can spend in the program from higher-risk offenders and (2) it is very costly. To 120 days to 180 days. According to the department, the extent that the Legislature wants to expand this will help increase the amount of treatment rehabilitative programming, we recommend received in the program and expand the pool of directing the department to come back with a eligible participants. proposal that focuses on meeting the rehabilitative needs of higher-risk offenders. Proposal Unlikely to Be Most Cost-Effective Approach for Reducing Recidivism Background The MCRP is a relatively new program and The 2014-15 Budget Act included $20 million in its effectiveness at reducing recidivism has not one-time funding from the Recidivism Reduction been evaluated. However, given that the current Fund (RRF) for CDCR to establish the MCRP. program does not target higher-risk offenders and (The RRF was supported by savings resulting is relatively expensive, we find that the program is from the underutilization of funding provided unlikely to be the most cost-effective approach to in 2013-14 for contract beds.) Under the MCRP, reduce recidivism. CDCR contracts with residential facilities in the Program Does Not Target Higher-Risk community to provide rehabilitative programming Offenders. As discussed earlier in this report, (such as educational services, substance use research has shown that rehabilitative programs disorder treatment, job training, and computer are generally more effective at reducing recidivism skills workshops) to male inmates who are if they target offenders who have been assessed within 120 days of completing their sentence. as having a moderate-to-high risk to reoffend. The program is voluntary and generally admits However, CDCR does not target higher-risk inmates on a first-come, first-serve basis if they offenders for admission to the MCRP and instead meet certain criteria (such as not posing an escape admits inmates into the program on a first-come, risk). Currently, CDCR contracts with three first-serve basis regardless of their risk level. Data facilities—one each in Los Angeles, Kern, and provided by the department indicate that over Butte Counties—to provide a total of 220 beds at one-fifth of MCRP participants are considered an average annual cost of about $58,000 per bed low risk. This suggests the program is not being (including contract and administrative costs). operated in a manner that would maximize reductions in recidivism. The fact that a significant 26 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET proportion of the MCRP capacity is being used must demonstrate that it can provide a sustainable for low-risk offenders is particularly concerning constitutional level of care. given that many higher-risk offenders are being Process for Delegating Responsibility to released from prison without having any of their State. In March 2015, the Plata court issued an rehabilitative needs met. order outlining the process for transitioning Program Is Very Costly. Even if the MCRP responsibility for inmate medical care back to were shown to be effective in terms of reducing the state. Under the order, responsibility for each recidivism, it is a relatively expensive program. institution, as well as overall statewide management Research suggests that there are a variety of of inmate medical care, must be delegated back programs—such as substance use disorder treatment to the state. The court indicates that, once these and academic education—that could reduce separate delegations have occurred and CDCR has recidivism at a much lower cost. Accordingly, been able to maintain the quality of care for one it appears unlikely that the MCRP is the most year, the Receivership would end. cost-effective approach for reducing recidivism. The federal court order outlines a specific process for delegating care at each institution LAO Recommendation back to the state. Specifically, each institution Reject Funding Proposed for MCRP. We must first be inspected by the Office of the recommend that the Legislature reject the Inspector General (OIG) to determine whether administration’s proposed funding for the the institution is delivering an adequate level of MCRP. The program is unlikely to be the most care. The Receiver then uses the results of the cost-effective approach to reduce recidivism given OIG inspection—regardless of whether the OIG that it (1) currently does not target higher-risk declared the institution adequate or inadequate— offenders and (2) is very costly. To the extent the along with other health care indicators, including Legislature is interested in further expanding those published on each institution’s Health Care rehabilitative programming, we recommend that it Services Dashboard, to determine whether the direct the department to come back with a proposal level of care is sufficient to be delegated back to that targets higher-risk offenders. CDCR. To date, the OIG has completed inspections for nine institutions and has found six to be Federal Receiver for adequate. As of February 1, 2016, the Receiver has Inmate Medical Services only delegated care at Folsom State Prison back to CDCR. The Receiver is currently in the process of Overview determining whether to delegate care at the five Receiver Appointed to Improve Medical Care. institutions that have been found adequate by the In 2006, after finding the state failed to provide OIG. In addition, the Receiver could also delegate a constitutional level of medical care to prison care at the three prisons deemed inadequate by inmates, the federal court in the Plata v. Brown case the OIG if care has been found to have improved. appointed a Receiver to take control over the direct The OIG plans to complete medical inspections management of the state’s prison medical care for the remaining institutions by the end of 2016. delivery system from CDCR. In order for CDCR to The process for delegating the responsibility for regain control over the direct management of the headquarters functions related to medical care state’s prison medical care delivery system, the state (such as procurement of medical vehicles) does not www.lao.ca.gov Legislative Analyst’s Office 27 2016-17 BUDGET require an OIG inspection. Under the court order, manner, our analysis indicates that the need for the Receiver only has to determine that CDCR can each of the eight sister institutions to have its adequately carry out these functions. own executive management team has not been justified. For example, three of the four sister Supervisory Staffing Model for institutions that have completed OIG inspections Correctional Medical Care have been found to be delivering an adequate level LAO Bottom Line. We recommend that the of care. While the remaining four institutions Legislature reject the Governor’s proposal to have yet to complete audits, it appears likely that provide a $6 million augmentation in 2016-17 some will be found adequate by the OIG based to provide for a separate executive management on the performance data available through the team at each institution, as such separate teams Health Care Services Dashboard. For example, do not appear to be necessary in order to deliver a Chuckawalla Valley State Prison (CVSP), which has constitutional level of care. already been inspected and found to be delivering Background. Insufficient health care staffing an adequate level of care, shares an executive has been one of the factors that the court in management team with Ironwood State Prison the Plata case found to be contributing to (ISP), which has not been inspected. Both CVSP unconstitutional levels of care. To address this and ISP were near or above the statewide averages problem, the Medical Classification Staffing for each metric used in the Health Care Services Model, which established standardized staffing Dashboard, suggesting that ISP will likely be ratios for health care providers, was adopted by found to be delivering an adequate level of care the state in 2014-15. While this model accounted when it is inspected. We acknowledge that an for all classifications involved in the direct care adequate designation from the OIG is not sufficient of patients, it did not specify requirements for to guarantee that care at an institution will be supervisory staff. While most institutions have delegated back to CDCR. However, it is a strong their own health care executive management indicator that delegation could occur and that teams, there are eight sister institutions—four pairs care is being delivered appropriately. As a result, of prisons that are very near to one another—that it appears that the sister institutions can deliver share health care executive management teams. an adequate level of care while sharing executive Governor’s Proposal. The Governor’s budget management teams. proposes a General Fund augmentation of Approval of the Executive Management Team $6 million and 33 additional positions in 2016-17— Proposal Is Premature. In 2016, the Receiver will which would increase to $7 million beginning likely have made determinations about whether to in 2017-18—to allow each of the eight sister delegate care for several of the sister institutions, institutions to have its own executive management including those that have already been found to team. According to the Receiver, this would be delivering adequate care by the OIG. Until such help ensure that these institutions provide an inspections and determinations are completed, constitutionally adequate level of care. approving a new supervisory staffing model Need for Each Institution to Have Own appears premature. This is because the outcomes of Executive Management Team Not Justified. While these activities will allow the Legislature to assess we recognize the need to transition control of whether requiring each institution to have its own inmate medical care back to the state in a timely executive management team is necessary. 