The 2018-19 Budget: Criminal Justice Proposals

The 2018-19 Budget: Governor’s Criminal Justice Proposals MAC TAYLOR LEGISLATIVE ANALYST FEBRUARY 27, 2018 analysis full gutter 2018-19 BUDGET LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Table of Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Criminal Justice Budget Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Cross Cutting Issue: State Penalty Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 California Department of Corrections and Rehabilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Trends in the Adult Inmate and Parolee Populations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Accommodating Inmate Population Reductions Resulting From Proposition 57 . . . . . . . . . . . . . . . . . . . . . . . 10 Parole Staffing Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Wage Increases for Inmate Workers Assigned to Facility Maintenance Jobs . . . . . . . . . . . . . . . . . . . . . . . . . 13 Video Surveillance at California State Prison, Sacramento . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Ventura Training Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Innovative Programming Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Inmate Mental Health Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Dental Equipment Replacement and Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Health Care Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Electronic Health Record System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Medication Room Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Governor’s Juvenile Justice Reform Proposa .l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Judicial Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Augmentations to General Purpose Funding for Trial Court Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Augmentation for Self-Help Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Online Traffic Adjudication Pilot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 County Office of Education Offset of Trial Court General Fund Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Trial Court Construction Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 California Department of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Antitrust Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Cardroom-Related Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Proposition 63 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Summary of Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 www.lao.ca.gov analysis full gutter 2018-19 BUDGET LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Executive Summary Overview. The Governor’s budget proposes a total of $17 .2 billion from various fund sources for judicial and criminal justice programs in 2018-19 . This is an increase of $302 million, or 2 percent, above estimated expenditures for the current year . The budget includes General Fund support for judicial and criminal justice programs of $13 .9 billion in 2018-19, which is an increase of $270 million, or 2 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 . We provide a complete listing of our recommendations at the end of the report . Accommodating Proposition 57 Inmate Population Reductions. In response to the decline in the inmate population resulting from Proposition 57 (2016), the Governor proposes to remove inmates from the two out-of-state prison facilities and place them in a prison operated by the California Department of Corrections and Rehabilitation (CDCR) . We recommend that the Legislature instead consider directing CDCR to close the California Rehabilitation Center (CRC) in Norco and remove inmates from one of the two out-of-state facilities . If the Legislature decides to close CRC, we recommend directing the department to provide a detailed closure plan . If the Legislature decides not to close CRC, CDCR should provide a plan for making the necessary infrastructure improvements at the prison . Ventura Training Facility. The proposed budget provides a total of $9 million from the General Fund to CDCR, the Department of Forestry and Fire Protection, and the California Conservation Corps to create a new firefighter training program for 80 parolees . According to the administration, the primary purpose of the proposal is to reduce parolee recidivism . We recommend rejection of the proposal because there is little evidence that the plan would be a cost-effective way to achieve the stated goal . Instead, to the extent that the Legislature wanted to prioritize recidivism reduction programs, there are likely to be evidence-based programs that could serve many more individuals and at a lower cost than under the Governor’s proposal . Inmate Mental Health Programs. We make several recommendations on the Governor’s proposals to increase the number of Mental Health Crisis Beds (MHCBs) and improve CDCR’s overall management of mental health beds . First, we recommend the Legislature provide limited-term funding (rather than ongoing funding as proposed by the Governor) for CDCR to convert 60 existing mental health beds into “flex beds” to potentially use as MHCBs, as the need for MHCBs appears to be temporary . Second, we recommend the Legislature reject the working drawings funding proposed for two MHCB facility projects as current projections suggest that they would not be needed by the time they are in operation . Third, we recommend rejecting the proposed resources for CDCR to take over the mental health projections currently done by a private contractor . Finally, we recommend the Legislature approve the requested staff resources to help CDCR meet court-approved guidelines for transferring patients to mental health beds . Trial Court Funding Augmentations. The Governor’s budget includes $123 million to increase general purpose funding for trial court operations—$75 million allocated based on the Judicial Council’s priorities and $47 .8 million for certain trial courts that are comparatively less well-funded than other courts . In evaluating the Governor’s proposals, we recommend that the Legislature (1) consider the level of funding it wants to provide relative to its other General Fund priorities and (2) allocate any additional funds provided based on its priorities—rather than allowing the Judicial Council to do so . Additionally, given the uncertainty around whether the Judicial Council’s current workload-based funding methodology www.lao.ca.gov 1 analysis full gutter 2018-19 BUDGET accurately estimates trial court needs, we also recommend the Legislature convene a working group to evaluate the methodology . Trial Court Construction Projects. The Governor’s budget proposes to use lease revenue bonds backed from the General Fund—rather than an existing court construction account—to finance the construction of ten trial court projects that are currently on hold or have been indefinitely delayed due to a lack of revenue in the account . We find that this approach does not address key underlying problems with the state’s current trial court construction program, such as a lack of resources to pay existing debt service for court construction projects already completed . To address these problems, we recommend that the Legislature eliminate the state’s two construction accounts, shift responsibility for funding trial construction projects to the General Fund, and increase legislative oversight of funded projects . This would help ensure that those projects that are legislative priorities and have the greatest needs are funded, rather than being constrained by existing declining revenue sources . To the extent the Legislature would like to maintain the existing court construction system, we recommend modifying the Governor’s proposal to address some of the concerns we raise . 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET CRIMINAL JUSTICE BUDGET OVERVIEW The primary goal of California’s criminal justice provided to the trial courts to offset reductions made in system is to provide public safety by deterring and prior years and fund specific activities . preventing crime, punishing individuals who commit Governor’s Budget Proposals crime, and reintegrating criminals back into the community . The state’s major criminal justice programs Total Proposed Spending of $17.2 Billion in include the court system, the California Department 2018-19. As shown in Figure 2 (see next page), of Corrections and Rehabilitation (CDCR), and the the Governor’s 2018-19 budget includes a total of California Department of Justice (DOJ) . The Governor’s $17 .2 billion from all fund sources for judicial and budget for 2018-19 proposes total expenditures of criminal justice programs . This is an increase of $17 .2 billion for judicial and criminal justice programs . $302 million (2 percent) over the revised 2017-18 level Below, we describe recent trends in state spending on of spending . General Fund spending is proposed criminal justice and provide an overview of the major to be $13 .9 billion in 2018-19, which represents an changes in the Governor’s proposed budget for criminal increase of $270 million (2 percent) above the revised justice programs in 2018-19 . 2017-18 level . We note that this increase does not include increases in 2018-19 employee compensation State Expenditure Trends costs for these departments, which are budgeted Total Spending Declined Between 2010-11 elsewhere . If these cost were included, the increase and 2012-13 . . . Over the past decade, total state would be somewhat higher . expenditures on criminal justice programs has varied . Major Budget Proposals. The most significant As shown in Figure 1, criminal justice spending piece of new spending included in the Governor’s declined between 2010-11 and 2012-13, primarily due budget relates to various proposals to increase to two factors . First, in 2011 the state realigned various General Fund support for trial courts by a total of criminal justice responsibilities to the counties, including $210 million, including $75 million to support Judicial the responsibility for certain low-level felony offenders . This realignment Figure 1 reduced state correctional spending . Second, the judicial branch— Judicial and Criminal Justice Expenditures particularly the trial courts—received (In Billions) significant one-time and ongoing General Fund reductions . $18 Special and Other Funds General Fund . . . But Has Increased Since 16 Then. Since 2012-13, overall spending on criminal justice 14 programs has steadily increased . 12 This was largely due to additional funding for CDCR and the trial 10 courts . For example, increased 8 CDCR expenditures resulted from (1) increases in employee 6 compensation costs, (2) the 4 activation of a new health care facility, and (3) costs associated with 2 increasing capacity to reduce prison overcrowding . During this same time 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 period, various augmentations were www.lao.ca.gov 3 analysis full gutter 2018-19 BUDGET Figure 2 Judicial and Criminal Justice Budget Summary (Dollars in Millions) Change From 2017‑18 Actual Estimated Proposed 2016‑17 2017‑18 2018‑19 Actual Percent Department of Corrections and Rehabilitation $10,889 $11,849 $11,975 $125 1.1% General Funda 10,592 11,540 11,661 121 1.1 Special and other funds 297 309 313 4 1.3 Judicial Branch $3,522 $3,675 $3,864 $188 5.1% General Fund 1,702 1,748 1,907 158 9.1 Special and other funds 1,821 1,927 1,957 30 1.6 Department of Justice $745 $927 $926 ‑$1 ‑0.1% General Fund 219 238 245 7 2.8 Special and other funds 526 689 681 -8 -1.1 Board of State and Community Corrections $201 $162 $155 ‑$7 ‑4.4% General Fund 108 67 49 -18 -26.9 Special and other funds 93 94 105 11 11.6 Other Departmentsb $225 $241 $237 ‑$4 ‑1.6% General Fund 80 71 72 1 1.9 Special and other funds 145 170 165 -5 -3.1 Totals, All Departments $15,583 $16,854 $17,156 $302 1.8% General Fund 12,701 13,664 13,934 270 2.0 Special and other funds 2,882 3,189 3,222 32 1.0 a Does not include revenues to General Fund to offset corrections spending from the federal State Criminal Alien Assistance Program. b Includes Office of the Inspector General, Commission on Judicial Performance, Victim Compensation 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. Council priorities and $48 million to equalize funding including $61 million to replace roofs at three prison across trial courts . In addition, the budget includes facilities, $33 million to replace public safety radio various augmentations for other departments . For communication systems, and $20 million to repair example, the Governor’s budget proposes a total of damage from leaking roofs . $136 million for infrastructure and equipment at CDCR, CROSS CUTTING ISSUE: STATE PENALTY FUND LAO Bottom Line. The Governor’s proposed revenue to address the ongoing structural problems expenditure plan for the State Penalty Fund (SPF) with the state’s current fine and fee system . generally is consistent with the 2017-18 plan . We Background recommend, however, that the Legislature review the plan to make sure it reflects its priorities and Criminal Fine and Fee Revenue Supports modify as necessary . As we have indicated in recent Numerous State and Local Programs. During court years, long-term solutions are needed to the overall proceedings, trial courts typically levy fines and fees assessment, collection, and distribution of fine and fee upon individuals convicted of criminal offenses (including traffic violations) . When such fines and fees are collected, 4 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET state law (and county board of supervisor resolutions for the DNA Identification Fund in 2017-18 and certain local charges) dictates a very complex process for 2018-19 to two other special funds . However, the distribution of fine and fee revenue to numerous state one such cost shift—specifically the General and local funds . These funds in turn support numerous Fund backfill of the Trial Court Trust Fund, which state and local programs . For example, such revenue supports trial court operations—has been is deposited into the SPF for the support of various provided continuously since 2014-15 . programs including training for local law enforcement • Reducing Expenditures. The state has and victim assistance . State law requires that collected also directed certain departments to reduce revenue be distributed in a particular priority order, allows expenditures from fine and fee revenue . distributions to vary by criminal offense or by county, For example, the Commission on Peace and includes formulas for distributions of certain fines Officer Standards and Training (POST), which and fees . (For more information about how criminal fines receives such revenue to support training and fees are assessed and distributed, please see our for law enforcement, was required to reduce January 2016 report, Improving California’s Criminal expenditures . In response, the commission took Fine and Fee System .) A total of about $1 .7 billion in fine several actions, such as suspending or reducing and fee revenue was distributed to state and local funds certain training reimbursements and postponing in 2015-16 . Of this amount, the state received roughly some workshops . Similarly, as we discuss in one-half . more detail later in this report, the reduction in Various Actions Taken in Recent Years to fine and fee revenues has halted certain trial court Address Declining Criminal Fine and Fee Revenue. construction projects . The total amount of fine and fee revenue distributed • Increasing Revenue. The state has also to state and local governments has declined since attempted to increase the amount of fine and 2010-11 . As a result, a number of state funds fee revenue collected in different ways . For receiving such revenue, including the SPF, have been example, the 2017-18 budget provided one-time in operational shortfall for years—meaning annual and ongoing resources for the Franchise Tax expenditures exceed annual revenues—and some Board (FTB) to increase its fine and fee revenue have become insolvent . Over the past few years, the collection activities . (Currently, court and county state has adopted a number of one-time and ongoing collection programs can collect fine and fee solutions to address the shortfalls or insolvency facing revenue themselves, as well as contract with FTB some of these funds: or private entities .) • Eliminating SPF Distribution Formulas. As Governor’s Proposal part of the 2017-18 budget, the state eliminated existing statutory provisions dictating how SPF Expenditure Plan. The Governor’s budget revenues deposited into the SPF are distributed projects that about $81 million in criminal fine and fee to nine other state funds . Instead, specific dollar revenue will be deposited into the SPF in 2018-19—a amounts are now appropriated directly to specific decline of $12 .6 million (or 13 .5 percent) from the programs in the annual budget based on state revised current-year estimate . (We note that revenue priorities . deposited into the SPF has steadily declined since • Shifting Costs. In recent years, the state has 2008-09 and will have declined by 53 percent by shifted costs from various funds supported by 2018-19 .) Of this amount, the administration proposes fine and fee revenue to the General Fund or other to allocate $79 .5 million to eight different programs in funds . Most of these cost shifts were either on 2018-19—all of which received SPF funds in the current a one-time or temporary basis . For example, year . As shown in Figure 3 (see next page), many nearly $16 .5 million in costs were shifted from the of these programs are also supported by other fund Peace Officers Training Fund to the General Fund sources . Under the Governor’s plan, five of the eight in 2016-17 . More recently, the state authorized programs would receive less SPF support compared DOJ to effectively shift $15 million in costs from to the estimated 2017-18 level . For some of these www.lao.ca.gov 5 analysis full gutter 2018-19 BUDGET Figure 3 Governor’s Proposed State Penalty Fund (SPF) Expenditures for 2018-19 (In Thousands)# Change From 2017-18 (Estimated) 2018-19 (Proposed) 2017-18 Other Other Program SPF Funds Total SPF Funds Total Total Victim Compensation $9,100 $103,656 $112,756 $6,534 $105,867 $112,401 -$355 Various OES Victim Programsa 11,834 73,377 85,211 8,984 63,649 72,633 -12,578 Peace Officer Standards and Training 47,241 5,287 52,528 43,835 1,959 45,794 -6,734 Standards and Training for Corrections 17,304 100 17,404 15,998 100 16,098 -1,306 CalWRAP 3,277 — 3,277 2,478 — 2,478 -799 DFW employee education and training 450 2,628 3,078 450 2,536 2,986 -92 Bus Driver Training 895 494 1,389 — 1,447 1,447 58 Traumatic Brain Injury 800 314 1,114 800 92 892 -222 Local Public Prosecutors and 450 — 450 450 — 450 — Public Defenders Training Totals $91,351 $185,856 $277,207 $79,529 $175,650 $255,179 -$22,028 a Includes Victim Witness Assistance Program, Victim Information and Notification Everyday Program, Rape Crisis Program, Homeless Youth and Exploitation Program, and Child Sex Abuse Treatment Program. OES = Office of Emergency Services; CalWRAP = California Witness Relocation and Assistance Program; and DFW = Department of Fish and Wildlife. programs (such as the Victim Compensation Program), as for victim compensation) will be offset by increased funding from other sources are proposed to partially expenditures from other funds . offset the reduction in SPF support . Additionally, the Unclear What Impact Proposed Reductions Will Governor proposes to shift SPF support for the Bus Have. The Governor’s proposed expenditure plan does Driving Training Program to the Motor Vehicle Account not specify how the programs would accommodate the (MVA) . (The MVA supports the state administration proposed funding reductions . Rather, the reductions and enforcement of laws regulating the operation and are unallocated and the programs would be given registration of vehicles used on public streets and flexibility in how such reductions will be implemented . highways .) Finally, we note that the Governor’s budget For example, it is unknown at this time how POST does not include funding for two programs—the will accommodate its reductions . Accordingly, the California Violence Intervention and Prevention Grant programmatic impact of the proposed reductions is Program (CalVIP) and Internet Crimes Against Children unknown . Program—that received General Fund support in Legislature May Have Different Priorities. While 2017-18 to backfill on a one-time basis the elimination the Governor’s proposal reflects the administration’s of SPF support for these programs . funding priorities, it is likely that the Legislature has different priorities . The Legislature could decide LAO Assessment that programs should implement different levels of Proposal Generally Consistent With Prior Year. expenditure reductions . For example, the Legislature The Governor’s proposed SPF expenditure plan could make greater reductions for peace officer or reflects priorities that are generally consistent with the corrections standards and training in order to make expenditure plan for 2017-18 . Specifically, the proposed funding available to support CalVIP . In addition, plan does not eliminate SPF support for any programs the Legislature may want to specify how certain which received such support in 2017-18 except the departments implement their reductions in order to Bus Driver Training Program which would be supported ensure that their choices are consistent with legislative by the MVA instead . Additionally, similar to 2017-18, priorities . reductions in SPF support for certain programs (such 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Structural Problems With Criminal Fine and Consider Changing Overall Distribution of Fine Fee System Still Remain. The Governor’s proposal and Fee Revenue. As we have indicated in recent does not provide a long-term solution to address the years, a broader, long-term approach to changing the structural problems of the state’s criminal fine and overall distribution of fine and fee revenue is needed fee system . As noted above, the amount of criminal to address the ongoing structural problems with the fine and fee revenue distributed into state and local current system . As initially discussed in our January funds—such as the SPF—continues to decline . The 2016 report, we continue to recommend that the elimination of formulas dictating SPF allocations in Legislature (1) eliminate all statutory formulas related to 2017-18 increased the Legislature’s control over fines and fees and (2) require the deposit of nearly all the use of the revenue and allowed the