28 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET LAO Recommendation. We recommend that the Receiver to provide additional information the Legislature reject the Governor’s request to before taking action. provide a $6 million augmentation in 2016-17 Background. The Receiver’s office is currently to allow for a separate executive management responsible for providing medical pharmaceuticals team at each institution as there is not sufficient prescribed by physicians under his management, justification that each institution needs its own as well as psychiatric and dental medications team to provide a constitutional level of care. prescribed by psychiatrists and dentists managed Depending on the outcomes of the upcoming OIG by CDCR. From 2004-05 through 2014-15, the inspections and the Receiver’s reviews to determine inmate pharmaceutical budget increased from whether to delegate care at certain institutions back $136 million to $236 million. (The pharmaceutical to the state, the Legislature could consider a more budget reflects only the cost of pharmaceuticals targeted request as part of the 2017-18 budget. and not the cost of medication distribution or management.) As shown in Figure 12, the level of Augmentation for Inmate Pharmaceuticals spending on pharmaceuticals per inmate has also LAO Bottom Line. We recommend that increased over this time period, increasing from the Legislature approve increases to the inmate $860 in 2004-05 to $2,000 by 2014-15—an increase pharmaceutical budget based on estimated of over 130 percent. projections for the pharmaceutical Consumer Price Increases in the inmate pharmaceutical budget Index (CPI) in 2015-16 and 2016-17, rather than can occur for several reasons, such as additional based on past-year changes as proposed by the inmates needing prescription drugs and increases Governor. In order to determine the appropriate in the rate at which inmates are prescribed drugs. adjustments, we recommend the Legislature require Moreover, we note that pharmaceutical costs Figure 12 Pharmaceutical Expenditures Per Inmate $2,500 2,000 1,500 1,000 500 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 Revised Proposed www.lao.ca.gov Legislative Analyst’s Office 29 2016-17 BUDGET generally rise at a faster pace than inflation. For years, until a more reliable estimate can example, from 2013-14 to 2014-15, pharmaceutical be established to account for changes in costs increased 4.9 percent compared to an patient population and acuity levels. overall 1.5 percent increase in consumer prices. In • A $12 million net increase to account for addition, the introduction of new drugs can have a various other changes in pharmaceutical significant impact on overall pharmaceutical costs. spending, such as costs associated with For example, the Receiver spent $58 million on integrating pharmaceuticals into the drugs for Hepatitis C in 2014-15, most of which was Electronic Health Records System (EHRS). related to newly developed drugs capable of curing Governor’s Proposal—Budget Year. The the disease. These newly developed Hepatitis C Governor’s budget for 2016-17 proposes to drugs can cost around $85,000 per treatment spend $246.4 million from the General Fund for regimen. This was the single most important inmate pharmaceuticals. This is a net increase factor in the large increase in expenditures per of $6.8 million, or 3 percent from the proposed inmate illustrated in the above figure. Recognizing revised level of current-year spending, resulting the uncertainty associated with pharmaceutical from the following adjustments: cost growth, the size and acuity of the patient • A $7.9 million increase to account population, and the potential cost savings of for general increases in the price of various programmatic changes initiated by pharmaceuticals, based on a 4.9 percent the Receiver, the Legislature has provided only increase in the pharmaceutical CPI from limited-term augmentations (typically for one to 2013-14 to 2014-15. three years) to support inmate pharmaceutical • A $1.1 million decrease largely related costs. For example, the enacted 2013-14 budget to savings from the integration of included a total of $178 million for inmate pharmaceutical management with the pharmaceuticals. Of this amount, $51 million was EHRS referenced above. provided on a limited-term basis. Using Projections Rather Than Past Governor’s Proposal—Current Year. The Expenditures Would Improve CPI-Based Approach. Governor’s revised budget for 2015-16 reflects a An independently verified source to determine how total of $239.6 million in General Fund support for pharmaceutical prices have changed, or are likely the Receiver’s inmate pharmaceutical budget. This to change, in the future is an appropriate method to is a net increase of $20 million, or 9 percent, from use when determining whether adjustments in the the 2015-16 Budget Act, based on the following pharmaceutical budget are necessary. Accordingly, adjustments: using the pharmaceutical CPI for estimating future • An $8 million increase based on an increases in pharmaceutical costs seems reasonable. estimated 4.9 percent increase in the However, as indicated above, the Receiver proposes price of these drugs. This 4.9 percent using past-year changes in the pharmaceutical increase is equivalent to the percent change in the CPI for pharmaceuticals CPI to estimate future-year changes, rather from 2013-14 to 2014-15. The Receiver than relying on available projections of how the proposes to temporarily use past-year pharmaceutical CPI is actually expected to change. changes in the pharmaceutical CPI to Using pharmaceutical CPI projections is preferable adjust the pharmaceutical budget in future as it may account for changes in the market that are 30 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET not reflected in the past-year values of the index. For central chiller system at Ironwood State Prison example, pharmaceutical CPI projections for 2015-16 (ISP) by $275,000 to reflect savings available from and 2016-17 are lower than the 4.9 percent growth eliminating maintenance on the pre-existing assumed by the Receiver. Specifically, projections of cooling system. the pharmaceutical CPI suggest that prices will only Background. The 2014-15 Budget Act increase by 3.8 percent in 2015-16 and by 3.3 percent included $145 million from the Public Buildings in 2016-17. Accordingly, these projections suggest Construction Fund to (1) install a central chiller that the pharmaceutical budget requires $1.7 million heating, ventilation, and air conditioning (HVAC) less than proposed by the Governor in 2015-16 and unit at ISP and (2) repair damages to roofs and $4.3 million less in 2016-17. other infrastructure caused by the failure of the LAO Recommendation. In view of the above, existing swamp cooler system, which had been in a we recommend that the Legislature approve state of disrepair for several years. increases to the inmate pharmaceutical budget Governor’s Proposal. The Governor’s budget based on projections for the pharmaceutical proposes $524,000 from the General Fund for five CPI in 2015-16 and 2016-17. However, in order stationary engineer positions to maintain the new to determine the appropriate adjustments, we central chiller HVAC system at ISP. recommend the Legislature hold off on taking Savings Available to Offset HVAC such action until the Receiver provides additional Maintenance Costs. According to previous information. Specifically, the Receiver should estimates by CDCR, the department has spent provide by April 1 (1) an updated estimate of about $275,000 annually to maintain the existing current-year monthly pharmaceutical expenditures swamp cooler system at ISP. These costs will go and (2) an updated estimate of the pharmaceutical away with the installation of the new central CPI for the remainder of the current-year and the chiller HVAC unit. However, the department’s budget-year based on the most recent projections request does not reflect that these savings would be available. available to offset the cost of the maintenance of the new central chiller system. Ironwood State Prison LAO Recommendation. In view of the above, Maintenance Staff we recommend that the Legislature reduce the LAO Bottom Line. We recommend that the Governor’s request by $275,000 to reflect the Legislature reduce the Governor’s proposal to offsetting maintenance savings from removing the provide $524,000 for maintenance of the new swamp cooler system. JUDICIAL BRANCH Overview of accusations of legal violations. The branch consists of statewide courts (the Supreme Court Judicial Branch Budget. The judicial branch and Courts of Appeal), trial courts in each of is responsible for the interpretation of law, the the state’s 58 counties, and statewide entities of protection of individuals’ rights, the orderly the branch (the Judicial Council, Judicial Branch settlement of all legal disputes, and the adjudication Facility Program, and the Habeas Corpus Resource www.lao.ca.gov Legislative Analyst’s Office 31 2016-17 BUDGET Center). The branch receives revenues from several amount for 2015-16. (These totals do not include funding sources including the state General Fund, expenditures from local revenues or trial court civil filing fees, criminal penalties and fines, county reserves.) maintenance-of-effort payments, and federal $20 Million Augmentation for grants. Trial Court Operations Figure 13 shows total funding for the judicial branch from 2012-13 through 2016-17. Total LAO Bottom Line. We recommend that funding for the judicial branch has steadily the Legislature reject the Governor’s proposal increased since 2012-13—the most recent year in to provide a $20 million General Fund base which the judicial branch received a significant augmentation for trial court operations, due to reduction in General Fund support—and is insufficient justification for the augmentation, proposed to increase in 2016-17 to $3.8 billion. Of