Legislature such revenue, except those subject to legal restrictions, to allocate funding based on its priorities . However, into the General Fund for subsequent appropriation numerous other distribution formulas remain— in the annual state budget . This would allow the thereby making it difficult for the Legislature to make Legislature to maximize control over the use of such year-to-year adjustments in spending . Additionally, revenue and ensure that state and local programs it the level of funding allocated to programs, including deems to be priorities are provided the level of funding those supported by the SPF, still relies on the amount necessary to meet desired workload and service levels . of criminal fine and fee revenue that is available rather This would also eliminate the need for the Legislature than on workload or service level needs . This means to continuously identify and implement short-term that programs that are supported by such revenue, solutions to address various other such funds which can fluctuate depending on factors outside supported by this revenue that are currently facing or of the Legislature’s control (such as the number of nearing structural shortfalls or insolvency . citations issued and individuals’ willingness to pay), will Consider Other Long-Term Solutions to Address continue to be disproportionately impacted compared Structural Problems. In recent years, we have also to programs that are not supported by this type of identified various key weaknesses and problems with revenue . Finally, to the extent that revenue continues the state’s assessment, collection, and distribution of to decline, the Legislature will be required to continue criminal fine and fee revenue, such as a lack of clear to take action to address the operational shortfalls and fiscal incentives for collection programs to collect debt insolvencies of funds supported by such revenue . in a cost-effective manner that maximized the amount collected . To address these deficiencies, we provided a LAO Recommendations number of recommendations to overhaul and improve Ensure SPF Expenditure Plan Reflects Legislative the system . For example, we recommended piloting Priorities. Although the Governor’s proposed SPF a new collections model to address the lack of clear expenditure plan is generally consistent with the incentives for collection programs to collect debt in a 2017-18 plan, the Legislature will want to review it to cost-effective manner, as well as consolidating most make sure the plan reflects its priorities—particularly fines and fees to address the challenges of distributing given the projected reduction in SPF revenues—and revenues accurately . (For more information on our make any necessary adjustments . We recommend findings and recommendations, please see our January the Legislature direct the entities that administer the 2016 report, as well as our November 2014 report, programs to take specific actions in implementing Restructuring the Court-Ordered Debt Collection any reduction in SPF support, in order to ensure that Process .) legislative priorities are maintained . For example, the Legislature could require that entities maintain certain types of training provided to local agencies . www.lao.ca.gov 7 analysis full gutter 2018-19 BUDGET CALIFORNIA DEPARTMENT OF CORRECTIONS AND REHABILITATION OVERVIEW projects . This additional proposed spending is partially offset by various spending reductions, including The CDCR is responsible for the incarceration reduced spending for contract beds . (The proposed of adult felons, including the provision of training, $125 million increase does not include anticipated education, and health care services . As of January 10, increases in employee compensation costs in 2018-19 .) 2018, CDCR housed about 130,000 adult inmates in the state’s prison system . Most of these inmates are TRENDS IN THE ADULT INMATE housed in the state’s 35 prisons and 43 conservation AND PAROLEE POPULATIONS camps . About 8,000 inmates are housed in either in-state or out-of-state contracted prisons . The LAO Bottom Line. We withhold recommendation department also supervises and treats about 46,000 on the administration’s adult population funding request adult parolees and is responsible for the apprehension until the May Revision . of those parolees who commit parole violations . In addition, 620 juvenile offenders are housed in facilities Background operated by CDCR’s Division of Juvenile Justice, which As shown in Figure 5, the average daily inmate includes three facilities and one conservation camp . population is projected to be 127,400 inmates Spending Proposed to Increase by $125 Million in 2018-19, a decrease of about 2,900 inmates in 2018-19. The Governor’s budget proposes total (2 percent) from the estimated current-year level . Also expenditures of $12 billion ($11 .7 billion General shown in Figure 5, the average daily parolee population Fund) for CDCR operations in 2018-19 . Figure 4 is projected to be 49,800 in 2018-19, an increase of shows the total operating expenditures estimated about 2,800 parolees (6 percent) from the estimated in the Governor’s budget for the past and current current-year level . The projected decrease in the inmate years and proposed for the budget year . As the figure population and increase in the parolee population is indicates, the proposed spending level is an increase primarily due to the estimated impact of Proposition 57 of $125 million, or about 1 percent, from the estimated (2016), which made certain nonviolent offenders 2017-18 spending level . This increase reflects additional eligible for parole consideration and expanded CDCR’s funding to (1) replace roofs and address mold damage authority to reduce inmates’ prison terms through at various prisons, (2) replace radio communication credits . systems, and (3) pay the debt service for construction Figure 4 Total Expenditures for the California Department of Corrections and Rehabilitation (Dollars in Millions) Change From 2017‑18 2016‑17 2017‑18 2018‑19 Actual Estimated Proposed Amount Percent Prisons $9,646 $10,477 $10,522 $45 — Adult parole 548 620 654 34 5% Administration 467 504 548 44 9 Juvenile institutions 183 197 201 4 2 Board of Parole Hearings 45 50 50 -1 -2 Totals $10,889 $11,849 $11,975 $125 1% 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Governor’s Proposal offenders and various subpopulations (such as inmates housed in contract facilities and sex offenders on As part of the Governor’s January budget proposal parole) . each year, the administration requests modifications The administration proposes a net increase of to CDCR’s budget based on projected changes in $39 .5 million in the current year and a net increase the inmate and parolee populations in the current and of $38 .3 million in the budget year for adult budget years . The administration then adjusts these population-related proposals . The current-year net requests each spring as part of the May Revision based increase in costs is primarily due to a smaller than on updated projections of these populations . The anticipated reduction in the use of contract beds, adjustments are made both on the overall population of as well as increases in the number of inmates Figure 5 Adult Inmate Population Projected to Decline Slightly And Parolee Population Projected to Increase 180,000 Inmate Population Parolee Population 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Estimated Projected www.lao.ca.gov 9 analysis full gutter 2018-19 BUDGET housed in state-operated prisons and spending on the population of the 34 prisons to below 137 .5 percent inmate medical care relative to what was assumed of their design capacity . (Design capacity generally in the 2017-18 Budget Act . This increase in cost is refers to the number of beds CDCR would operate partially offset by projected savings—such as from if it housed only one inmate per cell and did not use the cancellation of a planned expansion of the Male temporary beds, such as housing inmates in gyms .) Community Reentry Program to San Francisco . The The court also appointed a compliance officer . If the budget-year net increase in costs is primarily due to prison population exceeds the population cap at any a projected increase in the parolee population as a point in time, the compliance officer is authorized to result of Proposition 57 and the activation of additional order the release of the number of inmates required administrative segregation and mental health housing to meet the cap . To ensure that such releases do not units . These increased costs are partially offset by occur if the prison population increases unexpectedly, savings—such as from a decrease in the use of CDCR houses about 2,000 fewer inmates than is contract beds . allowed under the cap as a “buffer .” Various Changes Have Allowed State to Comply LAO Recommendation With Population Cap. In order to comply with the We withhold recommendation on the administration’s court order, the state has taken a number of actions in adult population funding request until the May Revision . recent years . These actions include (1) housing inmates We will continue to monitor CDCR’s populations and in contract prison facilities (discussed in greater detail make recommendations based on the administration’s below), (2) constructing additional prison capacity, and revised population projections and budget adjustments (3) reducing the inmate population by implementing included in the May Revision . several policy changes, such as the 2011 realignment, which required that certain lower-level felons serve their ACCOMMODATING INMATE incarceration terms in county jail rather than state prison . Contract Prisons Currently Used to Avoid POPULATION REDUCTIONS Exceeding Population Cap. CDCR relies on contract RESULTING FROM PROPOSITION 57 facilities to maintain compliance with the court order . As of January 10, 2018, CDCR housed about LAO Bottom Line. In order to accommodate the 4,300 inmates in two out-of-state contract facilities— anticipated decline in the inmate population due to about 1,300 inmates in Tutwiler, Mississippi and about Proposition 57, we recommend that the Legislature 3,000 inmates in Eloy, Arizona . CDCR also housed consider directing CDCR to close the California about 4,100 inmates in several contract facilities Rehabilitation Center (CRC) in Norco and remove located in California . inmates from the contract facility in Mississippi—rather than closing all out-of-state contract facilities as Inmate Population Projected to Decline Due to proposed by the Governor . If the Legislature decides to Proposition 57. Approved by the voters in November close CRC, we recommend directing CDCR to provide 2016, Proposition 57 (1) made certain nonviolent a detailed plan on the closure . If the Legislature decides offenders eligible to be considered for release after not to close CRC, CDCR should provide it with a plan serving a portion of their sentence, (2) expanded for making the necessary infrastructure improvements CDCR’s authority to reduce inmates’ prison terms at the prison . through credits earned for good behavior and participation in rehabilitation programs, and (3) required Background that judges decide whether juveniles should be tried in adult court . The administration expects these changes Federal Court Orders Prison Population Cap. In to reduce the average daily inmate population by about recent years, the state has been under a federal court 2,900 in 2018-19, growing to a roughly 5,000 inmate order to reduce overcrowding in the 34 state prisons reduction by 2020-21 relative to its current level . operated by CDCR . Specifically, the court found that (For more information on the implementation of prison overcrowding was the primary reason the state Proposition 57, please see our report, The 2017-18 was unable to provide inmates with constitutionally Budget: Implementation of Proposition 57 .) adequate health care and ordered the state to reduce 10 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Governor’s Proposals including a permanent solution to the decaying infrastructure at CRC . The administration’s plan stated The Governor proposes to accommodate the that closing CRC is a priority but that the capacity will anticipated decline in the inmate population due to be needed for the next few years in order to maintain Proposition 57 by removing inmates from the contract compliance with the prison population cap . While the facility in Mississippi by June 2018 and from the Arizona 2016-17 budget included $6 million for special repairs facility by fall 2019 . These inmates would be moved to at CRC to address some of the prison’s most critical CDCR-operated prisons to fill beds that are vacated infrastructure needs (such as improvements to electrical as the overall population declines . Accordingly, the and plumbing systems), the administration has not proposed budget includes a $68 million reduction presented a plan for the significant improvements in spending on out-of-state contract facilities in that are still necessary, including health care facility 2018-19 relative to the revised 2017-18 level . improvements that have been made at other prisons at LAO Assessment the request of the federal Receiver . Closing CRC and Removing Fewer Inmates Alternative to Closing All Out-of-State Contract From Contract Facilities Could Result in Significant Facilities Is to Close a State Prison. We agree with Savings. Given the expected decline in the inmate the administration that CDCR is likely to experience population as a result of Proposition 57, we estimate a decline of roughly 5,000 inmates over the next few that the state could close CRC and still make a years . The Governor proposes to accommodate significant reduction in out-of-state contract beds by this population decline by closing all out-of-state closing the Mississippi contract facility . (The state would contract facilities . The estimated inmate decline, need to maintain the Arizona contract .) We estimate however, presents the Legislature with the opportunity that closing CRC and the Mississippi contract facility to consider alternative ways to accommodate the would eventually result in ongoing net savings of population reductions caused by Proposition 57 that roughly $100 million annually relative to the Governor’s could result in a greater reduction in state costs and still plan . This is because the department saves about keep a buffer of about 2,000 inmates below the cap . $30,000 annually per inmate removed from a contract Specifically, the state could instead close a state prison facility while it saves roughly $70,000 annually per since California’s prisons typically house between inmate when it closes a state prison . (The higher 2,000 and 5,000 inmates—a similar magnitude to per inmate costs of state-run facilities are due to a the population reductions expected as a result of variety of factors including contractors’ lower employee Proposition 57 . compensation costs and CDCR’s practice of not Possible Prison to Close Is CRC Due to Its Costly putting inmates with high health care needs—who are Repair Needs. In 2012, the administration’s plan for relatively expensive—into contract facilities .) Moreover, reorganizing CDCR following the 2011 realignment if the state closed CRC, it would avoid the cost of of adult offenders called for the closure of CRC by renovating the prison and constructing updated medical 2015, due to its age and deteriorating infrastructure . facilities . Currently, CDCR estimates it would require At the time, CDCR estimated that fully addressing over $200 million to fully address the infrastructure all of the facility’s maintenance needs could cost needs at CRC, though it is not clear when this cost over $100 million . However, the facility remained would be incurred . open because the administration later determined We note that it would likely take at least a year that CRC’s capacity was needed to comply with the before CRC could be closed . As such, the above population cap . (CRC has a design capacity of about savings would likely not be realized until at least 2,500—allowing the state to house 3,400 inmates at 2019-20 or later . In addition, it is possible that closing the overcrowding limit of 137 .5 percent—and currently CRC could actually increase costs somewhat relative houses about 2,600 inmates .) to the Governor’s proposal during the period when As part of the 2015-16 Budget Act, the Legislature CRC is being closed . This is because until CRC is fully required the administration to provide an updated closed, the department would experience less savings comprehensive plan for the state prison system, from removing inmates from CRC than from contract www.lao.ca.gov 11 analysis full gutter 2018-19 BUDGET facilities . The precise fiscal effect of closing CRC in the classification of the parolees supervised by the agent . short term is unknown and would depend primarily For example, parole agents who supervise general on (1) how the court adjusts the prison population felons typically have a caseload of around 55 parolees, cap during the time that CRC is being shut down while parole agents who supervise high-risk sex and (2) how quickly the department is able to achieve offenders have a caseload of around 20 parolees . operational savings at CRC as it reduces the prison’s Direct-Supervision Positions Are Annually population . However, we estimate that this short-term Adjusted Based on Parolee Population. For most reduction in savings relative to the Governor’s plan types of direct-supervision positions (such as parole would be unlikely to exceed the low tens of millions for agents and their supervisors), the department annually a couple of years . requests the level of funding and positions required to ensure that each classification of parolees receives LAO Recommendation appropriate levels of supervision, rehabilitation In view of the significant ongoing savings that programs, and mental health treatment . The level could result from closing CRC rather than the Arizona requested is based on a budgeting methodology that contract facility, we recommend that the Legislature utilizes specific staffing ratios and takes into account consider directing CDCR to close CRC . If the the size and composition of the parolee population . Legislature decides to close CRC, we recommend An increase in the parolee population would require requiring CDCR to provide a detailed plan on the additional positions and funding, and a decline in the closure . If the Legislature decides not to close CRC, population would result in a need for less resources CDCR should provide a plan for making the necessary compared to the previous year . For example, if the infrastructure improvements at the prison . number of high-risk sex offender parolees is estimated to increase by 20, the staffing ratios would indicate PAROLE STAFFING PROPOSALS that one additional parole agent is needed for the coming year . Increases in the number of parole agents LAO Bottom Line. We recommend the department in turn result in the need for other positions based on utilize a budgeting methodology that is based on certain ratios—such as one additional supervisor for specific staffing ratios, as well as takes into account every eight additional parole agents . Increases in the the size and composition of the parolee population, to parolee population also generate the need for operating annually adjust the total number and type of positions expenses and equipment, such as a GPS monitoring needed each year to operate the state’s parole device that each additional high-risk sex offender system—not just for direct-supervision positions as is parolee is required to wear . currently the case . We recommend that the Legislature Support Positions Not Annually Adjusted Based require CDCR to report at budget hearings on a on Parolee Population. In order to assist the work timeline for incorporating support staff into its annual that parole agents do in the field, DAPO employs staffing adjustments . Pending such a report from the various support positions that do not involve the direct department and the availability of updated parolee supervision of parolees—such as human resources projections that could change the level of positions analysts, some office technicians, and sign-language needed, we withhold recommendation on the proposed interpreters . Some of these positions are located at staffing requests until the May Revision . headquarters in Sacramento, while others are located across DAPO’s 50 field offices . Similar to most other Background parole positions, the need for support positions is Parolees Receive Different Levels of Supervision driven by changes in the parolee population . For Based on Classification. CDCR’s Division of Adult example, if the parolee population increases, there Parole Operations (DAPO) classifies parolees into would be a greater need for human resource analysts to different classifications depending on the level of process a potential increase in the number of workers’ supervision they require, which is based on various compensation claims resulting from the additional factors such as their criminal history . As a result, the parole agents hired to supervise parolees . Conversely, caseload of a parole agent primarily depends on the if the parolee population declines, CDCR would need 12 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET fewer human resource analysts to process workers’ this estimate could change in May based on updated compensation claims . In other words, these positions projections of the parolee population . are in effect based on ratios similar to direct-supervision Requested Support Positions Will Not Be positions . We note, however, that the department Adjusted Annually in Future Years. While the makes requests for support positions on an ad-hoc budgeting methodology for the proposed support basis rather than annually adjusting these positions for positions takes into account the projected size of changes in the parolee population like it does for its the parolee population in 2018-19, it would not positions that involve the direct supervision of parolees . be annually adjusted as would be the case for the Parolee Population Expected to Increase requested direct-supervision positions . If these Temporarily Due to Proposition 57. As we positions were adjusted on an annual basis, similar to discussed earlier in this report, the average the direct-supervision positions, it would lead to a more daily parolee population is projected to increase complete accounting of the need for them . to 49,800 in 2018-19, an increase of about LAO Recommendations 2,800 parolees (6 percent) from 2017-18 . The population is expected to continue increasing until it In view of the above, we recommend the department reaches a peak of 51,000 parolees in 2019-20 . This utilize a budgeting methodology that is based on increase is largely driven by Proposition 57 . However, specific staffing ratios, and takes into account the this increase is expected to be temporary and the size and composition of the parolee population, to parolee population is expected to decline by 1,000 (or annually adjust the total number and type of positions 2 percent) from 2019-20 to 2021-22 . needed each year—not just for direct-supervision positions . We recommend that the Legislature require Governor’s Proposal the department to report at budget hearings on a The Governor’s budget proposes a $23 million timeline for incorporating support staff into the annual General Fund augmentation and 94 additional parole staffing adjustment . Pending such a report from direct-supervision positions due to the projected the department and the availability of updated parolee increase in the parolee population in 2018-19 . The projections that could change the level of positions budget also proposes a $2 .3 million General Fund needed, we withhold recommendation on the proposed augmentation and 23 additional support positions . This staffing requests until the May Revision . reflects a 4 percent increase in the number of these positions from the current-year level . The proposed WAGE INCREASES FOR support positions include analysts, a sign-language INMATE WORKERS ASSIGNED TO interpreter, and office technicians . According to the FACILITY MAINTENANCE JOBS department, these positions are necessary to account for increased workload related to the additional LAO Bottom Line. The Governor’s budget proposes direct-supervision staff proposed for 2018-19, as a $1 .8 million General Fund augmentation for CDCR well as workload associated with direct-supervision to increase wages for facility maintenance inmate positions provided in prior years . workers to equal those provided by other employment programs available to inmates, with the intention that LAO Assessment this would allow the department to hire sufficient inmate Staffing Requested for 2018-19 Seems workers to reduce its maintenance backlog . We find Appropriate. As discussed above, the department’s that additional information is needed in order for the budgeting methodology for direct-supervision and Legislature to assess the potential effectiveness of support positions are in effect based on staffing ratios the proposal and whether other actions are needed that take into account the projected size of the parolee to fully address CDCR’s maintenance backlog . As population for 2018-19 . Accordingly, we find that the such, we recommend that the Legislature direct requested direct-supervision and support positions the administration to report during budget hearings are appropriate based on the estimated parolee on specified information (such as how it plans to fill population for 2018-19 at this time . We note, however, its vacant civil service positions who also perform www.lao.ca.gov 13 analysis full gutter 2018-19 BUDGET maintenance work) and withhold action on the These inmates earn between $0 .08 and $0 .37 per Governor’s proposal until it receives this information . hour and generally do not receive credits or participate in formalized training programs through Background their job . Inmate workers assigned to facility Employment Opportunities for Inmates. Inmates maintenance jobs work under the supervision of have various opportunities for employment while civil service tradespersons on the maintenance incarcerated . Generally, inmate jobs fall into three of prisons’ mechanical, electrical, and plumbing categories: systems . Facility maintenance inmate workers use many of the same skills as some inmate workers • California Prison Industry Authority (CalPIA). in IWL and CalPIA positions . CalPIA is a semiautonomous state agency that provides work assignments and vocational CDCR Reports Backlog in Prison Maintenance. training to inmates and is funded primarily through CDCR employs civil service tradespersons—such the sale of the goods and services produced as plumbers, electricians, and carpenters—along by these inmates . Many of these goods are with facility maintenance inmate workers to maintain purchased by state agencies . CalPIA has the its prisons . The department reports that it currently capacity to employ about 7,800 inmate workers has a backlog in maintenance work orders and that across 34 prisons who earn between $0 .35 and CDCR’s Office of Audits and Court Compliance and $1 .00 per hour . However, it reports that roughly the Department of Public Health have repeatedly 30 percent of these positions are currently vacant . cited CDCR for noncompliance with preventative While in CalPIA positions, inmates can participate maintenance policies . in pre-apprenticeship programs and gain The department argues that the above backlog certification in various career fields, making them is primarily due to two factors . First, the department more qualified to be hired for apprenticeships or indicates that there is a lack of inmate workers to other entry-level positions upon release . When help complete the maintenance work on a routine inmates complete these training programs, they basis . Specifically, the department reports that generally earn credits that reduce the amount 656 of its 2,834 (23 percent) inmate positions in of time they must serve in prison . For example, facility maintenance are currently vacant . Moreover, inmates who complete CalPIA’s dental technician CDCR believes that the higher wages, credit earning training program earn four weeks off of their opportunities, and formalized training programs offered sentence . by CalPIA and IWL for often similar types of work • Inmate Ward Labor (IWL) Program. CDCR’s attract inmates away from facility maintenance jobs . IWL program hires inmates to work on capital Second, CDCR indicates that it has been unable to hire outlay and repair projects at its prisons . These sufficient numbers of civil service facility maintenance inmates are employed by IWL for the duration of workers . In 2016-17, the department reported that a particular project and learn various skills, such it had nearly $19 million in savings from civil service as roofing or building foundation pads, depending facility maintenance vacancies . on the nature of the project . When working for Governor’s Proposal IWL, inmates earn between $0 .35 and $1 .00 per hour . In addition, some IWL inmate workers The Governor proposes a $1 .8 million General participate in IWL’s pre-apprenticeship program Fund augmentation in 2018-19 for CDCR to increase through which they earn seven weeks off of their wages for facility maintenance inmate workers to equal prison sentence . About 1,300 inmates and wards those received by CalPIA and IWL inmate workers— participated in IWL projects in 2017 . specifically from between $0 .08 and $0 .37 per hour • Other Inmate Jobs. CDCR employs inmates to between $0 .35 and $1 .00 per hour . CDCR expects to support prison operations in various ways, that the proposed wage increase would attract inmates including cleaning and maintaining facilities, who would otherwise have chosen CalPIA or IWL jobs providing clerical support, and grounds keeping . 14 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET to facility maintenance jobs and allow it to reduce its • Potentially increase recidivism rates to the maintenance backlog . extent that participation in IWL and CalPIA training programs is more effective at reducing LAO Assessment recidivism than facility maintenance jobs, given Proposal May Not Effectively Attract Inmates that the pre-apprenticeships these programs offer Away From CalPIA and IWL. Under the Governor’s potentially make inmates more employable upon proposal, facility maintenance inmate workers would release receive the same wages as CalPIA and IWL workers . Proposal May Not Increase Available Inmate However, CalPIA and IWL workers would continue to Labor Pool. While attracting inmates away from CalPIA have access to other benefits—such as credits and and IWL to facility maintenance jobs (as proposed by pre-apprenticeship programs—that facility maintenance the administration) could be one way to help ensure workers would not . Accordingly, it seems reasonable that there are enough inmate workers to complete that many inmates would still choose CalPIA and IWL routine maintenance work, it is not the only way . For jobs rather than facility maintenance jobs . Moreover, example, it is possible that the proposed increase in the incentive that would be created by the proposed wages could prompt inmates who are not currently pay increase could be reduced if CalPIA subsequently employed in CalPIA or IWL but who have skills in chose to raise its wages . We also note that if the relevant trades to seek out facility maintenance jobs . proposal only results in a few additional facility That is, the wage increase would expand the overall maintenance inmate workers, the department would labor pool of workers . However, CalPIA vacancies be paying all facility maintenance inmate workers— suggest that this would be unlikely to occur . This is including existing ones who choose to work at current because despite offering a pay rate identical to the one wage levels—more for a relatively modest impact on proposed by the department for facility maintenance the size of the prison maintenance workforce . inmate workers (along with other nonpay benefits), If Effective, Wage Increase Could Generate Other CalPIA has a vacancy rate of roughly 30 percent . Costs and Concerns. If the proposed wage increase This suggests that most or all of the inmates who are is effective in attracting inmates to facility maintenance eligible and willing to work at CalPIA’s pay rate are jobs—as intended by the administration—the already doing so . Accordingly, it appears likely that department expects that the number of inmates in IWL the Governor’s proposal would not be effective in and CalPIA positions would decline . This could have expanding the labor pool . a number of potentially unintended consequences . Proposal Does Not Address Shortage in Civil Specifically, a reduction in inmate labor available to Service Maintenance Staff. As discussed above, CalPIA and IWL could: CDCR indicates its current maintenance backlog • Increase capital outlay costs to the extent that is partly due to the difficulty of hiring civil service CDCR needs to hire additional contractors to maintenance workers . Since the Governor’s proposal complete capital outlay projects that would have does not address this issue, the extent to which the otherwise relied on IWL inmate workers . proposal would effectively reduce CDCR’s maintenance backlog is uncertain . For example, if the majority of the • Reduce the amount of goods and services backlog is caused by a lack of civil service workers, produced by CalPIA, which could result in CDCR then the proposed wage increase for inmate workers and other state departments needing to purchase would not have more than a modest impact on the goods from other suppliers at a higher cost . backlog . Furthermore, it is unclear how the department • Increase the prison population to the extent that plans to use savings from civil service maintenance a reduction in the number of inmates participating vacancies and whether a portion of the savings could in IWL and CalPIA training programs reduces the be used to pay for the proposed inmate wage increase . amount of credits these inmates earn, thereby increasing the amount of time they spend in prison . www.lao.ca.gov 15 analysis full gutter 2018-19 BUDGET LAO Recommendation Housing Units (SHU) are used for longer-term restricted housing placements, while Administrative Segregation In view of the above concerns, we recommend that Units (ASU) are used for shorter-term placements . While the Legislature require the department to report at in these units, inmates’ freedom of movement and budget hearings on the following information: (1) why interaction with other inmates is substantially restricted . it thinks that the proposed wage increase would result When Enhanced Outpatient Program (EOP) in fewer facility maintenance inmate worker vacancies; inmates—those diagnosed with serious mental (2) how it plans to mitigate potential unintended disorders but do not require inpatient treatment— consequences of the proposal, including increased receive SHU terms, they are housed in a Psychiatric capital outlay costs, a higher prison population, and Services Unit (PSU) . (About 6 percent of the inmate increased recidivism rates; (3) the number of civil population is part of EOP and, thus, must be housed service maintenance worker vacancies; (4) how CDCR separately from the general inmate population .) A PSU has spent the savings resulting from those vacancies is intended to provide EOP services to inmate-patients in recent years and whether a portion of such savings in a maximum security setting . Similarly, EOP inmates could be used to increase inmate worker pay; and requiring short-term segregation are placed in ASUs (5) what steps it is taking to address the civil service designated to provide EOP care known as ASU-EOPs . staffing shortage, such as increasing advertising or Alleged Staff Misconduct at SAC. In 1995, using contractors . This information would help the a federal court ruled in a case now referred to as Legislature assess the potential effectiveness of the Coleman v. Brown that CDCR was not providing Governor’s proposal and whether other actions— constitutionally adequate mental health care to its beyond those proposed by the Governor—are needed inmates . As a result, the court appointed a Special to effectively help reduce CDCR’s maintenance Master to monitor and report on CDCR’s progress backlog . Accordingly, we recommend that the towards improving mental health care . In fall 2016, a Legislature withhold action on the Governor’s proposal Special Master monitoring team documented numerous until it receives the above information . allegations of officer misconduct by EOP inmates in restricted housing at SAC . The allegations included VIDEO SURVEILLANCE AT physical abuse, denial of food, verbal abuse, tampering CALIFORNIA STATE PRISON, with mail and property, inappropriate response to SACRAMENTO suicide attempts or ideation, and retaliation for reporting misconduct . LAO Bottom Line. We recommend that the The monitoring team recommended that CDCR Legislature withhold action on the Governor’s proposal install surveillance cameras in all PSUs or place body to implement video surveillance in certain housing units cameras on all custody officers who work in these units . at California State Prison, Sacramento (SAC) until the According to the team, these measures should reduce evaluation of the video surveillance system at High the use of excessive force, help resolve allegations of Desert State Prison (HDSP) is completed this spring . excessive force, and increase officer accountability . The In addition, we recommend that the Legislature direct monitoring team also recommended that CDCR screen CDCR to report at spring budget hearings on other staff for their suitability to work with the PSU population strategies is developing to address the concerns about and provide them with additional training focused on staff misconduct at SAC . mental health issues and crisis intervention . Background Video Surveillance at CDCR Institutions. The 2017-18 Budget Act provided $11 .7 million for CDCR Restricted Housing for Inmates With Mental to implement comprehensive video surveillance Illness. CDCR uses restricted housing units to at HDSP and Central California Women’s Facility temporarily house inmates who have committed a (CCWF) . The administration expects these surveillance serious violation or whose presence in a less restricted systems to provide objective evidence with which to environment poses a threat to themselves, others, or investigate inmate allegations against staff, reduce the integrity of an investigation . In general, Security inmate misconduct, and reduce attempted suicides . 16 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Researchers at the University of California, Irvine are that the evaluation report is available to inform the currently conducting an evaluation of video surveillance Legislature’s deliberations on the 2018-19 budget, on one yard at HDSP . Among other metrics, the we also recommend that the Legislature require the researchers are monitoring inmate complaints against administration to provide it with the results of the staff, use-of-force incidences, inmate misconduct, and HDSP evaluation prior to the May Revision . We further suicide attempts . The evaluation findings are expected recommend requiring CDCR to report at spring budget to be released in spring 2018 . Several of CDCR’s other hearings on other strategies it is developing to address prisons currently have video surveillance with varying the concerns at SAC, such as ensuring that staff are degrees of institutional coverage . For example, both the adequately trained to work with inmates in the PSU and California City Correctional Facility and the California ASU-EOP units . Health Care Facility have video coverage of all facilities, yards, and housing units . VENTURA TRAINING CENTER Governor’s Proposal LAO Bottom Line. We recommend that the Legislature reject the Governor’s proposal to convert The Governor’s budget proposes $1 .5 million from the existing Ventura conservation camp for inmates the General Fund on a one-time basis in 2018-19 for into a new Ventura Training Center that would provide a CDCR to purchase an audio/video surveillance system firefighter training and certification program for parolees . for the PSU and ASU-EOP at SAC . Under the proposal, We find that the proposed program is unlikely to be $177,000 would be needed annually beginning in the most cost-effective approach to reduce recidivism . 2019-20 to operate and maintain the equipment . To the extent that reducing recidivism is a high priority Similar to the systems at HDSP and CCWF, CDCR for the Legislature, it could redirect some or all of expects the proposed cameras to provide objective the proposed funding to support evidence-based evidence with which to investigate inmate allegations rehabilitative programming for offenders in prison and against staff, reduce violent incidents, and reduce when they are released from prison . Similarly, the attempted suicides . Legislature could explore if other options are available Premature to Expand Video Surveillance to provide the California Conservation Corps (CCC) Before Evaluation Complete corpsmembers training opportunities, to the extent it is interested in doing so . While video surveillance at SAC could prove to be a worthwhile investment, we find it premature to expand Background its use at additional prisons until the evaluation of video Offender Rehabilitation Programs Intended surveillance at HDSP is completed this spring . The to Reduce Recidivism. Research has shown that results of the evaluation could shed light on whether certain criminal risk factors are particularly significant video surveillance can be effective at addressing the in influencing whether or not individuals commit new issues identified at SAC, since many similar issues crimes following their release from prison (known as have been identified at HDSP . In the meantime, the recidivating) . For example, individuals who have low department should focus on developing other strategies performance, involvement, and satisfaction with school to address the concerns at SAC, such as ensuring and/or work are more likely to recidivate than individuals that staff in these units are adequately trained to work who do not exhibit these characteristics . Research also with inmate-patients as was recommended by the shows that rehabilitation programs (such as substance monitoring team . use disorder treatment and employment preparation) LAO Recommendation can be designed to address specific criminal risk factors . For example, employment counseling programs We recommend that the Legislature withhold can help reduce or eliminate the criminal risk resulting action on the Governor’s proposal to implement from an offender’s low involvement in work . In addition, video surveillance at the PSU and ASU-EOP at SAC research suggests that programs are most effective until the evaluation report on the surveillance system in reducing recidivism when they are targeted at at HDSP is available in spring . In order to ensure www.lao.ca.gov 17 analysis full gutter 2018-19 BUDGET individuals who have a high risk of recidivating due U .S . Forest Service employs roughly 10,000 firefighters to factors that could be addressed with rehabilitation for fire protection in national forests . programs . (For more information on the key criminal risk State Conservation Camps Provide Inmate factors and principles for reducing recidivism, please Firefighter Hand Crews. While in prison, certain see our recent report, Improving In-Prison Rehabilitation inmates have the opportunity to serve as inmate Programs .) firefighters as part of a hand crew and live in a State Provides Various Rehabilitation Programs conservation camp jointly operated by CDCR and to Parolees. Prior to an inmate’s release from prison, CalFire (rather than remain in a prison facility) . (Hand CDCR generally uses assessments to determine how crews are usually made up of 17 firefighters that cut likely the inmate is to recidivate as well as what criminal “fire lines”—gaps where all fire fuel and vegetation is risk factors he or she has . The department uses this removed—with chain saws and hand tools .) Inmates information to target many of its rehabilitation programs qualify for camps if CDCR has determined they (1) can once the inmate is released and supervised by state be safely housed in a low-security environment, (2) can parole agents in the community . The 2017-18 budget work outside a secure perimeter under relatively low included $215 million to support various parolee supervision, and (3) are medically fit for conservation rehabilitation programs . One such program is the camp work . CDCR makes this determination generally Specialized Treatment for Optimized Programming based on various factors, including the nature of the (STOP), which provides a range of services, such as crimes inmates are convicted of, their behavior while substance use disorder treatment, anger management in prison, and the time they have left to serve on their training, and employment services to parolees . To be sentence . CDCR provides correctional staff at