particularly given that the proposed budget already the total budget proposed for the judicial branch provides additional funding to support increased in 2016-17, about $1.7 billion is from the General workload and costs to trial courts. Fund—nearly 45 percent of the total judicial branch Background. Since 2013-14, the Legislature budget. This is a net increase of $104 million, or has provided trial courts with General Fund 6.5 percent, from the 2015-16 amount. base augmentations for their operations totaling As shown in Figure 14, the Governor’s budget $236 million—$60 million in 2013-14, $86 million proposes $3.6 billion from all state funds to in 2014-15, and $90 million in 2015-16. The support the judicial branch in 2016-17, an increase amounts provided in 2014-15 and 2015-16 were of $175 million, or 5 percent, above the revised part of a two-year funding plan approved by Figure 13 Total Judicial Branch Funding (In Billions) $4 Local Revenues Other Funds General Fund 3 2 1 2012-13 2013-14 2014-15 2015-16 2016-17 (Estimated) (Projected) 32 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET the Legislature to provide the trial courts with a meeting the identified needs that it believes merits 5 percent increase in operations funding each year. funding. Moreover, it is unknown what needs were The trial courts generally had full discretion in how met by most of the additional funds provided in they used these augmentations. recent years, which makes it even more difficult to Governor’s Proposal. The Governor’s budget determine what unmet needs the courts continue includes a total of $72 million in additional to have and how these needs align with legislative funding to support identified workload and cost priorities. increases to the judicial branch. Specifically, this Proposed Budget Already Accounts for includes funding for (1) workload changes (such as Increased Workload and Costs. To the extent related to the implementation of Proposition 47), that the proposed $20 million augmentation is (2) increased costs (such as increased trial court intended to support increased workload and health benefit and retirement costs), and (3) the costs, as we noted above, the Governor’s budget expansion of specific services (such as expanding already includes a number of proposals to provide court interpreter services). In addition, the additional funding to support identified workload Governor’s budget proposes a $20 million (or and cost increases for the trial courts. Given these 1 percent) General Fund base augmentation for proposed funding increases, it is even less clear why trial court operations. Similar to prior years, trial the proposed $20 million in resources is needed for courts would have full discretion in the use of these trial court operations. funds. Recommend Rejecting Proposed Insufficient Justification for Augmentation. Augmentation. Absent sufficient information to The administration has not provided sufficient justify the proposed $20 million augmentation, information to justify why the trial courts need we recommend that the Legislature reject the the proposed $20 million augmentation. For Governor’s proposal. example, it is unclear what specific needs at the New Court Innovations trial courts are not currently being met that Grant Program necessitate an augmentation. Thus, it is difficult for the Legislature to determine whether the proposed LAO Bottom Line. We recommend that the $20 million increase is too much or too little for Legislature withhold action on the Governor’s Figure 14 Judicial Branch Budget Summary—All State Fundsa (Dollars in Millions) Change From 2015-16 2014-15 2015-16 2016-17 Actual Estimated Proposed Amount Percent State Trial Courts $2,538 $2,675 $2,805 $130 4.9% Supreme Court 43 47 46 — -0.2 Courts of Appeal 211 219 225 6 2.5 Judicial Council 134 134 133 -1 -0.8 Judicial Branch Facility Program 320 370 410 40 10.8 Habeas Corpus Resource Center 13 15 15 — 3.4 Totals $3,260 $3,459 $3,634 $175 5.1% a Does not include offset of trial court expenditures from excess local property taxes. www.lao.ca.gov Legislative Analyst’s Office 33 2016-17 BUDGET proposal to provide $30 million in one-time funding would be funded, why they are needed, how much from the General Fund for trial and appellate funding is needed to support them, and which court innovation, modernization, and efficiency courts will pilot these programs and services. projects, pending additional information from the The administration has also not provided specific administration and judicial branch (such as the information on how the programs and services specific programs and services that would be funded). to be funded compare to previously tested or To the extent that such information is not provided, implemented projects, as well as what specific we recommend the Legislature reject the proposal. performance outcomes would be measured to Governor’s Proposal. The Governor’s budget determine program effectiveness. The lack of key proposes $30 million in one-time General Fund information about the proposal generally reflects support to create a new Court Innovations Grant the fact that Judicial Council would have significant Program. The proposed program, which would be discretion over the types of programs and services developed and administered by Judicial Council, that would receive funding. For example, the would provide grants on a competitive basis to administration’s proposal provides little guidance support trial and appellate court programs and on how grants should be awarded—thereby practices that promote innovation, modernization, allowing Judicial Council to decide whether certain and efficiency. Grants would be two to three years types of applicants have priority and what metrics in duration and could be awarded up until 2019-20. should be used to evaluate applications. Grant funds could be encumbered through This lack of detail makes it difficult for the 2019-20, after which any unexpended funds would Legislature to determine whether the Governor’s revert to the state General Fund. proposal is the appropriate level of funding for According to the administration, courts those projects that are aligned with legislative would be required to describe how grant funds priorities. Additionally, because the proposal are to be used to support the development of lacks details that would specify and standardize sustainable, ongoing programs and practices that how performance outcomes would be measured, can be adopted and replicated by other courts. the Legislature may have difficulty comparing Participating programs will also be required to the programs and services that are funded to provide measurable results, outcomes, or benefits determine which provide the greatest benefit to to demonstrate the impact of the program on the courts or members of the public. Moreover, the lack court and the public. Finally, Judicial Council of detail makes it difficult to determine the extent would be required to provide the Department to which these programs could be duplicated across of Finance and the Joint Legislative Budget the state. This is particularly problematic if the Committee with annual reports on the grant judicial branch decides to seek ongoing funding for program beginning on September 30, 2017. such programs or services in the future. Proposal Lacks Key Information. The Recommend Withholding Action on Proposed Governor’s proposal to promote innovation Augmentation. We recommend the Legislature and efficiency projects in trial and appellate withhold action on the Governor’s proposal to courts has merit as such projects can ultimately provide $30 million for a new Court Innovations generate savings or improve access to court Grant Program, pending additional information services. However, the proposal provides very from the administration and the judicial branch. little information on what programs and services Specifically, we recommend the Legislature require 34 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET the administration and the judicial branch to ICNA, established by Chapter 311. The measure report by April 1 on the following: (1) which also specified that the Judicial Council was also specific programs and services would be funded, prohibited from approving projects that could not be (2) why they are needed, (3) how much funding fully financed with the revenue from fines and fees. is needed to support each service and program, In accordance with the legislation, the Judicial (4) which courts would pilot each service and Council selected 41 construction projects to be program, (5) what specific performance outcomes funded from ICNA that were deemed to be of would be measured to determine program “immediate” or “critical” need for replacement, effectiveness, and (6) how the judicial branch would generally due to the structural, safety, or capacity determine whether these programs and services shortcomings of the existing facilities. As shown can be implemented across the state. Based on in Figure 15 (see next page), due to significant this information, the Legislature would be able reductions in the total amount of revenue available to determine which programs it would like to in ICNA, the Judicial Council chose to cancel specifically fund on a pilot basis. To the extent that 4 projects (replacing 2 with renovation projects) such information is not provided, we recommend and indefinitely delay 11 projects until sufficient the Legislature reject the proposal. resources are available. Of the remaining 26 projects, 10 projects have completed construction or are Judicial Branch Facility currently in construction. Another eight projects Construction Proposals are authorized to begin construction pending LAO Bottom Line. We recommend that the the sale of lease revenue bonds or are seeking Legislature withhold action on the Governor’s authority to enter into the construction phase. proposal for increased spending from the The remaining