each eligible for STOP, parolees must have a moderate to camp who are responsible for the supervision, care high risk of reoffending and be identified as having a and discipline of inmates . CalFire maintains the camp, criminal risk factor that can be addressed by services supervises the work of the inmate fire crews, and is available through the program . responsible for inmate custody while they are working . Multiple Agencies Have Professional Firefighter Currently, CalFire maintains 39 conservation camps Crews. The California Department of Forestry and Fire statewide that have the capacity to house more than Protection (CalFire) employs over 7,000 firefighters 4,300 offenders . (One of these camps houses juvenile each year during fire season . Of those, about 1,700 offenders .) As of January 10, 2018, there were about are seasonal firefighters, classified as “Firefighter I,” 3,500 adult inmates housed in conservation camps . CalFire’s entry-level firefighter classification . A Each camp costs roughly $2 .4 million to operate Firefighter I is a temporary employee who is hired only annually, or about half a million dollars per hand crew . for the duration of the “fire season”—the period of Inmates on hand crews receive basic training that time when fires are most likely to occur at the greatest consists of a week of classroom training and a week of intensity . Individuals are usually hired in April, May, or field training that covers wildland fire safety and attack, June—as CalFire increases staffing for the fire season— hand tool use, teamwork, and crew expectations . Once and work for up to nine months, depending on the assigned to a fire crew, inmates continue to receive duration and intensity of the season . More experienced training in things like cardiopulmonary resuscitation and firefighters can apply to become a Firefighter II—a emergency response, with some progressing to more permanent employee . Both types of firefighters typically responsible positions on the crew, such as a chainsaw staff “engine crews,” which are made up of a fire engine operator . and three to four firefighters, as well as an engine CCC Provides Fire Crews and Support. The operator . CCC maintains seven fire crews that are staffed by Federal and local agencies also operate fire crews . corpsmembers and typically train and operate under Some larger local agencies, such as the Los Angeles the supervision of CalFire Fire Captains . While assigned County Fire Department, provide their own wildfire to wildfires, the crews are utilized primarily to construct protection . However, many agencies mostly respond fire lines . Fire crews also may assist fire engine to structure fires rather than wildfires . In addition, the crews and work after a fire is contained to extinguish any remaining hot spots . After a fire is completely 18 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET extinguished, crews are used for post-fire restoration at the training center would be housed separately from work such as reseeding . According to CalFire, each parolees but could participate in trainings together with crew costs about $1 million to operate annually . them . Provide Funding to Operate Program. The Governor’s Proposal Governor requests $7 .7 million from the General Fund Establish Ventura Training Center to Provide and 12 .4 positions in 2018-19 to implement and Firefighter Training and Certification for Parolees. operate the program . Under the proposal, $6 .3 million The Governor proposes to convert the existing Ventura from the General Fund and 12 .4 positions would conservation camp for inmates into a new Ventura be needed to operate the program in 2019-20 and Training Center that would provide a firefighter training annually thereafter . The $7 .7 million proposed for and certification program for parolees . (The inmate 2018-19 would be allocated as follows: firefighter hand crews currently based at the Ventura • CalFire ($2 Million). These resources would conservation camp would be relocated to other state allow CalFire to purchase equipment and training conservation camps .) Upon full implementation, the materials for trainees, make facility repairs, and program would accommodate 80 parolees, selecting hire 24-hour site security services . in most cases from those who had served as inmate • CDCR ($2.1 Million).These resources would firefighters in a conservation camp prior to their release be used by CDCR to provide 1 .4 parole agents from prison and were nominated for the program by to supervise parolees at the new Ventura CalFire and CDCR staff . Training Center and six other staff—including Parolees would be enrolled in the program for a total a groundskeeper, custodian, and cooks—to of 18 months . According to the administration, program operate the training center . In addition, CDCR participants would be paid and receive (1) 3 months of would receive funds to contract with a nonprofit classroom instruction in basic forestry and firefighting, organization to provide case management and (2) 3 months of industry-recognized firefighting training other services to participants . and certification (while also being available to support • CCC ($3.5 Million). The bulk of these resources fire suppression and resource management efforts as would be used to pay the salaries of parolee needed), and (3) 12 months of full-time assignment as participants in the program, which are estimated part of an engine crew . The administration indicates that to be $2 .2 million annually . Under the proposal, upon completion of the program, participants would CCC would provide payroll services for the have the experience and certifications to apply for parolees in the program . (The CCC has a payroll entry-level firefighting jobs with local, state, and federal system that is designed to meet the needs of firefighting agencies . The administration proposes a short-term, non-civil service workforce .) The to contract with a nonprofit organization to provide CCC also requests five positions to perform participating parolees with life skills training, reentry payroll functions and to provide supervision of and counseling services, and job placement assistance corpsmembers while they are at the training to help them maximize their scoring capabilities in center . hiring processes and assist them with other challenges related to reentry . Participants would also have access Make Infrastructure Improvements. In addition, to high school courses through CCC’s existing contract the budget includes $1 .1 million from the General Fund with the John Muir Charter School . in 2018-19 to develop preliminary plans for renovating Allow Some CCC Corpsmembers to Participate the existing conservation camp to meet the needs of in Selected Trainings. In addition to parolees, the the proposed program . Specifically, these renovations program would allow up to 20 CCC corpsmembers at would (1) replace and upgrade existing facilities (such a time to participate in select trainings and certification as the staff barracks and equipment storage facilities), opportunities to be identified by CCC and CalFire . The (2) add privacy to showers and bathrooms in existing amount of time the corpsmembers would spend at the dormitories, (3) construct a separate dormitory training center could vary from a week up to a month for female participants, (4) construct additional or more . The administration reports that corpsmembers administrative and classroom space, and (5) build a www.lao.ca.gov 19 analysis full gutter 2018-19 BUDGET gym for staff . The proposed renovations are expected recidivism rates for inmates released from conservation to cost a total of $18 .9 million . camps, we expect that these inmates would be among Recidivism Reduction Is Primary Goal. The the least likely in CDCR to recidivate . Moreover, the administration indicates that the primary goal of the administration indicates that conservation camp proposed program is to reduce recidivism by helping inmates would be nominated by CalFire and CDCR staff ex-offenders gain employment as firefighters . However, for the program based on their nonviolent behavior and the proposal also suggests that because trainees conformance to rules while incarcerated . This further would be available to assist with emergency response, suggests that program participants would already the program could potentially increase firefighting have relatively low risks of recidivism and low needs for resources . rehabilitative programming . Accordingly, we find that the proposed target population is both inconsistent LAO Assessment with best practices and with CDCR’s own efforts to target rehabilitation programs to high-risk, high-need While providing additional resources to reduce offenders . recidivism could be a worthwhile investment, we find that the Governor’s proposal raises several concerns . Unlikely to Lead to Employment. The Specifically, we find that the proposal (1) is not evidence administration indicates it has not performed any based; (2) would not target high-risk, high-need type of labor market analysis or survey to determine individuals; (3) would be unlikely to lead to employment potential demand for graduates of the program . We for participants; (4) would likely not be cost-effective; note, however, that seeking employment as a CalFire and (5) includes resources that are not fully justified . firefighter is very competitive . While CalFire was not We also find that providing additional training to CCC able to provide information on the ratio of applicants members could be achieved in other ways . to position openings in time for our analysis, some news outlets have reported only a few percent of Not Evidence Based. Research shows that applicants being hired . The minimum qualifications rehabilitation programs that are evidence based are for a Firefighter I require a candidate to be at least most likely to be effective at reducing recidivism . To 18 years old and have a high school diploma or its be evidence based, a program must be modeled after equivalent . However, the department indicates that a program that has undergone rigorous evaluations many applicants are returning Firefighter I’s who have showing that it reduces recidivism . However, the previous experience working as seasonal firefighters administration has not provided examples of any other and many have an Emergency Medical Technician firefighter training programs that have been found to certification (which is extremely difficult for a convicted reduce recidivism . Accordingly, it is unclear whether the felon to obtain) . Parolees would likely have difficulty proposed intervention model has ever been found to competing with such applicants . Moreover, the be effective elsewhere . Furthermore, the administration California Department of Human Resources requires is not proposing a feasibility study, pilot, or sufficiently the firefighter hiring process to be competitive— rigorous evaluation plan for the program . As a result, meaning the department does not have the authority it unclear how the administration would know if the to directly hire those who complete the program . While proposed program were successful once it was it is possible that program participants could apply for implemented . firefighter positions with local and federal agencies, Not Targeted to High-Risk, High-Need Parolees. the availability of such positions statewide is unknown . As discussed above, research suggests that However, the information on specific agencies that is rehabilitation programs are most likely to be successful available suggests that firefighter hiring at the local level when targeted at high-risk, high-need individuals . is equally competitive, if not more so . For example, a However, the administration plans to primarily recruit RAND Corporation study found that the Los Angeles parolees who served as inmate firefighters in a Fire Department had upwards of 13,000 applicants for conservation camp prior to their release from prison . fewer than 100 jobs in 2013 . These parolees tend to be of low risk to the community Unlikely to Be Cost-Effective. We also find that it and have demonstrated a willingness and ability to is highly unlikely that the proposed program would be work hard . Although CDCR does not separately track 20 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET the most cost-effective way to reduce recidivism . This In addition, it is unclear why CCC requires five is because the level of funding proposed to operate the additional staff if its main responsibility would be to program on an ongoing basis appears quite expensive provide pay and benefits to 80 program participants . relative to other rehabilitation programs . Specifically, Furthermore, the program is expected to accept its the proposed program would cost $6 .3 million first participants on October 1, 2018, yet the proposed annually to operate, or about $80,000 per parolee . capital outlay project—which the administration argues However, research suggests that there are a variety of is necessary to operate the program—is not expected programs—such as substance use disorder treatment to be completed until May 2022 . The administration and academic education—that could reduce recidivism indicates that it plans to gradually ramp up the program at a much lower cost . For example, with the $6 .3 million population and utilize existing facilities and temporary requested by the Governor, we estimate for illustrative structures until the renovations are complete . However, purposes that CDCR could instead provide cognitive it has not provided a timeline for the planned rollout, nor behavioral therapy—treatment that costs about has it provided adequate justification for why it needs $1,200 per inmate and has been shown elsewhere to to fully staff the program before it will be running at full reduce recidivism—to over 5,200 inmates annually— capacity . nearly 100 times the number that would be treated Other Options Available to Provide CCC annually under the proposal . In view of the above, there Corpsmembers Training Opportunities. The CCC are likely more cost-effective ways to reduce recidivism has a long-established relationship with CalFire and than the Governor’s proposal . actively collaborates with CalFire to train fire crews . This concern is compounded by the fact that the The CCC and CalFire could identify other options administration is proposing to make a large capital to allow additional corpsmembers to participate in investment at the Ventura conservation camp to select trainings and certification opportunities in the renovate and construct facilities to meet the specific absence of the Ventura Training Center . This could needs of the proposed program . This is a substantial include holding such trainings at CalFire facilities or up-front cost, particularly for a program that appears at residential centers that serve as a hub for CCC unlikely to be effective and has not been tested through training activities . Another possibility is to increase a pilot or feasibility study . (We note that expansion of corpsmember options to access firefighter-related other rehabilitative programs also can involve capital training provided by community colleges . investments .) LAO Recommendation Various Resources Requested Have Not Been Fully Justified. At the time of this analysis, In view of the above concerns, we recommend the administration was not able to provide sufficient that the Legislature reject the Governor’s proposal to justification for some of the workload resources being convert the existing Ventura conservation camp for requested . For example, the role of and need for the inmates into a new Ventura Training Center that would additional parole agents proposed are unclear . On provide a firefighter training and certification program for the one hand, if these parole agents would provide parolees . The Legislature could instead redirect some or specialized services or a higher level of supervision for all of the proposed funding to support evidence-based the 80 parolees at the Ventura Training Center, then rehabilitative programming for offenders in prison the department might need some additional staffing . and when they are released from prison . (For more On the other hand, if these parole agents would information on evidence-based programs and the need provide essentially the same supervision and services to improve CDCR’s existing programs, please see as the general parolee population receives, then it is our recent report Improving In-Prison Rehabilitation unclear why the additional parole agents are needed . Programs .) Similarly, the Legislature could explore The Governor’s budget includes funding for CDCR to other options that are available to provide CCC supervise the entire projected parole population for corpsmembers training opportunities, to the extent it is 2018-19, which includes the 80 parolee participants . interested in doing so . www.lao.ca.gov 21 analysis full gutter 2018-19 BUDGET INNOVATIVE PROGRAMMING the end of the current year and $3 million at the end of the 2018-19 budget year . GRANTS Governor’s Proposal LAO Bottom Line. The Governor’s budget proposes $4 million in ongoing funding to support the Innovative Provide Ongoing Funding. The Governor’s budget Programming Grants program, which is currently proposes $4 million in ongoing funding from the funded with limited-term funding that will partly expire at Inmate Welfare Fund (IWF) to support the Innovative the end of the current year . In contrast to prior funding Programming Grants program . (The IWF receives for the program, the Governor proposes to focus most proceeds from the operation of inmate canteens and of the proposed funds on reducing recidivism . We hobby shops, which is used to provide various goods find that the Governor’s approach is a step in the right and services that benefit inmates .) We note that the direction, but recommend the Legislature allocate all IWF has been used in the past to support the program . of the proposed funding towards reducing recidivism . The Governor’s proposal would bring the total level of In addition, we recommend that the Legislature direct funding for the program to $7 million in 2018-19, with the department to focus its scoring methodology for $3 million being one-time in nature . awarding funds on recidivism reduction . Change Program Goals to Primarily Focus Funds on Reducing Recidivism. The Governor proposes Background to allocate the proposed $4 million from IWF in a The Innovative Programming Grants program, different manner than in prior years, though the grants which is administered by CDCR, allocates grants would continue to support volunteer-run programs . to nonprofit organizations to support volunteer-run (We note that the one time $3 million in General Fund programs in prisons . The types of services provided for the program would continue to be allocated under by the programs vary—from prison gardening the current process .) Specifically, the administration programs to education programs . Since the program states that 65 percent (or $2 .6 million) of the proposed was established in 2014-15, the program’s goals, $4 million would be allocated to “promising-practice structure, and funding level and source have changed . programs” based on known factors of effective At its inception, the primary goal of the program was programming that are associated with reducing to increase the number of volunteer-run programs at recidivism . According to CDCR, it is currently working prisons with relatively few of these programs . However, with a consultant to develop a scoring methodology to more recently, the program has primarily focused on guide the approval of applicants and awarding of these rehabilitating offenders by helping them understand funds . The remaining 35 percent ($1 .4 million) of the and address the harm they have done (also referred proposed funds would be allocated to “practice-based to as “restorative justice” or “offender responsibility” programs .” Under the proposal, these would be programs) . programs that CDCR believes have a positive impact, In each year since 2014-15, the level of funding which may or may not include elements associated for the program has fluctuated—from a low of with reducing recidivism . Grant recipients would $2 .5 million to a high of $8 .5 million—with an average receive funding for three years, but could apply for a of $5 .6 million over the period . We also note that subsequent grant after the three years . the funding provided to the program has been on a LAO Assessment limited-term basis (meaning the department had to request additional funding for the program when the Focusing on Reducing Recidivism Is a Step limited-term funding expired) . To date, the department in the Right Direction . . . As discussed earlier, the has allocated $22 .5 million in program grants to goals of the Innovative Programming Grants have nonprofit organizations . The fund source used to evolved over the years, which has made it difficult to support the program each year has also changed . assess and compare the different activities that have For the current year, the 2017-18 budget included been funded . Moreover, prior program goals have $8 .5 million in limited-term funding from the General been too broad, which in some cases can make it Fund for the program—$5 .5 million that will expire at difficult to prioritize limited resources . We find that the 22 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Governor’s approach of primarily focusing the program methodology on recidivism reduction . In other on the goal of reducing recidivism is a step in the right words, a program’s ability—based on the specific direction in having a specific goal for the program . activities that would be funded—to reduce the Moreover, if programs are successful at reducing recidivism rates of participating inmates should be recidivism, they not only can reduce crime but also the primary factor of consideration . Similarly, we can result in various fiscal benefits to the state, such recommend the Legislature direct the department as reduced incarceration costs . (For more information to award subsequent grants based on the extent on the benefits of reducing recidivism and rehabilitation to which programs actually reduced recidivism programs, please see our recent report, Improving with their previous grant funding . In-Prison Rehabilitation Programs .) . . . But Proposal Not Fully Structured to INMATE MENTAL HEALTH Effectively Reduce Recidivism. As discussed PROGRAMS above, 35 percent of the IWF funding proposed by the Governor would be allocated to programs that may or LAO Bottom Line. We make several may not include elements associated with