eight projects are currently in the Immediate and Critical Needs Account (ICNA) middle of preconstruction activities, such as project for court construction projects pending a report design. The construction of the above projects will from Judicial Council in budget hearings on how generally be paid for through lease revenue bonds it would ensure monies would be available to fully with the debt-service payments coming from ICNA. fund the proposed projects. We also recommend ICNA currently receives roughly $250 million in the Legislature adopt supplemental reporting revenue annually. (We would note that annual language requiring the Judicial Council to submit funding to ICNA has declined over the past few a plan by January 10, 2017 for addressing the years due to reductions in criminal and civil fines long-term solvency of ICNA within existing and fees.) The fund currently supports about financial resources. $230 million in various commitments on an annual basis. These include: (1) roughly $100 million in Background debt-service costs on previously approved projects, Immediate and Critical Needs Account. (2) $25 million for facility modification projects, Chapter 311 of 2008 (SB 1407, Perata) authorized (3) $50 million for trial court operations to mitigate increases in criminal and civil fines and fees to the impact of prior-year budget reductions, and finance up to $5 billion in trial court construction (4) roughly $55 million for service payments for projects and other facility-related expenses such the Long Beach courthouse, which grow annually as modifications of existing courthouses. The and result from financing the courthouse through a revenue from the fines and fees are deposited into public-private partnership. www.lao.ca.gov Legislative Analyst’s Office 35 2016-17 BUDGET Figure 15 Status of ICNA Projects As of January 2016 Canceled (4 Projects) Complete (6 Projects) Los Angeles—Lancaster Courthousea Butte—North Butte County (Chico) Courthouse Los Angeles—Mental Health Courthouseb Kings—Hanford Courthouse Alpine—Markleeville Courthouse San Joaquin—Juvenile Justice Center Sierra—Downieville Courthouse Solano—Fairfield Old Solano Courthouse Sutter—Yuba City Courthouse Indefinitely Delayed (11 Projects) Yolo—Woodland Courthouse Fresno—County Courthouse In Construction (4 Projects) Kern—Delano Courthouse Kern—Mojave Courthouse Alameda—East County Courthouse Los Angeles—Glendale Courthouse Merced—Los Banos Courthouse Los Angeles—Santa Clarita Courthouse San Diego—Central San Diego Courthouse Los Angeles—Southeast Los Angeles Courthouse Santa Clara—Family Justice Center Monterey—South Monterey County Courthouse Nevada—Nevada City Courthouse Authorized to Begin Construction Pending Placer—Tahoe Area Courthouse Lease Revenue Bond Sale (4 Projects) Plumas—Quincy Courthouse Glenn—Willows Courthouse Sacramento—Criminal Courthousec Lake—Lakeport Courthouse Siskiyou—Yreka Courthouse Tehama—Red Bluff Courthouse Requesting Authority to Enter Construction Phase (4 Projects) Imperial—El Centro Family Courthouse Riverside—Indio Juvenile and Family Courthouse Shasta—Redding Courthouse Tuolumne—Sonora Courthouse In Preconstruction Activities (5 Projects) El Dorado—Placerville Courthouse Inyo—Inyo County Courthouse Los Angeles—Eastlake Juvenile Courthouse Santa Barbara—Criminal Courthouse Sonoma—Santa Rosa Criminal Courthouse Requesting Funding for Additional a Original construction project has been cancelled, and Preconstruction Activities (3 Projects) 2016-17 budget proposes a facility modification project instead. b Original construction project has been cancelled, but was replaced Mendocino—Ukiah Courthouse with a renovation of another existing courthouse to house this facility. c One-time funding provided to complete certain preconstruction Riverside—Mid County Civil Courthouse activities only. Stanislaus—Modesto Courthouse ICNA = Immediate and Critical Needs Account. 36 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET Governor’s Proposal proceed, we estimate ICNA would be insolvent in about 15 years. The Governor’s budget includes a number of Additional Future Projects Would Speed Up court construction proposals totaling $305 million. ICNA Insolvency. According to judicial branch First, the Governor’s budget proposes a one-time estimates, if all projects that are not currently $3.5 million augmentation from ICNA for canceled or indefinitely delayed completed facility modification projects at the Antonovich construction as planned (including the above Antelope Valley Courthouse ($3.2 million) and the projects proposed by the Governor), the ICNA McCourtney Juvenile Justice Center ($300,000) operating deficit would increase further, reaching in Los Angeles County. Second, the budget also nearly $100 million by 2037-38. Under this proposes $301 million for seven other court scenario, ICNA would become insolvent even construction projects. This amount consists of earlier—by 2023-24. (1) $230 million in lease revenue bond authority for the construction of three previously approved LAO Recommendations projects (with approximately $19 million in annual Withhold Action on Governor’s Proposals debt service to be paid from ICNA), (2) $42 million for Increased ICNA Spending. Given that the in lease revenue bond authority (with about Governor’s proposals would likely result in $3.5 million in annual debt service to be paid ICNA becoming insolvent in about 15 years, we from ICNA) and nearly $2 million from ICNA for recommend that the Legislature direct Judicial construction activities for one previously approved Council to report at budget hearings this spring on project, and (3) $27 million from ICNA for design how it plans to ensure monies would be available to activities for three previously approved projects. fully fund the debt service of the proposed projects. LAO Assessment Pending its receipt and review of this report, we recommend the Legislature withhold action on the Governor’s Proposal Would Likely Result Governor’s proposals. in ICNA Becoming Insolvent. The Governor’s Direct Judicial Council to Submit a Plan proposal for $272 million in lease revenue bond Regarding Additional Future Projects. The authority to finance four previously approved judicial branch has eight courthouse projects projects commits the state to providing not included in the Governor’s proposals that approximately $23 million in annual debt-service will require construction funding in the future. payments for about 20 years after construction is Because Judicial Council should be matching complete. This would be in addition to the roughly expenditures to revenues available in ICNA under $230 million in current annual expenditures, state law, we recommend the Legislature adopt as discussed above. (The Governor’s proposal supplemental reporting language requiring the would also result in $29 million in one-time Judicial Council to submit a plan by January 10, preconstruction costs to ICNA.) Given that ICNA 2017 for addressing the long-term solvency of only receives about $250 million in revenue ICNA within existing financial resources. Such a annually, approval of these new projects would plan could include alternative financing agreements likely result in annual operating deficits in the (such as partnering with counties to finance near future. Give the current ICNA fund balance facilities), delaying projects, reducing expenditures and assuming no further projects were allowed to www.lao.ca.gov Legislative Analyst’s Office 37 2016-17 BUDGET on construction projects, or reducing expenditures additional projects, if any, should move forward on facility modification projects. The Legislature when the projects seek additional funding in future could then use this plan to help determine what budgets. DEPARTMENT OF JUSTICE Overview for the provision of health care services for most low-income persons. Until recently, Medi-Cal Under the direction of the Attorney General, eligibility was mainly restricted to low-income the Department of Justice (DOJ) provides legal families with children, seniors and persons with services to state and local entities, brings lawsuits disabilities, and pregnant women. As part of to enforce public rights, and carries out various law the federal Patient Protection and Affordable enforcement activities. For example, DOJ provides Care Act, beginning January 1, 2014, the state legal support to the various boards and bureaus of expanded Medi-Cal eligibility to include additional the Department of Consumer Affairs (DCA) for low-income populations—primarily childless adults formal discipline proceedings against licensees who did not previously qualify for the program. and investigates health provider Medi-Cal fraud DOJ Bureau of Medi-Cal Fraud and Elder and elder abuse complaints. The DOJ also collects Abuse. Federal law generally requires states criminal justice statistics from local authorities; operating Medicaid programs to establish fraud manages the statewide criminal history database; control units tasked with the investigation and and conducts background checks required for prosecution of fraud in the state’s Medicaid employment, licensing, and other purposes. program. Such units must also review complaints Fraud and Elder Abuse of abuse or neglect of patients (such as the elderly) Enforcement Enhancement in health care facilities and room and board facilities. The federal government pays 75 percent LAO Bottom Line. We recommend that the of the total cost to support the operations of such Legislature provide DOJ with $7.8 million on a fraud units up to a certain limit. The state pays the one-time basis from the Federal Trust Fund and remaining portion. the False Claims Act Fund to support 35 positions The Bureau of Medi-Cal Fraud and Elder to eliminate an existing backlog largely related to Abuse within DOJ serves as California’s Medicaid abuse and neglect cases. However, as of this time, fraud control unit. Under state law, the bureau there is insufficient information to justify the is generally responsible for fraud investigations need for these resources on an ongoing basis, as and prosecutions related to providers (such as proposed by the Governor. billing fraud and prescription drug diversion Background schemes), as well as abuse or neglect complaints. The bureau currently receives $36.7 million in Medi-Cal Program. In California, the funding—$27.5 million in federal funds and Department of Health Care Services (DHCS) $9.2 million in state funds—to handle this administers the state’s Medicaid program workload. This funding supports 205 positions (known as Medi-Cal). As a joint federal-state across five satellite offices—located in Sacramento, program, federal funds are available to the state Burbank, San Diego, Laguna Woods, and West 38 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET Covina. In 2014-15, the bureau received a total of the health and safety of individuals, we find that the 3,382 cases—2,938 related to abuse or neglect and request for positions in the budget year is reasonable. 444 related to fraud. According to DOJ, the bureau However, the department has not provided sufficient currently has a backlog of approximately 230 cases information to justify these positions on an ongoing that have been opened, but have not been assigned basis after the backlog is eliminated. For example, to an investigator. Of this amount, 93 percent are it is unclear exactly how much additional abuse related to abuse or neglect cases with the balance and neglect workload will be generated from an being related to provider fraud. DHCS handles increasing elderly population. In addition, a major investigations of fraud committed by beneficiaries reason for expanding the bureau’s capacity to pursue of the Medi-Cal program. Medi-Cal fraud cases is to generate a financial return for the state (such as from the recovery of Governor’s Proposal money paid to fraudulent providers). However, the The Governor’s budget proposes a $7.8 million department has not provided information on the augmentation ($5.9 million in federal funds and return the state can expect from the activities that $2 million from the False Claims Act Fund), to would be supported by the ongoing funding. This support 35 additional positions for the bureau, as information is critical because the Legislature will well as to lease office space for the establishment want to ensure that the returns justify the ongoing of three satellite offices in Fresno, Riverside, and resources dedicated to them. San Francisco. The requested positions include: LAO Recommendations 18 special agents, 6 investigative auditors, 5 deputy attorney generals, 3 legal secretaries, Provide One-Time Funding. We recommend 2 staff information systems analysts, and 1 office that the Legislature provide DOJ with the technician. DOJ plans to use the proposed 35 requested positions and funding for the bureau resources to first eliminate the above backlog of on a one-time basis to address the existing backlog cases beginning in 2016-17. On an ongoing basis, of cases that are largely related to abuse or neglect. the proposed resources would be used to address However, at this time, there is a lack of sufficient an anticipated increase in workload associated with information to justify the ongoing need for these an increasing elderly population and the Medi-Cal positions. To the extent that DOJ is able to provide eligibility expansion. The department also intends the Legislature with information on (1) the extent to expand its abilities to investigate and prosecute to which abuse and neglect cases will increase fraud, such as by expanding its role in fraud related and (2) the return the state can expect from to managed care providers and using data-mining expanding its capacity to pursue Medi-Cal fraud, to identify patterns of fraudulent activity. the Legislature can consider a request for ongoing funding in the future. LAO Assessment Public Protection and Resources to Address Backlog Appear Justified, Consumer Protection but Ongoing Need Unclear. As indicated above, Enforcement Initiative the proposed 35 positions are based on the level of resources DOJ believes is necessary to address LAO Bottom Line. We recommend that the the 230 case backlog in 2016-17. Since most of the Legislature reject the Governor’s proposal to backlog consists of abuse or neglect cases involving provide $1.4 million in ongoing funding from the www.lao.ca.gov Legislative Analyst’s Office 39 2016-17 BUDGET Legal Services Revolving Fund and seven positions Department of General Services. Cases are resolved for DOJ to reduce the average number of days when the board or bureau adopts a decision on the to adjudication for DCA formal discipline cases, case. because (1) average days to adjudication would DCA Initiates Improvements to Enforcement likely decline without additional positions and Process. In 2010, DCA proposed a plan, known as (2) issues unrelated to staffing could be causing the Consumer Protection Enforcement Initiative delays. We also recommend that the Legislature (CPEI), to address problems it believed limited adopt supplemental reporting language requiring the ability of its boards to resolve complaints in a DOJ to report on strategies for preparing cases for timely manner. For example, some boards took an adjudication in a timely manner. average of three years to complete the enforcement process. The CPEI proposed restructuring the Background enforcement process by making administrative Enforcement of Consumer Protection Laws. improvements (such as delegating subpoena The DCA is responsible for promoting consumer authority to board and bureau staff). In addition, protection while supporting a fair and competitive the plan called for increased staff and fiscal marketplace. Currently, DCA consists of roughly resources, and potential statutory changes. As 40 boards and bureaus—such as the Medical Board part of CPEI, DCA and its boards and bureaus set of California and the California Bureau of Real performance targets for the average number of Estate—that are responsible for regulating various days to complete each of the three main steps of the professions. One of DCA’s primary responsibilities enforcement process. While targets for individual is the enforcement of consumer protection laws steps may vary by board and bureau, the formal by disciplining licensees. The enforcement process target for the entire process is set uniformly at can vary for each of DCA’s boards and bureaus, but 540 days (or 18 months). In recent years, many generally includes three steps: intake, investigation, boards and bureaus have not been meeting the and formal discipline. First, at the intake step, 18-month target. For example, roughly two-thirds the board or bureau receives a complaint against of boards and bureaus exceeded the target in a licensee and assigns the case to an investigator. 2013-14. Of this amount, roughly 58 percent Second, at the investigation step, the board or exceeded the target by more than 200 days. bureau collects facts and determines whether Enforcement delays sometimes last for years sufficient evidence exists to pursue an action and, and allow licensees to continue working despite if so, what type of action (formal discipline or a outstanding complaints, which can compromise lesser action such as a citation and fine). Finally, consumer protection. if it is determined that there is sufficient evidence DOJ Provided Additional Positions in 2015-16 to pursue formal discipline, the board or bureau for Increased Enforcement Workload. The 2015-16 will refer such cases to DOJ for prosecution. DOJ budget includes a $2.8 million augmentation from can resolve these cases in various ways—such the Legal Services Revolving Fund, as well as nine as declining to prosecute the case or settling deputy attorney general and six legal secretary the case on behalf of the board or bureau. DOJ positions, for DOJ to address increased workload can also schedule the case for a hearing before related to formal discipline. This brought the total an administrative law judge at the Office of DOJ budget related to the formal discipline step to Administrative Hearings (OAH) within the roughly $30 million and 117 positions—including 40 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET 90 deputy attorney general positions. (We note or the OAH hearing is complete.) The Governor’s that DCA boards and bureaus reimburse DOJ for budget also proposes increased expenditure its costs through deposits into the Legal Services authority for DCA to reimburse DOJ. Revolving Fund.) At the time of this analysis, LAO Assessment three of the nine deputy attorney general positions provided in the 2015-16 budget remained unfilled. Average Days to Adjudication Would Likely Decline Without Additional Positions. Even Governor’s Proposal without receiving additional positions in 2016-17, As noted above, many DCA boards and we estimate that the average number of days to bureaus have not been meeting the 18-month target adjudication would likely decline for two reasons. for completing all three steps of the enforcement First, as shown in Figure 16, DOJ receives cases process. The Governor’s 2016-17 budget seeks to (also known as “opening the case”) each year that take steps towards meeting this goal by attempting add to its existing workload. At the same time, DOJ to speed up the third step of the process—the brings a certain number of cases to adjudication formal discipline step. Specifically, Figure 16 the Governor’s Cases Adjudicated Exceeded Cases Received in 2014-15 budget proposes a $1.4 million 6,000 augmentation from Cases Received the Legal Services Cases Adjudicated Revolving Fund, as well as five deputy 5,000 attorney general and two legal secretary positions 4,000 for DOJ, to reduce the average number of days it takes 3,000 to bring a case to adjudication. (Time to adjudication is measured as