recidivism recommendations on the Governor’s proposals to reduction . As such, it is possible that programs increase mental health bed capacity and improve how receiving these funds would have no effect on the CDCR manages such beds . First, we recommend the recidivism rate of the inmates they serve . In addition, Legislature provide limited-term funding (rather than while 65 percent of the proposed funds are intended ongoing funding as proposed by the Governor) for to reduce recidivism, until the department finalizes its CDCR to operate 60 mental health “flex beds”, as the methodology for scoring grant applicants, the extent need for additional Mental Health Crisis Beds (MHCBs) to which recidivism reduction will be prioritized in the appears to be temporary . Second, we recommend selection process remains uncertain . We also note the Legislature reject the construction of two MHCB there is no requirement under the Governor’s proposal facility projects, as current projections suggest that they that grant recipients report on the effectiveness of the would not be needed by the time they are in operation . their program at reducing recidivism, which will make Third, we recommend rejecting the proposed resources difficult to determine whether to fund the program in for CDCR to take over the mental health projections subsequent years . currently done by a private contractor . Finally, we LAO Recommendation recommend the Legislature approve the requested staff resources to help the department meet court-approved Modify Governor’s Proposal to Better Ensure guidelines for transferring patients to mental health Funds Reduce Recidivism. In view of the above, we beds . recommend that the Legislature modify the Governor’s proposal in two ways: Background • Allocate All Funds to Programs Likely to Overview of Inmate Mental Health Reduce Recidivism. Rather than only allocating Programs. About one-third of CDCR inmates 65 percent of the funds to programs that are participate in an in-prison mental health program . most likely to reduce recidivism, we recommend The care given to these inmates is subject to the allocating all of the proposed funding this way . oversight of a Special Master appointed as part This would ensure that all the proposed funding is of the Coleman v. Brown case . (In 1995, a federal targeted to reducing recidivism . court ruled in the Coleman case that CDCR was not providing constitutionally adequate mental health • Require Scoring Methodology to Focus on care .) Typically, these inmates can be treated in an Recidivism Reduction. In order to ensure outpatient setting, meaning they live in a prison housing that the department’s scoring methodology for unit and receive regular mental health treatment but awarding funds adequately focuses on programs’ do not require 24-hour care . However, under certain potential to reduce recidivism, we recommend circumstances, some inmates may require more the Legislature direct the department to focus the intensive inpatient treatment . For example, if inmates www.lao.ca.gov 23 analysis full gutter 2018-19 BUDGET are suffering from severe symptoms of a serious inpatient psychiatric beds . By the end of 2016-17, mental health disorder that cannot be managed by an there were 115 inmates on the waitlist for an inpatient outpatient program, they are generally sent to MHCBs, psychiatric program bed . There are two types of which provide short-term housing and 24-hour care inpatient psychiatric program beds: for inmates . If the inmate’s condition is stabilized in • Intermediate Care Facilities (ICFs). ICFs an MHCB, the inmate is generally sent back to his provide longer-term treatment for inmates who or her prison housing unit . If the inmate’s condition require treatment beyond what is provided in requires longer-term, 24-hour care, the inmate may be CDCR outpatient programs . Inmates with lower admitted to an inpatient psychiatric program . Inpatient security concerns are placed in low-custody ICFs, psychiatric programs provide intensive 24-hour care which are in dorms, while inmates with higher with the goal of preparing the inmate to return to security concerns are placed in high-custody an outpatient program . The department determines ICFs, which are in cells . There are 784 ICF beds how many of these beds to operate based on mental in state prisons, 700 of which are high-custody health projections completed by a private contractor— ICF beds . In addition, there are 306 low-custody McManis Consulting—using a methodology approved ICF beds in DSH-Atascadero . Each ICF bed in by the federal court . (The 2017-18 budget includes a state prison costs around $216,000 annually $150,000 for this contract .) These projections are to operate, while each low-custody ICF bed in a used to develop a bed needs study that compares state hospitals costs around $218,000 annually . the department’s mental health bed capacity with its Patients are supposed to be transferred to an ICF current and projected mental health populations . The program within 30 days of referral . department expects to spend around $690 million on • Acute Psychiatric Programs (APPs). APPs various inmate mental health programs in 2017-18 . provide shorter-term, intensive treatment for Below, we discuss both MHCBs and inpatient inmates who show signs of a major mental illness psychiatric programs in greater detail . or higher level symptoms of a chronic mental MHCBs. Due to their immediate need for treatment, illness . Patients are supposed to be transferred inmates identified as needing MHCBs are supposed to to an APP within 72 hours of the referral, but no be transferred to these beds within 24 hours . If a bed more than ten days after the referral . Currently, is not available, alternative accommodations must be there are 372 APP beds, all of which are in state found, such as placing the inmate on suicide watch . prisons . The annual cost of operating one of Under CDCR regulations that have been approved by these beds is $216,000 . the Coleman court, inmates are not supposed to stay in MHCBs for more than ten days . Currently, there are 427 The department also operates 85 beds for women MHCBs for male inmates and 22 MHCBs for female and condemned inmates in state prisons that can be inmates . The annual cost of providing treatment for operated as either ICF or APP beds, including a 45-bed patients in one of these beds is around $345,000 . Due facility for women at the California Institution for Women to the limited number of such beds located throughout in Corona . Due to the specific inmate groups these the state, there is currently a waitlist for these beds . programs serve, the annual cost of operating these By the end of 2016-17, there were 46 inmates on the beds is higher than the above beds at $301,000 per waiting list for an MHCB according to the most recent bed . bed needs study . Patient Referral Process. Once a referral is made Inpatient Psychiatric Programs. Inpatient by clinical staff at one of CDCR’s facilities for an inmate psychiatric programs are operated in both state prisons to enter an MHCB or inpatient psychiatric program and state hospitals . There are a total of 1,621 inpatient bed or be transferred out of an MHCB or inpatient psychiatric beds, with most located in prisons and psychiatric program bed, the department’s Health operated by CDCR . The staffing requirements for these Care Placement and Oversight Program (HCPOP) staff beds are lower than for MHCBs . We note that, prior review the inmate’s file to determine whether the referral to July 2017, the Department of State Hospitals (DSH) is appropriate and identify the least restrictive housing was responsible for operating the vast majority of the environment that can safely house the inmate . In 2017, 24 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET HCPOP was responsible for reviewing 19,000 referrals . increase the total number of mental health beds Currently, HCPOP has five limited-term positions for inmates .) According to the department, these and $900,000 to conduct these reviews, which are beds would be staffed in a manner that allows scheduled to expire on July 1, 2018 . These positions them to flex between being used as high-custody are located at CDCR headquarters so that they can ICF beds, APP beds, or MHCBs . Since MHCBs oversee all health care-related patient movement . have higher staffing requirements than inpatient Once HCPOP determines the appropriate housing psychiatric program beds, the requested funds location from a security perspective, CDCR’s inpatient would add enough staff to the 60 existing ICF reporting unit (IRU) can decide to conduct a clinical beds so that they are always staffed like MHCBs assessment of the housing assignment . In addition, the and, thus, can be used to meet multiple bed IRU can also review the appropriateness of a patient’s needs . current housing assignment to determine if the patient • Fund Working Drawings for MHCB should be moved . The IRU selects which referrals and Construction Projects ($7 Million). The budget patient bed assignments to review based on clinical includes $7 million to fund the working drawings factors, such as how long patients have been in their stage of projects to construct MHCB facilities at current mental health bed . Currently, the department Richard J . Donovan Correctional Facility in San has two limited-term positions at headquarters and Diego and the California Institution for Men in $400,000 to conduct these reviews, which are set to Chino . These projects would add an additional expire at the end of 2017-18 . These two psychologists 100 MHCBs for male inmates . The total cost of review around a total of 1,440 housing assignments these two projects is expected to be $111 million annually . and would be completed by June 2021 . Recent Court Order. In April 2017, the Coleman • Increase HCPOP Staff ($1.3 Million). The court issued an order that stated CDCR had an budget includes $1 .3 million for HCPOP to insufficient number of MHCBs and that the department (1) continue the five existing, limited-term needed to eliminate delays in transferring patients positions on an ongoing basis and (2) add three to MHCBs, as well as ICF and APP beds . The court new permanent positions . According to the ordered that monetary sanctions of $1,000 per day be administration, this would allow HCPOP to review applied for every patient whose placement exceeds referrals for appropriate housing assignments court-approved timelines . To address these issues, the more quickly and better manage the mental 2017-18 budget package activated 70 ICF beds at the health patient movement process . California Medical Facility (CMF) in Vacaville and shifted • Require CDCR Conduct Mental Health responsibility of most inpatient psychiatric programs Projections ($1.2 Million). The budget includes from DSH to CDCR, with the intent that these actions an increase of nine positions and $1 .2 million would reduce transfer times . for CDCR’s Office of Research to use the court-approved methodology to conduct mental Governor’s Proposals health population projections, rather than The Governor’s budget for 2018-19 includes various McManis Consulting . (This would be in addition proposals—totaling $27 .1 million (General Fund)—to to the $150,000 currently provided to McManis increase the number of mental health beds available Consulting .) According to the administration, and improve CDCR’s management of such beds . moving the mental health projections from the Specifically, the Governor proposes to: contractor to CDCR would demonstrate to the court that the department can do these • Activate 60 Flex Beds ($9.5 Million). The projections internally . The department states that budget includes 55 positions and $9 .5 million to it needs approval from the federal court, which convert 60 high-custody ICF beds at CMF and it is in the process of seeking, to be able to do the California Health Care Facility in Stockton into its own projections . CDCR indicates that the flex beds . (While the proposal would increase current contract with McManis Consulting is likely the number of available MHCBs, it would not necessary through the end of 2020-21 to allow www.lao.ca.gov 25 analysis full gutter 2018-19 BUDGET the department to develop its own projections in We note that the above projections do not account accordance to the court-approved methodology . for any reduction in the need for these beds resulting • Increase IRU Staff ($1.1 Million). The from the additional IRU and HCPOP staff proposed . As department requests $1 .1 million for IRU to we discuss below, we find that the additional staff could (1) continue the two existing, limited-term help transfer patients in and out of beds more quickly psychologists on an ongoing basis and (2) add and reduce the need for MHCBs . This suggests that four additional psychologists . According to the the actual need for these beds could even be lower administration, this would allow additional clinical than current projections show . We note that when the reviews of referrals to take place and reduce the Legislature approved funding in the 2017-18 budget number of MHCB patients that remain in the beds to complete preliminary plans for the MHCB beyond the ten-day limit established by the court . construction projects, it did not have the mental health population projections that included estimates of how Proposition 57 would impact the need for these beds . LAO Assessment Need for Additional Research Staff Not Fully Additional MHCB Capacity Appears Unnecessary Justified. As previously indicated, at the time of in Long Run. Figure 6 summarizes (1) the projected this analysis, the department had not received court need for MHCBs over the next few years based on the approval for it to take over the responsibility for the most recent mental health bed study, (2) the number mental health projections from the contractor . We also of beds currently available to meet these projected note that it is currently uncertain whether it is required needs, and (3) the additional beds proposed by that CDCR take over responsibility for the projections the Governor . As shown in the figure, the need for in order for the state to remove itself from federal court MHCBs is projected to exceed the current number of oversight . Moreover, the department has not provided MHCBs available over the next several years . However, any information indicating that it could provide more the projected need is estimated to decline in the reliable or comprehensive projections than a private long run, likely in part due to the implementation of Proposition 57 . Figure 6 Specifically, the number of MHCBs Governor’s Proposals to Increase MHCB Capacity needed is projected to decline from Appear Unnecessary in Long Run 464 beds in 2018-19 to 433 beds in Number of Beds 2021-22 . Bed Need Moreover, while the Governor’s 600 Additional Bed Capacity Proposed proposals to expand MHCB capacity Current Bed Capacity would help meet the projected MHCB 500 need in the short run, they would provide significantly more beds than necessary—particularly by 2021-22 400 when the two MHCB construction projects are completed . As shown 300 in the figure, if the proposals were approved, CDCR would be 200 staffing about 150 more MHCBs than necessary in 2021-22 based on current projections—resulting 100 in tens of millions of dollars in unnecessary annual staffing costs and over $100 million in unneeded 2017-18 2018-19 2019-20 2020-21 2021-22 construction costs . Projected MHCB = Mental Health Crisis Bed. 26 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET contractor, which is notable given that the proposed To the extent additional MHCBs are necessary in the staffing resources are eight times (or $1 million) more future, we recommend that the Legislature direct the expensive than the current contract . We are also department to address this need with additional flex unaware of any problems identified by the department beds rather than costly construction projects . regarding the current projections . Reject Proposed Research Staff. We recommend Additional IRU and HCPOP Staff Could Help that the Legislature reject the proposed nine positions Expedite Review Process. According to the and $1 .2 million for CDCR’s Office of Research to department, part of the reason it has difficulty moving assume responsibility for conducting mental health patients in and out of MHCBs and inpatient psychiatric projections, as the proposed resources have not been program beds is because it does not have enough fully justified . However, to the extent that the court IRU and HCPOP staff to review housing assignments . orders the state to complete the projections with its The additional staff proposed could help facilitate the own staff, the Legislature could consider a request for movement of patients to the appropriate mental health resources at that time . program as quickly as possible, which would reduce Approve Proposed IRU and HCPOP Staffing the ongoing need for MHCBs and inpatient psychiatric Resources. Most of the staffing requested for the IRU program beds . As a result, the request for these staff and HCPOP replace existing limited-term staff that appear justified . are necessary to continue to meet court-approved guidelines for transferring patients to MHCBs and LAO Recommendations inpatient psychiatric programs . The additional staff Adopt Modified Governor’s Flex Bed Proposal. requested for these units would allow CDCR to manage The Governor’s flex bed proposal makes sense referrals more quickly, which would further reduce because it addresses the immediate and short-term the need for costly MHCBs and inpatient psychiatric need for additional MHCBs . However, since the need program beds . Accordingly, we recommend that the for flex beds is estimated to be short-term in nature, Legislature approve the requested staffing resources . we recommend providing funds for the 60 flex beds on a four-year, limited-term basis . This would allow DENTAL EQUIPMENT the department to address the near-term need for REPLACEMENT AND REPAIR MHCBs—as well as any unexpected increases—until the need for these additional beds is projected to be LAO Bottom Line. We recommend that the eliminated . We also recommend that the Legislature Legislature modify the Governor’s proposal to replace approve supplemental reporting language requiring the dental equipment by reducing the requested amount by department to report annually starting on January 10, $150,000 annually to account for CDCR’s anticipated 2019 for the next four years on how frequently the savings in equipment repair . flex beds were used as MHCBs, ICF beds, or APP Background beds . This would provide the Legislature with the information it would need to determine whether to CDCR operates 153 dental clinics that provide maintain flex beds on an ongoing basis . If there is still services to inmates . In total, these clinics contain over an MHCB waitlist after limited-term funding expires, the 1,100 pieces of major dental equipment, including x-ray Legislature could consider providing funding to continue machines, dental chairs, and autoclaves to sterilize to operate these beds as necessary . To the extent that instruments . While the department currently spends the additional funding to operate these beds as flex about $1 million annually to repair this equipment, beds expires, these beds would continue to operate as it reports that it does not have sufficient funding in ICF beds . its base budget to routinely replace equipment . As Reject MHCB Facility Construction. Since the such, when the equipment becomes inoperable and updated mental health projections no longer show unrepairable, CDCR looks for savings in other areas a need for these beds by the time they would be of its budget that can be redirected to purchase completed in 2021, we recommend the Legislature replacement equipment . For example, in each of the reject the funding proposed for working drawings . last few years, the department has redirected about www.lao.ca.gov 27 analysis full gutter 2018-19 BUDGET $1 million in savings—primarily from vacancies in we recommend that the Legislature approve the mental health staffing—to replace equipment that has Governor’s proposal to provide $17 .5 million from become inoperable and unrepairable . Because it does the General Fund on a one-time basis to purchase not routinely replace old equipment, the department 338 vehicles . However, we also recommend that the reports that a significant portion of its equipment is Legislature direct the department to report at budget past its expected service life and over 100 pieces of hearings on whether it would be able to repurpose equipment are in immediate need of replacement . some of the vehicles proposed for replacement rather When dental equipment breaks, CDCR indicates that than dispose of or auction them (as proposed by the clinics may have to stop providing services until the Governor) to meet its other transportation needs . equipment can be repaired or replaced . Accordingly, Background inmates either receive delayed treatment or must be escorted to a clinic at another facility, which can cause CDCR Uses Vehicles for Various Purposes. CDCR security concerns . has nearly 7,700 vehicles of varying types (ranging from golf carts to farming equipment) that are used for Governor’s Proposal a variety of purposes, including inmate transportation The Governor’s budget proposes $3 .5 million from (both within and outside of prison grounds), fire the General Fund in 2018-19 to replace equipment in protection, parolee supervision, construction support, immediate need of replacement and $2 .5 million from and institution perimeter security . For example, the the General Fund in 2019-20 and annually thereafter department often transports inmates to off-site to replace about 140 pieces of equipment annually . appointments in buses, vans, sport utility vehicles, and According to the department, having newer dental sedans . CDCR reports that over 1,100 (15 percent) of equipment that is less prone to breakage will reduce its vehicles are prioritized for transporting inmates to interruptions in dental service . health care appointments . Although these vehicles are often used for other purposes—such as transporting Proposal Does Not Account for inmates to court—when not being used for health care Savings in Dental Equipment Repair purposes, the department commonly refers to them as “health care vehicles .” CDCR staff and inmate workers While the Governor’s proposal would allow the generally maintain the department’s vehicles, but they department to replace dental equipment that is in are sometimes sent out for more complex repairs . immediate need of repair