the 2,000 time from when DOJ receives the case to when DOJ 1,000 resolves the case such as by declining prosecution, the board or bureau 2010-11 2011-12 2012-13 2013-14 2014-15 settles the case, www.lao.ca.gov Legislative Analyst’s Office 41 2016-17 BUDGET each year (also known as “closing the case”). In bureaus, which can delay the enforcement process. years where the number of cases received exceeds Accordingly, the additional positions for DOJ in the number of cases adjudicated, these cases the Governor’s budget may not address key factors take longer to resolve, increasing DOJ’s average contributing to delays in the overall enforcement days to adjudication. However, in 2014-15, DOJ process. received fewer cases than it adjudicated—thereby LAO Recommendations allowing DOJ to begin to reduce the total number of unresolved cases. This likely reduced average Reject Governor’s Proposal. In view of the days to adjudication. Second, the number of cases above, we recommend that the Legislature not received annually has remained relatively constant. approve the proposed $1.4 million augmentation Assuming that DOJ attorneys each handle the same from the Legal Services Revolving Fund and number of cases, the additional positions provided seven additional positions at this time. Providing in 2015-16 should allow DOJ to adjudicate even such resources is premature given that (1) DOJ’s more cases—particularly after the three vacant average number of days to adjudication would positions are filled. This would further reduce the likely decline even without additional positions and total number of unresolved cases and average days (2) there appears to be other factors unrelated to to adjudication. DOJ staffing that could be preventing departments Issues Unrelated to Staffing Could Be Delaying from meeting the 18-month goal for completing the Overall Enforcement Process. The Governor’s overall enforcement process. proposal seeks to meet the 18-month goal for Require DOJ to Report on Workload the overall enforcement process by speeding up Strategy. In order to increase legislative oversight the formal discipline step—that is, by providing of DOJ’s handling of the formal discipline DOJ with greater resources to bring cases to step, we recommend that the Legislature adopt adjudication more quickly. We note, however, supplemental reporting language requiring DOJ to that DCA and some of its boards, OAH, and evaluate its workload and provide a plan by January DOJ have identified a number of other possible 10, 2017 for preparing cases for adjudication in reasons unrelated to DOJ staffing for the failure a more timely manner. Specifically, this report to meet the 18-month goal. For example, some should identify (1) the causes of delays in DOJ DCA boards indicated that difficulties in obtaining workload (such as the number of cases returned information necessary to complete investigations annually to specific boards/bureaus due to often caused delays in completing the second step incompleteness), (2) strategies for addressing these of the enforcement process in a timely manner. delays (which could include improved processes Departments involved in the process also noted with DCA boards/bureaus or within DOJ), and that DOJ sometimes receives incomplete cases from (3) trade-offs associated with each strategy (such as DCA and that there are often delays regarding the the need for additional resources). The Legislature scheduling of hearings by OAH, both of which will want to consider this report, along with similar impact the average time it takes to complete the information it currently requires from DCA and formal discipline step. In addition, DOJ reported OAH, to begin identifying the specific causes of certain challenges in settling some cases because delay in the enforcement process and potential it lacks clear guidance on the specific settlement solutions to address these delays. terms that will be acceptable to DCA’s boards and 42 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET LOCAL PUBLIC SAFETY County Jail Grants frequently result in inmates being transported to local medical facilities at a significant cost. LAO Bottom Line. We recommend that the Recent Funding Provided for Jail Legislature reject the Governor’s proposal to Construction. Given the impact of the 2011 provide $250 million in one-time funding from realignment on jails, the state has provided in the General Fund for jail construction, due to the recent years a total of $2.2 billion in lease revenue lack of a detailed analysis from the administration bonds to fund the construction and modernization regarding the need for additional state jail funding. of county jails. Specifically, the state has provided: Background • $1.2 billion in lease revenue bonds authorized by Chapter 7 of 2007 (AB 900, 2011 Realignment. As part of the 2011-12 Solorio) to increase housing capacity by budget package, the state enacted legislation to adding over 9,000 beds to county jails. realign to counties the responsibility for certain felony offenders. For example, certain lower-level • $500 million in lease revenue bonds felony offenders with no current or prior serious, authorized by Chapter 42 of 2012 (SB 1022, sex, or violent crimes are no longer eligible for Committee on Budget and Fiscal Review) to primarily increase program and health prison and now serve their sentences in the county care space in jails. Funds could also be used jail, in the community under the supervision of to add housing capacity. county probation departments, or a combination of the two. These changes increased the number • $500 million in lease revenue bonds of inmates coming to county jail. The average authorized by Chapter 37 of 2014 (SB 863, statewide jail population increased from about Committee on Budget and Fiscal Review) 70,000 in 2011 to about 82,000 in 2014. for the same purpose as Chapter 42. In addition, the 2011 realignment changed These jail construction grants are administered the type of offenders in jail. Prior to realignment, by the Board of State and Community Corrections jails generally held defendants awaiting trial or (BSCC). For each of the above funding allocations, arraignment and individuals sentenced to serve less Figure 17 (see next page) shows the amount that has than one year in jail. After realignment, however, been awarded at this time to each county. As shown certain felony offenders began serving all or a in the figure, jail capacity is expected to increase portion of their sentence in county jail, rather than by a total of about 10,600 beds. We note that some in state prison—typically for more than a year. projects are intended to construct or modify health Since existing jails were not generally designed care and program space rather than add bed to house long-term offenders, the longer sentences capacity. resulting from realignment create challenges Governor Proposes Additional for counties. For example, jails often have only $250 Million for County Jails limited space for rehabilitative programs that serve long-term offenders. Jails also often have The Governor’s budget for 2016-17 proposes limited medical facilities to effectively treat one-time funding of $250 million from the long-term inmates with health problems, which can General Fund for jail construction. According to www.lao.ca.gov Legislative Analyst’s Office 43 2016-17 BUDGET Figure 17 Overview of State-Funded Jail Projects (Dollars in Millions) Award Amounts Additional County AB 900 Chapter 42a Chapter 37b Total Beds Alameda — — $54 $54 — Amador — — 17 17 40 Butte — — 40 40 38 Calaveras $26 — — 26 95 Colusa — — 20 20 4 Fresno — $79 — 79 — Humboldt — — 20 20 44 Imperial 33 — — 33 228 Kern 100 — — 100 790 Kings 33 20 — 53 276 Lake — 20 — 20 79 Los Angeles 100 — — 100 1,604 Madera 31 — — 31 145 Merced — — 40 40 30 Monterey 80 — — 80 576 Napa — 13 3 16 72 Orange 100 80 — 180 896 Placer — — — 10 — Riverside 100 — — 100 897 Sacramento — 80 — 80 26 San Benito 15 — — 15 60 San Bernardino 100 — — 100 1,368 San Diego 100 — — 100 842 San Francisco — — 80 80 — San Luis Obispo 25 — — 25 155 Santa Barbara 80 39 — 119 576 Santa Clara — — 80 80 18 Santa Cruz — 25 — 25 — Shasta — 20 — 20 64 Siskiyou 27 — — 27 150 Solano 62 23 — 85 362 Sonoma — — 40 40 72 Stanislaus 80 40 — 120 456 Sutter 10 — — 10 42 Tehama — — — 16 64 Trinity — — 20 20 19 Tulare 60 33 — 93 414 Tuolumnec 13 20 — 33 — Ventura — — 27 27 64 Yolo 36 — 31 67 10 Yuba — — 20 20 12 Totals $1,211 $493 $492 $2,220 10,588 a Chapter 42 of 2012 (SB 1022, Committee on Budget and Fiscal Review). b Chapter 37 of 2014 (SB 863, Committee on Budget and Fiscal Review). c Data on the number of beds was unavailable at the time of this analysis. 44 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET the administration, the proposed funds would certain non-violent, nonserious drug and property be awarded to counties that have either (1) not crimes. Since offenders convicted of such offenses received any of the above $2.2 billion or (2) received are now receiving shorter jail terms than they less funding than they requested. As shown in otherwise would have, the proposition has reduced Figure 18, there are 20 counties eligible to receive the workload for county jails. For example, the funding under this criteria. The administration has average statewide jail population decreased from indicated that the funds are primarily intended to about 83,000 inmates in the period from July to increase program and health care space and would September of 2014 to about 73,000 inmates in the be distributed in a manner similar to the funds period from January to March 2015. awarded pursuant to Chapter 42 and Chapter 37. Whether Eligible Counties Have Pursued Under the proposal, counties would be subject to Alternatives. In addition, the administration has a 10 percent match requirement, except that small not provided an assessment of whether the counties counties (populations of 200,000 or less) would be it has identified as eligible for jail construction subject to a 5 percent match requirement. funding have pursued alternatives that could reduce or eliminate the need for state funding. Proposal Lacks Adequate Assessment of Need In particular, it is unclear whether these counties The administration has not provided a have: detailed analysis regarding the magnitude of • Maximized Alternatives to Increasing either programming or capacity needs and the Jail Space. Counties have significant extent to which the Governor’s proposal would influence over the size of their jail meet these needs. For example, the administration populations. Specifically, counties can use has not provided an estimate of the number of various tools to reduce jail populations, additional jail beds counties need or the amount such as probation, alternatives to of additional rehabilitation program or health service space needed. As we discuss below, such Figure 18 Counties Eligible for Proposed Jail Funding an analysis should take into account (1) the impact of Proposition 47 (approved by the voters in Received No Received Only Prior Funding Partial Funding November 2014) on jail workload and (2) the extent to which eligible counties have pursued alternatives Alpine Placer Contra Costa Tehama that could reduce or eliminate the need for state Del Norte Ventura funding. El Dorado Impact of Proposition 47. According to the Glenn Inyo administration, the proposed $250 million is Lassen needed in part to address continued demands Marin on local jail infrastructure created by the Mariposa Mendocino 2011 realignment of low-level felony offenders. Modoc While realignment created a need for modifications Mono to jail infrastructure, the administration has Nevada Plumas not provided an analysis of any unmet needs San Joaquin and how these needs have been mitigated by San Mateo Proposition 47, which reduced the penalties for Sierra www.lao.ca.gov Legislative Analyst’s Office 45 2016-17 BUDGET incarceration, rehabilitation programs, Fund on a one-time basis to extend the local law flash incarceration, and aggressive pretrial enforcement grant program for another year lacks release. Counties can also take other sufficient justification and, thus, recommend its steps, such as contracting for jail space in rejection. other county jails. Counties that have not employed such tools may not necessarily Background need state funds for jail construction to Providing police services is one of the primary address their jail capacity needs. functions of local governments. In 2011-12, the • Planned to Make Effective Use of Program most recent year of data available, cities spent a Space. Some counties have indicated a need total of about $9.5 billion statewide to provide for funding to build facilities that would police services to California’s 482 cities. Most of be used to provide programming. The these funds come from local sources, such as local Legislature will want to ensure that such taxes and fees. space would be used to deliver programs As part of the 2012-13 budget, the Governor that have been demonstrated to be effective. proposed and the Legislature approved a three-year • Identified Local Funding Sources. In grant program (from 2012-13 through 2014-15) addition, it is unclear to what extent to provide state General Fund support to city law counties have attempted to identify local enforcement, primarily police. The funds were funding sources to address their jail initially approved at $24 million each year, then construction needs. were increased to $27.5 million in 2013-14, and The absence of such analysis makes it again to $40 million in 2014-15. more difficult for the Legislature to assess what The 2015-16 Budget Act included funding to infrastructure needs counties lack and whether the extend the local law enforcement grant program for proposed $250 million in the Governor’s budget for one additional year, as well as targeted the funding jail construction is needed, or if a different amount for specific purposes. Specifically, the budget would be appropriate. provided $26 million from the General Fund on a one-time basis for the program in 2015-16. This LAO Recommendation amount includes $20 million to increase positive Reject Proposed Jail Funding. While it is outcomes between city police and the homeless, possible that there may be some need for additional persons with mental health needs, and high-risk state funding for county jail construction, the youth. Agencies are required to provide data on administration has not been able to provide a their use of force in order to receive funding. detailed assessment of the current need. Absent The remaining $6 million is for strengthening such justification, we recommend that the the relationship between communities and Legislature reject the Governor’s proposal to law enforcement. The BSCC is responsible for provide $250 million from the General Fund for jail determining recipients of grants to strengthen construction. relationships between communities and law enforcement. According to the administration, the City Law Enforcement Grants BSCC is currently determining what measures will LAO Bottom Line. We find that the Governor’s be required to be reported to the state to assess the proposal to provide $26 million from the General effectiveness of the program. 46 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET Governor’s Proposal LAO Recommendation The Governor’s budget proposes $26 million Reject Proposed Funding. In view of the above, from the General Fund on a one-time basis to we recommend that the Legislature reject the extend the local law enforcement grant program for Governor’s proposal to provide $26 million in local yet another year. According to the administration, law enforcement grants in 2016-17. the grants for improving police relations with the Trial Court Security homeless, those with mental health needs, and at-risk youth would be provided to law enforcement LAO Bottom Line. We recommend that the agencies under an allocation formula determined Legislature reject the Governor’s proposal to by the California Police Chiefs Association based provide a $700,000 General Fund augmentation on county rates of mental illness and homelessness. for counties for increased trial court security Under the Governor’s proposal, law enforcement costs resulting from the reallocation of vacant agencies would not be required to report on their judgeships, due to a lack of justification that the use of the funds. The Governor also proposes proposed funding is needed. to eliminate the current requirement that law Background enforcement agencies report on their use of force in order to receive grants. 2011 Realignment of Trial Court Security. As part of the 2011-12 budget plan, the Legislature Proposal Lacks Sufficient Justification enacted a major shift—or “realignment”—of state The Governor’s proposal to provide $26 million criminal justice, mental health, and social services to extend the law enforcement grants for an program responsibilities and revenues to local additional year lacks justification for the following government. This realignment shifted responsibility reasons: for funding most trial court security costs (provided by county sheriffs) from the state General • Program Outcomes Not Clearly Defined. The administration has not provided Fund to counties. Specifically, the state shifted any plan for assessing whether the $496 million in tax revenues to counties to finance programs are effective at achieving their these new responsibilities. State law also requires intended goals. For example, it is unclear that any revenue from the growth in these tax what outcome measures would be used revenues is to be distributed annually to counties to determine whether the grants have based on percentages specified in statute. Due to strengthened the relationship between this additional revenue, the amount of funding communities and law enforcement. provided to counties to support trial court security • Raises Questions of State Role in Local has grown since 2011-12 and is expected to reach Policing. The proposed state funding is a $559 million in 2016-17—an increase of $63 million tiny fraction of total city police spending. (or nearly 13 percent). This additional revenue is Given that local policing has historically distributed among counties based on percentages been a local function, it’s not clear what specified in statute. role the state is serving by intervening in Additional General Fund Recently this way. Appropriated for Greater Levels of Trial Court Security. The California Constitution requires www.lao.ca.gov Legislative Analyst’s Office 47 2016-17 BUDGET that the state bear responsibility for any costs existing vacant trial court judgeships and their related to legislation, regulations, executive orders, staffing complements to trial courts with greatest or administrative directives that increase the judicial need. At this time, the administration overall costs borne by a local agency for realigned has not identified which trial courts will gain or programs or service levels mandated by the lose judgeships. The administration plans to work 2011 realignment. As part of the annual budget with the Judicial Council on how to implement act, the state provided $1 million in additional this proposal and intends to propose trailer General Fund support in 2014-15 and $2 million in bill legislation regarding the reallocation of the 2015-16—above the tax revenue provided through judgeships. the 2011 realignment—to provide counties with Lack of Justification for Additional Funding funding to address increased trial court security costs. Eligibility for these funds was limited Absent information on which courts will be to counties experiencing increased trial court losing or receiving judgeships, it is difficult for security costs resulting from the construction of the Legislature to determine whether trial court new courthouses occupied