on a regular basis, we CDCR Ranks Vehicles by Priority for find that the proposal does not account for savings Replacement. In order to help determine which of its in equipment repair costs . This is because CDCR vehicles are in need of replacement, the department reports that having newer equipment will result in less ranks the vehicles based on a scoring system . equipment breakage, which, in turn, would save about Specifically, for each of its vehicles, CDCR assigns a $150,000 annually in equipment repairs . However, the numerical score based on the vehicle’s age, mileage, Governor’s budget does not include such a reduction in and condition, with a higher score denoting a higher funding . priority for replacement . If the vehicle is used for taking LAO Recommendation inmates to health care appointments, the department assigns additional points . CDCR considers the top We recommend that the Legislature modify the ranked 2,209 vehicles (29 percent of the total vehicles) Governor’s proposal by reducing the amount requested to be high priority for replacement, 291 of which are by $150,000 to account for CDCR’s anticipated savings designated as health care vehicles . in equipment repair . Governor’s Proposal HEALTH CARE VEHICLES The Governor’s budget proposes $17 .5 million from LAO Bottom Line. Given that the department has the General Fund on a one-time basis in 2018-19 to demonstrated a need for new vehicles that transport purchase 338 vehicles that are used for transporting inmates to health care, court, and other appointments, 28 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET inmates to health care and other appointments (such as could help address the department’s other inmate attending court) . Specifically, the budget proposes: transportation needs . Not Repurposing 291 Health Care Vehicles • $14 .6 million to replace 291 existing health care Appears Unnecessarily Wasteful. As previously vehicles ranked highest in CDCR’s replacement indicated, the department intends to dispose of or sell priority order . According to CDCR, it intends to at state auction the 291 health care vehicles proposed either dispose of or sell at the state auction the for replacement . However, given that the department vehicles proposed for replacement . has some vehicles (not designated for health care • $2 .9 million for 47 additional health care purposes) that are likely in worse condition than these vehicles—thereby increasing the size of the 291 vehicles, the department could potentially generate department’s vehicle fleet . an improvement in the condition of its non-health The department indicates that it is prioritizing the care fleet if it were able to repurpose some of these replacement and addition of vehicles used to transport 291 vehicles and instead dispose of other vehicles that inmates to attend health care and other appointments are in even worse condition . For example, according to over vehicles used for other purposes, such as data provided by the department, the proposal would construction, grounds keeping, or perimeter security . replace a 9-year-old van that is in poor condition and This is due to the more serious consequences of delays is designated as a health care vehicle, but not replace or cancelations in inmate health care appointments a 40-year-old van (used for non-health care purposes) or court appearances resulting from unavailable or that is in junk condition . Alternatively, the department unreliable vehicles . Specifically, CDCR reports that over could purchase a new van as a health care vehicle, 1,000 inmate court or health care transports (2 percent) redesignate the 9-year-old van as a non-health care of the estimated 44,000 inmate transports that vehicle, and dispose of the 40-year-old van . occurred between July 2016 and January 2017 were LAO Recommendation delayed, canceled, rescheduled, or required outside ambulance assistance due to the lack of a vehicle . We find that the Governor’s proposal to provide $17 .5 million for CDCR to purchase new health LAO Assessment care vehicles merits legislative consideration, given Addressing Vehicle Needs Appears Reasonable. the condition of the department’s vehicle fleet Based on data provided by the department on the and the negative impact of not having sufficient condition of its vehicle fleet and the negative impact vehicles available to transport inmates . However, we of not having sufficient vehicles available, we do not recommend that the Legislature direct the department have major concerns with the Governor’s proposal . to report at budget hearings on the extent to which it Focusing the resources on health care vehicles seems could repurpose any of the 291 vehicles that it intends reasonable given the importance of getting inmates to to auction or dispose of after they are replaced with appointments in a timely manner and the condition of new vehicles, as this would allow these vehicles to be the department’s health care vehicles . For example, used for other purposes and improve the condition of the department reports that 47 of its health care its non-health care fleet . vehicles are in junk condition (not roadworthy and not repair worthy) and 206 are in poor condition (reparable ELECTRONIC HEALTH RECORD mechanical issues and major body/interior damage) . SYSTEM All of these vehicles would be replaced under the Governor’s proposal . The remaining 38 health care LAO Bottom Line. We recommend the Legislature vehicles proposed for replacement are assessed as approve the Governor’s proposed funding increases for being in fair or good condition but are ranked high for the Electronic Health Record System (EHRS) . However, replacement due to their excessive age or mileage . we also recommend budget bill language that requires In addition, because health care vehicles are often the department to use funding intended to purchase used to transport inmates for other purposes (such as additional user licenses throughout the year only for this taking inmates to court), these new health care vehicles purpose . www.lao.ca.gov 29 analysis full gutter 2018-19 BUDGET Background for the ongoing costs of these licenses . Under the Governor’s proposal, the number of CCUs would The EHRS was designed to provide a single increase to 7,100 in 2019-20 . Each license costs electronic medical record for every inmate, which would $110 per month . This increase in CCUs reflects be accessible to staff at all institutions, rather than the need for dental and mental health staff to have having to continuously transfer paper files amongst access to the system . staff (both within and across institutions) or maintain • Increase System Responsiveness to Disaster duplicate files . In 2012, the Receiver contracted with Recovery ($1.2 Million). The proposal includes Cerner Corporation (Cerner) to develop the EHRS . The $1 .2 million that would be paid to Cerner annually project was initially estimated to cost $182 million and to decrease the time it would take Cerner to be completed by June 2017 . The 2016-17 budget restore the system to operation in the event of a included funding to expand the EHRS to include dental disaster from 30 days to no more than 72 hours . and mental health records and address shortcomings • Increase Number of Registered User Licenses that the Receiver identified with the initial plan for the ($600,000). The administration is proposing EHRS (such as the need for additional equipment) . $600,000 to increase the number of registered These changes more than doubled the total cost of user licenses from 12,000 to 18,000, primarily for the project to $386 million and delayed the project’s dental and mental health staff . completion until December 2019 . • Replace Dictation Software ($300,000). The In order for an individual CDCR staff member to current dictation software, which allows the EHRS access the system, a “registered user” license must to automatically transcribe speech into text, will be purchased for that person . Currently, the state no longer be supported by Cerner . Accordingly, maintains 12,000 registered user licenses for EHRS . CDCR requests $300,000 annually to update In addition, in order for staff members to access the and operate a new dictation software that will be system simultaneously, a “concurrent user” (CCU) supported by the vendor . license must be purchased monthly for each person seeking access simultaneously . While the Receiver’s • Provide Training ($250,000). The administration budget for 2017-18 includes around $4 million for proposes $250,000 to provide ongoing training to 2,600 CCUs, the contract was amended in December 167 staff members . 2017 to allow CDCR to purchase as many as 3,400 The above adjustments would increase the additional CCUs—for a total of 6,000 . An augmentation total project costs to $406 million, an increase of was not requested at that time for these additional $19 .6 million (5 percent) above the most recent cost CCUs . To the extent that CDCR needs these additional estimate for the project . CCUs, it would purchase them from Cerner in blocks of 200 CCUs . LAO Assessment Governor’s Proposal Most of the Increases Appear Justified. In order to expand the EHRS, such as to include dental and The Governor’s budget proposes $8 .3 million from mental health records, and address various issues the General Fund in 2018-19 for the EHRS . (Under (such as giving physicians the ability to dictate medical the Governor’s proposal, this amount would decline to notes into EHRS) as intended by the Legislature, $7 .1 million annually beginning in 2019-20 .) Specifically many of the proposed expenditures appear necessary . the Governor proposes to: For example, replacing the dictation software with a • Increase Number of CCU Licenses different software that will be supported by the vendor ($5.9 Million). The administration requests appears to be more cost-effective compared to hiring $5 .9 million to increase the number of CCUs from staff to input physicians’ notes into the EHRS or having 6,000 to 6,600 in 2018-19 and requests more relatively costly physicians type notes into the EHRS resources to fund that number of CCUs . This instead of seeing additional patients . amount includes $1 .1 million in one-time costs for Need for Some Additional CCUs Also Appears additional remote hosting space and $4 .8 million Justified . . . At the time of this analysis, the 30 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET department has rolled out the EHRS to all institutions units that previously served Security Housing Unit and the system has been in full operation for about (SHU) inmates appear necessary and recommend the three months . The department is currently using around Legislature direct CDCR to submit a separate proposal 5,900 CCUs—3,300 more than it is currently funded specifically for these for this specific set of projects for in the 2017-18 budget . CDCR plans to add 700 that it could consider prior to receipt of the above additional users between now and the end of 2018-19 . information . This partly reflects having dental staff using the EHRS at Background all institutions by October 2018 . . . . But Entire Funding Amount Not Likely Medication Rooms. Every housing unit within Necessary. Since the department purchases CCUs a prison has to have access to a medication room as it needs them, it may not purchase all 6,600 CCUs to ensure that necessary medication is provided to in 2018-19 . To the extent the department purchased inmates . Most medications are distributed by licensed some of these licenses for only part of the year, the vocational nurses (LVNs) to inmates from pill windows Receiver would have more funding than necessary at various locations throughout the prison . These to cover its need for CCUs . Under the Governor’s spaces are known as medication distribution rooms proposal, the department would be able to redirect any (MDRs) . Most general population inmates leave their funds not used for licenses to other inmate health care housing unit to get their medication from an MDR that purposes . serves multiple housing units . In many cases, inmates line up outside to receive their medication from an LAO Recommendation MDR . Some inmates, however, receive their medication Adopt Budget Bill Language to Restrict Use of from MDRs that are located within their housing unit . Funds. We recommend the Legislature approve the For example, inmates in the enhanced outpatient Governor’s proposal as the increases are necessary program (EOP)—which is the highest level of outpatient to fully implement the EHRS the Legislature has mental health care that CDCR offers—have MDRs previously approved . However, we also recommend located within their housing unit . This is to ensure that the Legislature adopt budget bill language specifying their mental health condition does not interfere with that the proposed $5 .9 million for CCUs can only be their ability to access medication . used to purchase these additional licenses as they are In addition, some inmates need to have an LVN needed and any remaining funding must be reverted deliver medication directly to their cell because of to the General Fund . This would increase legislative security or health reasons . This includes inmates in oversight of the funds and ensure that they are used for restricted housing, which are units that temporarily its intended purpose as approved by the Legislature . house inmates who have committed a serious violation or whose presence in a less restricted environment MEDICATION ROOM PROJECTS poses a threat to themselves or others . In general, SHUs are used for longer-term restricted housing LAO Bottom Line. The Governor’s proposal placements, while Administrative Segregation Units includes funding to create additional medication rooms (ASUs) are used for shorter-term placements . While in various housing units at 14 prisons . In order for the in these units, inmates’ freedom of movement and Legislature to fully assess the Governor’s proposed interaction with other inmates is substantially restricted . projects and determine the extent to which they are For these restricted housing units, LVNs prepare necessary, we recommend it require CDCR to report medications in a medication preparation room (MPR) at budget hearings on its medication room needs that and then go to individual inmates’ cells with a cart that takes into account the completion of the medication holds the medications being distributed . Given that rooms previously approved by the Legislature . Pending each prison typically serves multiple types of inmates receipt and review of this information, we recommend at different housing units throughout the facility, many the Legislature withhold action on the Governor’s prisons have various types of medication rooms . proposed projects . However, we find that the proposed Medication Room Improvements. Since being medication rooms specific to general population appointed by the federal court to take control over the www.lao.ca.gov 31 analysis full gutter 2018-19 BUDGET direct management of the state’s prison medical care LAO Assessment system from CDCR, the Receiver has identified various Need for Additional Medication Rooms Remains shortcomings with the department’s medication rooms . Unclear. At the time of this analysis, CDCR was not For example, the Receiver found that various prisons able to provide information on the total number of did not have the appropriate types of medication rooms inmates that will be served once all of the 22 medication for certain types of inmates they house . For example, room projects that were previously approved by the some prisons with EOP units lacked in-unit MDRs . The Legislature are completed . The absence of such Receiver also found that some prisons have medication information makes it difficult to determine the extent to rooms that force inmates to wait in line outside without which the Governor’s proposed projects are necessary . adequate protection from inclement weather . As a For example, it might be possible for the EOP inmates result, since 2007-08 the Legislature has approved in units that would receive MDRs to be moved to units $52 .2 million for capital projects to improve the that already have or will have appropriate MDRs when medication rooms at 22 prisons . All of these projects the current projects are complete, assuming there are are expected to be completed by May 2019 . not factors—such as security or health concerns—that Governor’s Proposal would make such a move challenging . Even if the department can show that not all inmates The Governor’s budget proposes $3 .3 million from can be served after the previously approved projects the General Fund to fund preliminary plans to add are completed in 2019, it is unclear whether all of or modify medication rooms at 14 prisons . The total the proposed projects will be necessary by the time cost of these 14 projects is $38 .6 million and the they could be completed in 2022 . This is because projects are expected to be completed by November the department’s current projections show that by 2022 . Each of these projects is comprised of multiple the time these projects are completed, some of the subprojects that addresses the medication room needs inmate populations they are intended to serve will at a particular housing unit within a prison . Specifically, have declined . For example, CDCR projects that the these subprojects fall into two categories: EOP population will decline by around 400 inmates • Additional MDRs. Nine prisons have subprojects (5 percent) between 2017 and 2022 . This suggests to construct additional MDRs . Seven of these that the additional medication rooms proposed by the prisons are requesting MDRs for units that were Governor to serve EOP inmates may not be necessary recently converted to serve EOP inmates and did in a few years . It is also possible that the need for not have MDRs inside them . The remaining two other proposed projects targeted at specific types of prisons have housing units that were recently inmates—such as SHU or ASU inmates—could decline designated to serve general population inmates by the time they are completed, particularly since and need MDRs . Previously, these two units the overall inmate population is expected to decline served SHU inmates that received medication that by a few thousand over this time period . Whether all was prepared in an MPR . of these projects are necessary after this decline will also depend on various factors, such as the housing • Additional MPRs. Nine prisons have subprojects security level of the inmates that remain in CDCR . to construct additional MPRs . Eight of these Without knowing how many and what type of inmates prisons have ASU units that do not have MPRs . will be served with the previously approved medication According to the department, these eight projects rooms, it is difficult for the Legislature to assess how should have been included in the initial funding many of the proposed projects will continue to be provided in 2007-08, but were unintentionally necessary by 2022 . We acknowledge, however, that omitted . The remaining prison requires an the subprojects to construct MDRs for inmates housed additional MPR due the high number of patients at units previously used to house SHU inmates will that receive mental health medications . be necessary as long as there are general population inmates in these housing units . 