after October 9, 2011 security levels are actually increasing. For example, (around the time of implementation of the 2011 certain trial courts only use sheriff-provided realignment). Counties are required to apply to security in a limited number of case types—such the Department of Finance (DOF) for these funds as criminal cases. To the extent such a court and only receive funding after meeting certain receives a judgeship and assigns the judge to hear conditions—including that the county prove that non-criminal cases, the sheriff is not providing an a greater level of service is now required from the increased level of service that requires increased county sheriff than was provided at the time of funding. In addition, counties with trial courts that realignment. Of the additional funds provided, are losing judgeships may be experiencing reduced DOF allocated $713,000 in 2014-15 and expects to costs from lower court security service levels. allocate about $1.5 million to qualifying counties in However, rather than shifting the resulting savings 2015-16. to counties receiving judgeships, counties losing judgeships under the Governor’s proposal will Governor’s Proposal maintain their funding. The Governor’s budget for 2016-17 includes LAO Recommendation $5 million in General Fund support for increased trial court security costs resulting from the Reject Proposed Augmentation. In view of construction of new courthouses, an increased the above, the administration has not shown that amount from what has been provided in each of additional resources are needed. Accordingly, the past two fiscal years. The budget also proposes we recommend that the Legislature reject the a $700,000 General Fund augmentation to counties Governor’s proposal for a $700,000 General Fund for increased trial court security levels resulting augmentation for increased trial court security from a separate proposal to reallocate up to five needs. 48 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET SUMMARY OF LAO RECOMMENDATIONS Issue Governor’s Proposal LAO Recommendation Cross Cutting Issue Criminal fine and fee Various proposals including expenditure Approve proposals given the lack of other available revenue reductions, cost shifts to the General Fund as solutions in the short term. Implement structural well as other funds, and cash flow loans from the changes to criminal fine and fee system to General Fund, to address operational shortfalls permanently address problem by reevaluating and insolvency in various state funds due to the overall structure of the system, increasing declines in criminal fine and fee revenue. legislative control over the use of its revenue, and restructuring the collection process. California Department of Corrections and Rehabilitation (CDCR) Adult prison and parole Increase of $14.1 million (General Fund) for various Withhold recommendation until May Revise and populations adjustments associated with prison and parole direct CDCR to provide an estimate of savings caseload changes. from the delayed activation of the infill facility at R.J. Donovan prison so that it can be incorporated into the budget. Plans for complying Proposes extension of authority to procure contract Approve extension of authority to procure contract with court-ordered beds. beds but direct CDCR to close the California population cap Rehabilitation Center in Norco as the capacity is not necessarily needed to comply with the population cap. Drug interdiction Increase of $7.9 million (General Fund) to extend Approve $750,000 for drug testing but reject for one additional year an existing inmate drug remainder of proposal due to the lack of testing and drug interdiction pilot program. conclusive evidence at this time regarding program effectiveness. Housing unit conversions Increase of $5.8 million (General Fund) to fund Reject proposal given insufficient justification, increased staffing for CDCR’s Investigative particularly in light of recent declines in other ISU Services Unit (ISU) from savings related to workload. segregated housing unit conversions. Alternative custody Increase of $3.7 million (General Fund) to expand Withhold action on the proposal to reduce the length programs alternative custody programs. Reduce the length of time inmates can participate pending additional of time inmates can participate in the programs information to determine whether the change is from two years to one. warranted. Programs and services Increase of $10.5 million (General Fund) to expand Approve $4 million for proposed expansion of for long-term offenders availability of programs for long-term offenders. programming benefitting higher-risk offenders. Reject the remainder of the proposal to expand services for long-term offenders as research suggests that programs targeting higher-risk offenders are likely to achieve better outcomes. Male Community Reentry Increase of $32 million (General Fund) to support Reject proposal given that MCRP is unlikely to Program (MCRP) existing MCRP and expand the program to four be the most cost-effective approach to reduce additional facilities. recidivism. Supervisory staffing Increase of $6 million (General Fund) to allow for Reject proposal given insufficient justification that model for correctional separate executive management teams at each adequate levels of care cannot be provided by medical care state prison. shared executive management teams. (Continued) www.lao.ca.gov Legislative Analyst’s Office 49 2016-17 BUDGET Issue Governor’s Proposal LAO Recommendation Augmentation for inmate Increase of $6.8 million (General Fund) to Approve increases to the inmate pharmaceutical pharmaceuticals account for increased expenditures for inmate budget based on pharmaceutical CPI projections pharmaceuticals, partially based on using rather than past-year changes. Direct Receiver to the past-year changes in the pharmaceutical provide additional information on pharmaceutical Consumer Price Index (CPI) to estimate expenditures and prices. expenditures in the budget year. Ironwood State Prison Increase of $524,000 (General Fund) for Reduce proposal by $275,000 to reflect savings maintenance staff maintenance of the new central chiller system at available from eliminating maintenance on the Ironwood State Prison. pre-existing cooling system. Judicial Branch $20 million augmentation Increase of $20 million (General Fund) to support Reject proposal given insufficient justification for trial court operations trial court operations. particularly since proposed budget already accounts for increased workload and costs. New court innovations Increase of $30 million (General Fund) on a one- Withhold action pending additional information on grant program time basis to provide grants to support trial and the program from the administration and judicial appellate court innovation, modernization, or branch. efficiency programs or services. Judicial branch facility Increase of $33 million (Immediate and Critical Withhold action on increased spending from ICNA construction proposals Needs Account [ICNA]) on a one-time basis for pending a report from Judicial Council on how it facility modification projects as well as design would ensure monies would be available to fully and construction activities for four previously fund the proposed projects. Adopt supplemental approved projects. Lease revenue bond authority reporting language directing Judicial Council to of $272 million for the construction of four develop plan for long-term solvency of ICNA. previously approved projects. Department of Justice (DOJ) Fraud and elder Increase of $7.8 million (Federal Trust Fund and Approve funding on a one-time basis to eliminate abuse enforcement False Claims Act Fund) to eliminate backlog existing backlog. Insufficient justification for enhancement consisting largely of abuses and neglect cases, ongoing funding. address an anticipated increase in abuse and Medi-Cal fraud workload, and expand DOJ abilities to prosecute Medi-Cal fraud. Public protection and Increase of $1.4 million (Legal Services Revolving Reject proposal as average number of days to consumer protection Fund) to reduce the average number of days adjudication would likely decline without additional enforcement initiative needed to bring Department of Consumer Affairs positions and issues unrelated to staffing could formal discipline cases to adjudication. be causing delays. Recommend requiring DOJ to report on strategies for preparing cases for adjudication in a timely manner. Local Public Safety County jail grants Increase of $250 million (General Fund) in one- Reject proposal due to the lack of a detailed analysis time funding for jail construction. from the administration regarding the need for additional state jail funding. City law enforcement Increase of $26 million (General Fund) in one-time Reject proposal given lack of sufficient justification. grants funding to extend the local law enforcement grant program. Trial court security Increase of $700,000 (General Fund) for counties Reject proposal due to lack of justification that the to provide trial court security related to a proposed funding is needed. separate proposal to reallocate up to five existing vacant trial court judgeships. 50 Legislative Analyst’s Office www.lao.ca.gov 2016-17 BUDGET www.lao.ca.gov Legislative Analyst’s Office 51 2016-17 BUDGET Contact Information Drew Soderborg Managing Principal Analyst, 319-8346 Drew.Soderborg@lao.ca.gov Criminal Justice Aaron Edwards Prisons, Jails, 319-8351 Aaron.Edwards@lao.ca.gov Board of State and Community Corrections Anita Lee Criminal Fines and Fees, 319-8321 Anita.Lee@lao.ca.gov Courts, Department of Justice Jonathan Peterson Rehabilitation Programs, 319-8324 Jonathan.Peterson@lao.ca.gov Inmate Health Care LAO Publications The Legislative Analyst’s Office (LAO) is a nonpartisan office which 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. 52 Legislative Analyst’s Office www.lao.ca.gov