32 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET LAO Recommendations the Governor’s proposed changes to DJJ’s age of jurisdiction to avoid an unintended consequence of Require CDCR to Report Complete Medication having some youths spending up to two years longer in Room Needs. In view of the above, we recommend DJJ than they otherwise would . that the Legislature require CDCR to report at spring budget hearings on its medication room needs . This Background information should include (1) how many inmates Youths in Juvenile Court. All youths who are the department will be able to serve with previously accused of a crime that occurred before they turned approved medication rooms both overall and in each 18 years of age and appear in court start in juvenile category of inmates that requires a particular type of courts . (As we discuss below, however, some room, (2) whether overall inmate population projections youths can be transferred from juvenile court to adult and projections for each category of inmates that courts under certain circumstances .) Juvenile court requires a particular type of medication room support proceedings are different than adult court proceedings . the need for all of the proposed projects after For example, juvenile court judges do not sentence a accounting for housing security levels and other factors, youth to a set term in prison or jail . Instead, the judge and (3) the department’s plan for moving inmates to determines the appropriate placement and rehabilitative maximize the use of currently approved medication treatment (such as drug treatment) for the youth, based rooms . This information would allow the Legislature on factors such as the youth’s offense and criminal to fully assess the Governor’s proposed projects and history . About 41,000 youth cases were conducted in determine the extent to which they are necessary . We juvenile court in 2016 according to DOJ . Counties are recommend that the Legislature withhold action on the generally responsible for the juvenile court youths, some Governor’s proposal pending receipt and review of the of whom are placed in county juvenile facilities . If the above information . judge finds that the youth committed certain significant Request Specific Proposal for MDRs for Housing crimes listed in statute (such as murder, robbery, and Units Previously Serving SHU Inmates. However, certain sex offenses), the judge can place the youth as discussed above, we find that the subprojects to in state juvenile facilities operated by DJJ . Very few construct MDRs for general population inmates housed youths are placed in DJJ by the juvenile courts . For in units that previously housed SHU inmates are example, only 183 youths were sent to DJJ by juvenile necessary . Accordingly, we recommend the Legislature courts in 2016—less than 1 percent of the cases heard direct the department to submit a separate proposal for in juvenile court . As of December 2017, DJJ housed this specific set of projects that the Legislature could about 560 juvenile court youths . consider prior to receiving the above information on the Youths committed to DJJ from the juvenile court do department’s overall medication room needs . not have a set term . Instead, these youths are generally released from DJJ (1) when the Board of Juvenile GOVERNOR’S JUVENILE JUSTICE Hearings (BJH) determines that they can be released REFORM PROPOSAL safely back into the community or (2) just prior to their 23rd birthday—whichever occurs first . This is because, LAO Bottom Line. Given that research suggests since 2012, statute has limited DJJ’s jurisdiction to that youths generally have better outcomes when youths who are 23 years of age or younger . Prior to they remain in juvenile court and/or are housed in 2012, the age of jurisdiction for DJJ was set at 25 . juvenile facilities rather than prison, we recommend Once youths are placed in DJJ, they are housed in that the Legislature approve the Governor’s proposed living units based on their behavior and rehabilitative statutory changes to allow older youths as well as needs . State law requires that counties generally more adult court youths to be housed in the Division pay $24,000 annually for each youth committed by of Juvenile Justice (DJJ) . However, given that the the juvenile court to DJJ to help offset a portion of actual effectiveness of these proposals is uncertain, we DJJ’s total cost . Youths who are released from DJJ recommend approving them on a limited-term basis are generally supervised in the community by county and require DJJ to conduct specified evaluations . probation officers . In addition, we recommend that Legislature modify www.lao.ca.gov 33 analysis full gutter 2018-19 BUDGET Youths in Adult Court. Prosecutors who accuse similarly to adult inmates . However, since 2015-16, youths of (1) committing certain significant crimes listed youths who are 22 years of age or younger who are in in state law (such as murder, robbery, and certain sex prison and have no record of in-custody misconduct offenses) when they were age 14 or 15 or (2) committing in the last year may volunteer to become part of a felony when they were age 16 or 17 can seek to have the Youthful Offender Program . These youths are these youths’ cases transferred to adult court . Juvenile generally housed in a lower-security facility than they court judges decide whether a case will be transferred otherwise would be, receive priority for placement into to adult court in a proceeding known as a transfer CDCR rehabilitation programs, and have access to hearing . In transfer hearings, judges base their decision some youth-specific programs (such as a mentorship on various factors, including a report prepared by county program) . Youths can remain in this program until probation officers on the youth’s behavioral patterns and they reach 25 years of age . However, the department social history and whether the youth can be adequately indicates that the majority of youths admitted into rehabilitated before he or she must be released from a prison either are ineligible or do not choose to volunteer juvenile facility . for the program . Since the program was implemented The transfer hearing process was established by in July 2015, about 1,700 youths have been part of Proposition 57 . Prior to Proposition 57, some youths the program . (At the time of this analysis, CDCR was would have their cases heard in adult court without unable to provide the number of youths currently in the approval from a juvenile court judge . While relatively few program .) youths were sent to adult court before Proposition 57— Implementation of Farrell Settlement. In 2003, 566 youths in 2015—the measure is expected to result a lawsuit, Farrell v. Allen, was filed against the state, in this occurring even less frequently . For example, alleging that it failed to provide adequate care and DOJ reports that 160 (or 27 percent) fewer youths effective treatment programs to youths housed in DJJ . were sent to adult court in 2016 (after the passage of In 2004, the state entered into a consent decree in Proposition 57) than in 2015 . This number of youths the Farrell case and agreed to develop and implement sent to adult court could decline further given that remedial plans related to nearly every aspect of DJJ Proposition 57 was in effect for only a small portion of operations . The overarching goal of these plans was to 2016 . move DJJ toward adopting a “rehabilitative model” of Adult Court Commitments to DJJ. Youths care and treatment . In February 2016, the lawsuit was convicted in adult court when they are under 18 years terminated after the court overseeing the case found of age are typically held in a DJJ facility for the first that DJJ had sufficiently complied with the requirements portion of their sentences . These youths are sent to of the remedial plans . DJJ either on the order of the adult court that convicted Cost of DJJ. Because of the much higher levels them or at the discretion of CDCR . When these youths of staffing, DJJ is significantly more costly than state turn age 18, they are generally transferred to state prison . For example, the added cost of housing an prison . However, if their sentences are short enough offender in DJJ is around $80,000 annually, depending that they are able to complete their terms before on which living unit the youth is assigned . In contrast, turning age 21, they can serve their entire sentences housing an inmate in a contract bed costs the state in DJJ . These youths are housed in living units based about $30,000 annually . on their behavior and rehabilitative needs, similar to Governor’s Proposal youths committed to DJJ by juvenile courts . The state pays the entire cost of housing youths in DJJ who The administration is proposing budget trailer were convicted in adult court . After completing their legislation that would make several changes to allow sentences, these youths are generally supervised in the older youths as well as more adult court youths to community by state parole agents . As of December be housed in DJJ . According to the administration, 2017, DJJ housed about 70 adult court youths . research and case law suggest that youths in this age Youths in Prison. Youths who are transferred to range are less culpable for their crimes than adults, state prison—whether from DJJ or immediately after and that youths who spend time in prison have worse their conviction in adult court—are typically treated outcomes than those who remain in juvenile facilities . 34 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET In recognition of this research, the administration CDCR greater ability to place adult court youths proposes to (1) reduce the number of youths who are in DJJ . Under the proposal, the department transferred to adult court and (2) increase the number would be permanently authorized to place up to of adult court youths who can be housed in DJJ . 76 youths in two DJJ living units who (1) were Specifically, the administration proposes to: convicted in adult court, (2) committed crimes before their 18th birthday, (3) were adjudicated • Increase DJJ Age of Jurisdiction for Juvenile between age 18 and 21, and (4) could complete Court Commitments to 25. Under the their sentences before their 25th birthday . To the administration’s proposal, youths committed to extent space is available, similar youths who DJJ from juvenile court could generally remain committed their crime after age 18 could also be in DJJ until just before their 25th birthday (rather placed by CDCR into the program . One of the than their 23rd birthday) unless released by BJH living units would be activated in July 2018 and before then . According to the administration, the other unit in January 2019 . The administration this change is intended to reduce the number indicates that CDCR’s Office of Research would of youths transferred to adult court . This is track youths who participate in the program to because juvenile court judges would be less help evaluate the program’s effects . likely to transfer a youth to adult court if DJJ has more time to rehabilitate the youth than under In total, the above changes are estimated to current law . Since the proposed change could increase the DJJ population by 49 youths in the budget result in some juvenile court youths spending up year, growing to 114 by 2020-21 . To accommodate to two additional years in DJJ, counties would this increase, The Governor’s budget proposes not be required to pay for the portion of time $3 .8 million (General Fund) and 25 .6 positions in any youths are housed in DJJ beyond their 23rd 2018-19, increasing to $9 .2 million and 67 .8 position birthday under the Governor’s proposal . The annually beginning in 2020-21 . Some of these ongoing administration projects that this change would resources would be used to activate the living units result in 15 additional youths being housed in DJJ associated with the young adult offender pilot program . by 2020-21 . In addition, DJJ would activate two additional living units to house youths affected by the other proposed • Increase DJJ Eligibility Age for Adult Court eligibility changes—one in July 2019 and another in July Youths to 25. Under the administration’s 2020 . proposal, youths convicted in adult court but committed to DJJ would be allowed to spend LAO Assessment their entire term in DJJ if they can complete their sentences before their 25th birthday (rather Proposal Could Benefit Some Juvenile Court than their 21st birthday) . Youths who could not Youths, but Could Negatively Affect Others. As complete their sentences by this time would mentioned above, the administration’s proposal is continue to be transferred to prison when they partially due to research suggesting that youths who turn 18 years of age . (We note that this change are transferred to adult court commit more crimes would retroactively apply to such youths who are upon release than those who remain in juvenile already in DJJ .) According to the administration, court . For example, a review of available research in this change is intended to reduce the number 2007 concluded that transfers to the adult criminal of youths who spend time in adult prison and justice system typically increase (rather than decrease) increase their access to DJJ programs . The rates of crime among transferred youths . Moreover, administration projects that this change would youths who are convicted in adult court can spend result in 25 additional youths being housed in DJJ much longer periods of time incarcerated than those by 2020-21 . who remain in juvenile court . For example, juvenile court youths released from DJJ in 2015 spent an average • Implement Young Adult Offender Pilot Program. The administration proposes a young of around three years in DJJ, while adult court youths adult offender pilot program that would provide who had been sent directly to prison spent an average of about nine years in prison . Accordingly, despite the www.lao.ca.gov 35 analysis full gutter 2018-19 BUDGET greater annual cost of housing youths in DJJ, the total In addition, DJJ has not completed an evaluation of cost of housing youths from juvenile court can be lower the actual effect of its programs on youth . While DJJ is than if they were convicted in adult court because of in the process of contracting for such an evaluation, this the shorter amount of time they serve overall . evaluation will not be released until the end of 2019-20 . However, the Governor’s proposal could also result Accordingly, it remains unclear how effective DJJ’s in some youths spending up to two years longer in DJJ program will be at rehabilitating additional youths that than they otherwise would have—specifically, those would be sent to DJJ under the Governor’s proposal . juvenile court youths who would be released from DJJ We also note that the administration is proposing just prior to their 23rd birthday under current law . This is ongoing funding for the proposed young adult offender because all youths who reach 23 years of age without pilot program . Given that the purpose of a pilot is to being released by BJH could remain in DJJ until they test the effectiveness of a particular program to then reach age 25 . This is potentially problematic because determine whether it merits continuation or expansion, research suggests that keeping a youth in treatment it is uncertain why ongoing funding is being proposed programs for a longer period of time than required on for this program . In addition, while the administration average does not appear to increase the effectiveness indicates the CDCR Office of Research would track the of the programs . Given that this would also increase youths involved in the program, it does not have plans the costs of housing these youths, it is unlikely to be a for an independent evaluation of the cost-effectiveness cost-effective way to reduce recidivism . of the program . Without such an evaluation, it will be Reducing Adult Court Youths’ Prison Time difficult for the Legislature to assess whether the pilot Could Reduce Recidivism, but Is Costly. The program is a cost-effective approach to rehabilitating administration’s proposals to allow more adult court these youths . youths to be housed in DJJ could result in better LAO Recommendations outcomes for these youths . For example, a study carried out in California using data from the mid-1990’s Approve Proposals With Sunset Date. Given that suggests that youths convicted in adult court but research suggests that youths generally have better housed in juvenile facilities had lower rates of recidivism outcomes when they remain in juvenile court and/ when compared to youths convicted in adult court but or are housed in juvenile facilities rather than prison, housed in prison . However, the costs to house these the Governor’s proposed statutory changes have youths in DJJ would be much higher than housing them merit . However, given that the effectiveness of these in prison . proposals depends on how effective DJJs programs Lack of Evaluation of DJJ Raises Concerns. In are—about which there is some question—we response to the Farrell settlement, DJJ has improved recommend that the Legislature approve these policy its operations in various ways . In particular, some of changes (with some modification to the proposal to its rehabilitation programs appear to be based on increase DJJs age of jurisdiction for juvenile court programs that research has shown to be effective youths discussed below) for a fixed time period—such elsewhere . However, DJJ does not currently evaluate as seven years . This would allow sufficient time for whether its programs actually operate in the same the proposed changes to be implemented and for the manner as the programs they are based on because Legislature to determine whether they should continue . it does not conduct reviews of it programs known Require Evaluations. In order to ensure that the as “fidelity assessments .” Although DJJ is planning Legislature has sufficient information to assess whether to begin fidelity assessments in 2018-19, until the proposed young adult offender pilot program these assessments are complete and show that should continue to be funded after it sunsets, we DJJ is implementing it programs appropriately, its also recommend that the Legislature require DJJ to programs cannot be considered evidence based . contract for an independent evaluation to assess the This raises concerns because research shows that cost-effectiveness of the program . This evaluation evidence-based programs are more likely to be shall be completed by January 10, 2025, with a final cost-effective at reducing recidivism . evaluation report provided to the Legislature . We estimate that the evaluation would likely cost a couple 36 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET hundred thousand dollars . We also recommend DJJ youths for a longer period of time may have little effect provide the outcomes of its fidelity assessments as they and could increase costs, we recommend modifying become available, as well as the current evaluation that the Governor’s proposal . Specifically, we recommend is expected to be complete by the end of 2019-20 . that the Legislature provide juvenile court judges who These reports would allow the Legislature to monitor are conducting transfer hearings the discretion to allow DJJ’s overall rehabilitation programs and provide some a youth to remain in DJJ up to the age of 25 in cases insight into the merit of the proposed age of jurisdiction where a judge determines that not doing so would changes . necessitate that the youth be transferred to adult court . Modify Governor’s Proposal Age of Jurisdiction This would provide an alternative to sending such youth Proposal. Given that returning DJJ’s age of jurisdiction to adult court without resulting in other juvenile court to 25 could potentially reduce recidivism and lower youths remaining in DJJ beyond their 23rd birthday costs for youths who would otherwise be transferred to unnecessarily . We note that this would also likely reduce adult court, we find that this change merits legislative the cost of the administration’s proposal somewhat, approval . However, because keeping some of these though the precise amount would depend on how judges used this proposed discretion . JUDICIAL BRANCH OVERVIEW proposes about $3 .9 billion from all state funds (General Fund and state special funds) to support the judicial Judicial Branch Budget. The judicial branch is branch in 2018-19, an increase of $188 million, or responsible for the interpretation of law, the protection 5 .1 percent, above the revised amount for 2017-18 . of individuals’ rights, the orderly settlement of all legal (These totals do not include expenditures from disputes, and the adjudication of accusations of legal local revenues or trial court reserves .) Of the total violations . The branch consists of statewide courts (the Supreme Court Figure 7 and Courts of Appeal), trial courts in each of the state’s 58 counties, Total Judicial Branch Funding and statewide entities of the branch (In Billions) (the Judicial Council, the Judicial Council Facility Program, and the $5 Local Revenues Habeas Corpus Resource Center) . State Special Funds The branch receives revenues from 4 General Fund several funding sources including the state General Fund, civil filing fees, criminal penalties and fines, county 3 maintenance-of-effort payments, and federal grants . 2 Figure 7 shows total funding for the judicial branch from 1 2013-14 through 2018-19 . Total funding for the judicial branch has steadily increased and is proposed 2014-15 2015-16 2016-17 2017-18 2018-19 to reach $4 billion in 2018-19 . Estimated Projected As shown in Figure 8 (see next page), the Governor’s budget www.lao.ca.gov 37 analysis full gutter 2018-19 BUDGET Figure 8 Judicial Branch Budget Summary—All State Funds (Dollars in Millions) Change From 2017‑18 2016‑17 2017‑18 2018‑19 Actual Estimated Proposed Amount Percent State Trial Courts $2,727 $2,742 $2,943 $201 7.3% Supreme Court 45 50 51 — 0.7 Courts of Appeal 223 242 243 — 0.1 Judicial Council 127 146 149 3 1.8 Judicial Branch Facility Program 386 478 462 -16 -3.3 Habeas Corpus Resource Center 15 17 17 — 0.4 Totals $3,522 $3,675 $3,864 $188 5.1% amount proposed for the judicial branch in 2018-19, AUGMENTATIONS TO GENERAL $1 .9 billion is from the General Fund—47 percent of PURPOSE FUNDING FOR TRIAL the total judicial branch budget . This is a net increase COURT OPERATIONS of $158 million, or 9 .1 percent, from the 2017-18 amount . This increase reflects various proposals to LAO Bottom Line. The Governor’s budget includes increase General Fund support for trial courts by a total $123 million to increase general purpose funding for of $210 million—nearly all of which is ongoing . This trial court operations—$75 million allocated based amount includes: on the Judicial Council’s priorities and $47 .8 million for certain trial courts that are comparatively less • $75 .0 million for allocation to trial courts by the well-funded than other courts . In evaluating the Judicial Council based on its priorities . Governor’s proposals, we recommend that the • $47 .8 million for allocation to certain trial courts Legislature (1) consider the level of funding it wants to that are comparatively underfunded relative to provide relative to its other General Fund priorities and other trial courts as determined by the Judicial (2) allocate any additional funds provided based on its Council . priorities rather than allowing the Judicial Council to do • $34 .1 million to backfill a further decline in fine so . Additionally, given the uncertainty around whether and fee revenue to the Trial Court Trust Fund . the Judicial Council’s current workload-based funding This increases the total General Fund backfill methodology accurately estimates trial court needs, in 2018-19 to $89 .1 million, which has been we also recommend the Legislature convene a working provided annually since 2014-15 . group to evaluate the methodology . • $25 .9 million for increased trial court health benefit and retirement costs . Background • $27 .2 million for various programs, such as Funding Trial Court Operations. The state’s self-help services and a pilot program for the annual budget typically designates the total amount online adjudication of certain traffic violations . of funding appropriated to fund trial court operations . While a portion of this funding must be used for specific This additional spending is partially offset by various programs or purposes (such as court interpreters), a reductions, such as the expiration of one-time funding significant portion of the funding is provided with little to in the current year and other technical adjustments . no restrictions . The Judicial Council—the policymaking and governing body of the judicial branch—is then responsible for allocating funding to individual trial courts . Upon receiving its allocation, each individual trial court has significant flexibility in determining how 38 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET its share of funding is used . This can result in significant to a cost estimate using various assumptions and is differences in the programs or services offered and combined with various other cost factors not captured the level of service provided across trial courts . For in the RAS model (such as jury costs) to determine the example, some trial courts may choose to use a greater total estimated workload-driven costs for each trial proportion of their funding to provide increases in court . This total, which may be further adjusted (such employee compensation than other courts . as a funding floor for the smallest courts), is the amount Following the realignment of fiscal responsibility for the judicial branch believes is needed to fully operate trial courts from the counties to the state in 1997, the each trial court . judicial branch received funding augmentations for trial Implementation of WAFM. In 2013-14, the Judicial court operations by submitting budget requests as part Council began to implement a five-year plan to phase of the annual state budget process, similar to most in the use of WAFM for allocating general purpose state departments . However, from 2005-06 to 2007-08, funding to the trial courts . Under this plan, a greater trial courts received a formula-driven automated annual percentage of appropriated funds was allocated increase in funding . As part of the 2009-10 budget through WAFM annually instead of through the historic package, this automatic increase was eliminated pro rata methodology . When funding is allocated under on a permanent basis, along with other automatic WAFM, the share each court receives is based on its cost-of-living adjustments provided to certain state workload costs as estimated by WAFM . In addition, the departments . Since then, funding increases for Judicial Council decided to allocate any augmentations trial court operations have generally been provided that were provided in the state budget for trial court through the approval of (1) budget requests for operations and not designated for a specific purpose specific purposes (such as increased funding for (meaning general purpose funding) through WAFM, and workload resulting from voter-approved initiatives), shift an equivalent amount of funding that would have (2) discretionary (or unallocated) funding increases, otherwise been allocated under the historic pro rata and (3) funding for increased trial court health benefit method into the WAFM allocation methodology . This and retirement costs . We note, however, that trial court further increased the proportion of funding allocated funding levels are not adjusted for increased salary through WAFM . In 2017-18, two-thirds of total general costs as the Legislature does not review and approve purpose funding for trial courts is estimated to be trial court labor agreements in the same manner as allocated under WAFM . state negotiated labor agreements . Recent Changes to WAFM. In January 2018, Workload Allocation Funding Methodology the Judicial Council approved significant changes to (WAFM). In April 2013, the Judicial Council approved how future funding will be allocated through WAFM, a new method it developed for allocating funds beginning in 2018-19 . According to the Judicial appropriated for trial court operations in the annual Council, two of the major changes are intended to state budget . This new methodology—known as stabilize funding allocations while attempting to equalize WAFM—is intended to distribute funding based on funding and to increase funding predictability . First, in workload instead of the historic “pro rata” approach, years where increased funding is provided by the state, which generally distributed funding based on the the funding would be first allocated to the 15 smallest historic share of statewide allocations received by each trial courts to ensure that they received 100 percent of trial court . This was because the pro rata approach their WAFM-identified costs . Up to 50 percent of the generally preserved funding inequities between trial remaining augmentation would be allocated to courts courts . below the statewide average funding ratio (calculated To begin with, the WAFM formula employs the as the ratio of actual funding appropriated to total costs Resource Allocation Study (RAS) developed by the calculated by WAFM) . The remaining amount would Judicial Council, which estimates the number of then be allocated to all trial courts based on WAFM . personnel needed for each court primarily based on Second, in the first year in which there are no the number of filings for various case types and the general purpose funding augmentations provided amount of time it takes staff to process such a filing . for trial court operations, allocations would generally Each court’s estimated staffing need is then converted remain the same . However, in the second year in which www.lao.ca.gov 39 analysis full gutter 2018-19 BUDGET no increased funding is provided, up to 1 percent of complete discretion and maximum flexibility in allocating funding allocated to trial courts that are more than these funds . For example, it could decide to allocate 2 percent above the statewide average funding ratio the funds under the newly revised WAFM allocation could be reallocated to those courts that are more than methodology . Allocation through WAFM would mean 2 percent below the statewide average funding ratio . that individual trial courts have flexibility in how they use their funding—likely resulting in different impacts across Governor’s Proposal trial courts . Some trial courts could use a portion of The Governor’s 2018-19 budget proposes a these funds to address increased cost pressures— $123 million General Fund augmentation to general such as increased salary costs for existing employees purpose funding for trial court operations . The Governor or contractors—in order to maintain existing levels of proposes to allocate the proposed augmentation in the service . Trial courts that are better at constraining such following two ways: costs would have more funding available to improve or increase access to court services instead . Additionally, • Based on Judicial Council Priorities trial courts may also use funds for varying purposes, ($75 Million). The administration proposes which may or may not align with legislative priorities . $75 million for the trial courts that would be It is also possible that the Judicial Council would allocated by the Judicial Council based on allocate some or all of the funds based on the its priorities . The administration states that it recommendations of the Commission on the Future anticipates that the Judicial Council will rely on of California’s Court System, as anticipated (but not recommendations made by the Commission required by the administration) . However, the costs on the Future of California’s Court System to and benefits of implementing each recommendation improve the accessibility and efficiency of court are unknown . Accordingly, it is unclear how many or operations . The administration also states that what recommendations could be implemented with it expects the Judicial Council to report on any the proposed funds . Additionally, the Legislature may anticipated outcomes . want to weigh in on the specific recommendations that • Equalize Trial Court Funding Levels are implemented and how they are implemented . The ($47.8 Million). The administration proposes to Judicial Council could also decide to allocate funding allocate $47 .8 million to those courts—identified for other trial court purposes, which could include by WAFM—whose actual funding levels are below expanding existing services or programs or establishing the statewide average funding ratio (calculated new services or programs, which may or may not be as the ratio of actual funding received to total aligned with legislative priorities . costs calculated by WAFM) of 76 .9 percent . Different Ways to Equalize Funding for Individual In other words, the actual funding levels for Trial Courts. There are different ways to equalize these courts are less than 76 .9 percent of their funding among trial courts depending on the intended total WAFM-identified costs . The proposed goal and how quickly that goal is to be reached, which augmentation for these courts would bring them in turn dictates how much funding is needed . The to the statewide average funding ratio—bypassing Governor’s proposal reflects one example of how this the Judicial Council’s newly revised WAFM could be done by setting an equalization goal of the allocation methodology . Trial courts receiving this WAFM statewide average ratio of 76 .9 percent and funding would have complete flexibility in how to providing a $47 .8 million augmentation in general use these funds . purpose funding solely for the 30 courts currently below this target . (We note that updated data indicates that LAO Assessment the current statewide ratio has changed and is now 78 .6 percent and that $52 .5 million would be needed Unclear How Judicial Council Would Allocate to meet this target .) As discussed earlier, the newly Proposed $75 Million. At the time of this analysis, it is revised WAFM methodology includes a somewhat unclear how $75 million of the proposed augmentation similar equalization goal as proposed by the Governor would be allocated to trial courts . This is because the when new general purpose funding is provided for trial Governor’s proposal would give the Judicial Council 40 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET courts . However, equalization would occur through or underestimated . Additionally, in determining trial WAFM by allocating approximately half of any new court costs WAFM makes certain assumptions funding specifically to those courts that are below the regarding desired service levels (such as how and statewide average . Under this approach, it would take what services are provided or how long it should take potentially more funding to reach the statewide average to process filings), which may or may not reflect the than under the Governor’s proposal as a portion of the desired service levels of the Legislature . funding would be distributed to courts that are above LAO Recommendations the statewide average . The Legislature could consider other means of providing equalization funding that draw Provide Funding in 2018-19 Based on Legislative from both the Governor’s and the Judicial Council’s Priorities. In evaluating the Governor’s proposals for approaches . $123 million in increased general purpose funding We also note that equalization can occur when for trial courts, we recommend the Legislature first existing funding is redistributed among trial courts— consider the level of funding it wants to provide trial rather than providing new funding . For example, in courts relative to its other General Fund priorities— the second year in which no new funding is provided, which could be higher or lower than the Governor’s the Judicial Council’s newly revised WAFM allocation proposed level . Second, we recommend the Legislature plan redistributes up to 1 percent of existing funding allocate any additional funds provided based on its from courts more than 2 percent above the statewide priorities . This would generally be consistent with average to courts 2 percent below the statewide how the Legislature has allocated funds to trial average . The Legislature could choose a different courts in recent years . As discussed above, under redistribution method, such as increasing the amount the Governor’s proposal, $75 million of the proposed to be redistributed or requiring redistribution annually increase would be allocated at the discretion of the regardless of whether new funding is provided . To the Judicial Council, which may or may not be aligned to extent that the Legislature is interested in equalizing trial the Legislature’s priorities . court funding, it will want to determine what it believes We find that there are a number of potential is an appropriate goal, how to achieve this goal (which priorities for increased trial court funding that the may or may not include additional funding), and how Legislature could consider . For example, the Legislature quickly it would like to reach the goal . could consider providing funding that is based on a Unclear Whether WAFM Accurately Identifies cost-of-living or inflationary adjustment in recognition Trial Court Funding Needs. While the development that the costs for maintaining service levels will of WAFM was an important first step by the judicial naturally increase from year to year . We estimate this branch to ensure that funding is allocated equitably could range from the low to mid-tens of millions of based on workload, it is unclear whether WAFM dollars, depending on how the Legislature chose to accurately identifies trial court funding needs . This is calculate the adjustment . Similar to the Governor, because it is uncertain whether WAFM’s underlying the Legislature could consider providing funding to assumptions and adjustments appropriately measure equalize funding among trial courts based on a goal it and calculate individual trial court need . For example, deems appropriate . The Legislature could also allocate although WAFM includes adjustments to address funds to support specific programs or services . As we salary differentials across trial courts, it is unclear discuss later in this report, the Governor has a separate whether such adjustments should be made or how they proposal to provide increased funding for self-help should be made . Similarly, it is unclear whether WAFM centers . appropriately differentiates between costs that are Establish Working Group to Evaluate WAFM as unaffected by changes in filings (fixed costs) and costs Budgeting and Allocation Methodology. Given the that change based on changes in filings (or marginal uncertainty around whether WAFM accurately estimates costs) . This differentiation is important since WAFM is trial court needs raised above, we believe further study based on the number of filings each court receives . is necessary . One way to assess the various issues Thus, accurately differentiating between these costs raised above is for the Legislature to direct our office helps ensure that funding needs are not overestimated to jointly work with the Department of Finance (DOF) www.lao.ca.gov 41 analysis full gutter 2018-19 BUDGET to evaluate WAFM—with technical assistance from of legal counsel—typically related to civil matters . This the judicial branch as necessary—and offer potential is generally because the individuals cannot afford to recommendations for change by November 1, 2019 . hire legal representation . Given their lack of familiarity The intended outcome would be a workload-based with statutory requirements and court procedures model that can be used for both estimating trial court (such as what forms must be filled out or their legal needs and allocating trial court operations funding in obligations in the potential case), self-represented the future . Ideally, the model could be adjusted over individuals can be at a legal disadvantage . In addition, time to account for new workload, changed processes, trial court staff tend to spend significantly more time or increased efficiency . An accurate formula would processing a self-represented filing than one with legal provide a clear understanding of how much funding representation . For example, incomplete or inaccurate is needed to meet specific workload or service levels . paperwork can lead to having to file paperwork This would also help the Legislature determine the repeatedly, to continue or delay cases, or to generate appropriate level of total funding for trial courts each additional hearings . To help self-represented individuals year and how such funding should be allocated access the court system, the judicial branch offers (or reallocated) to ensure that all trial courts meet or partners with other legal stakeholders (such as legislatively desired service levels . county law libraries or the State Bar) to provide various programs or services, including self-help centers . AUGMENTATION FOR Services Provided by Self-Help Centers. Each SELF-HELP CENTERS of California’s trial courts operates a self-help center which serves as a central location for self-represented LAO Bottom Line. We recommend the Legislature individuals to educate themselves and seek assistance direct the Judicial Council to conduct an independent with navigating court procedures . Attorneys and other comprehensive cost-benefit analysis of self-help trained personnel who staff the centers provide services services by November 2020, which would then allow in a variety of ways (such as through one-on-one the Legislature to determine what level of funding for discussions, courtroom assistance, workshops, and these services is merited, where the funding should referrals to other legal resources) for a wide range of be targeted to maximize state benefits, and whether issue areas . As shown in Figure 9, the Judicial Council funding allocations need to be adjusted elsewhere reports that self-help centers most commonly offer to account for savings created by self-help services . assistance with family law issues . For example, nearly Until this analysis is completed, it seems reasonable all self-help centers provide marital dissolution, child to provide some level of additional funding on a custody, and spousal support services . In providing limited basis through 2020-21 to self-help centers services, an individual self-help center may utilize in the interim since they are reportedly turning away certain resources and services provided by the Judicial individuals seeking assistance . The exact amount Council on a statewide basis, such as electronic to provide, which could be higher or lower than the document assembly programs that populate court amount proposed by the Governor, will depend on forms based on self-represented individuals’ answers the Legislature’s priorities for overall General Fund to certain questions . We note self-help centers spending, self-help services, and other court programs . could also utilize self-help services provided by other We also recommend approving the proposed budget governmental, nonprofit, or private organizations as bill language specifying how much is to be spent on well . self-help services annually and that unexpended funds Funding for Self-Help Centers. Funding for will revert to the General Fund as these provisions will individual self-help centers can come from a variety help the ensure that such funding is used accountably . of sources . The judicial branch currently allocates $11 .2 million annually for self-help services which are Background used to support self-help centers—$6 .2 million from Services for Self-Represented Individuals. the Trial Court Trust Fund (TCTF) and $5 million from Self-represented individuals refers to those who choose the Improvement and Modernization Fund (IMF) . These to access certain court services without the assistance funds are allocated to individual centers using a formula 42 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET based on the population of the county where the center Governor’s Proposal is located . Additionally, an individual trial court may The Governor’s budget for 2018-19 proposes a choose to allocate some of its general purpose funding $19 .1 million General Fund augmentation to expand to support its self-help center . Self-help centers can services at self-help centers, such as for additional also sometimes receive funding from other state funds attorneys and paralegals to provide assistance . These (including filing fee revenues), federal funds, and interest funds would be transferred to the TCTF, increasing income from attorney trust accounts—typically for the total amount provided from the TCTF to support providing assistance in specific issue areas within the self-help centers from $6 .2 million to $25 .3 million . In self-help center . For example, the state receives federal total, the Governor’s proposal would increase the total funding for self-help assistance related to child support amount specifically for such centers from $11 .2 million and certain other family law issues . to $30 .3 million, which includes the $5 million provided We also note that the 2016-17 budget provided annually from the IMF . $25 million on a one-time basis from the General Fund According to the administration, the proposed for a Court Innovations Grant Program to provide grants augmentation provides the judicial branch with on a competitive basis to support court programs and approximately one-third of the $62 million the judicial practices that promote innovation, modernization, branch believes is needed to fully address self-help and efficiency . The Judicial Council allocated about center needs . These funds would be distributed in the $4 .5 million of these funds to support self-help projects same manner as the current funding of $11 .2 million . that it believed were innovative or could improve Additionally, the Governor proposes budget bill the efficient delivery of services at ten courts . These language (1) specifying that a total of $30 .3 million is projects are currently in progress . dedicated for self-help services from the TCTF and the IMF and (2) requiring that any unexpended funds revert to the General Fund . The administration indicates Figure 9 that the proposed language is to ensure that a total of $30 .3 million is spent on self-help centers and that Self‑Help Centers Provide Services in none of the funding is redirected by the courts for other Different Issue Areas purposes . Issue Area Number of Centers LAO Assessment Marital dissolution 57 Child support 55 Potentially Significant Overall Impact on Access Custody/visitation 55 to Court Services, but Impacts on Individual Courts Guardianship 55 Could Vary. Given that the Governor’s proposal Parentage 55 would more than double the current funding provided Spousal/partner support 54 to self-help centers, the proposal could significantly Domestic violence 53 increase self-represented individuals’ access to court Name change 53 Civil harassment 51 services, particularly given that trial courts report not Landlord/tenant 44 being able to provide services to all individuals who Small claims 44 visit self-help centers . However, the exact magnitude Other family law 43 of the impact would depend primarily on how individual Elder abuse 41 trial courts use the additional funding . As discussed Adoption 38 previously, trial courts have flexibility over how they Limited civil debt collection 37 use self-help center funds . This means that trial courts Other civil law 31 will generally differ in where and how they would use Conservatorship 27 Consumer services 26 any additional funding . For example, some courts may Expungements 26 choose to spend a greater proportion of their resources Traffic 10 to begin providing services in new issue areas, while Foreclosures 6 others may choose to spend more resources to expand www.lao.ca.gov 43 analysis full gutter 2018-19 BUDGET the availability of services currently provided . This could centers . Such costs should not exceed a few hundred result in different outcomes by trial court, such as the thousand dollars annually . A comprehensive analysis is number of people served and the benefit generated for necessary to objectively assess all costs and benefits of state court operations . self-help services as well as determine which methods Potential State Fiscal Benefit Uncertain. This of delivering self-help (such as one-on-one services or increased service level to self-represented individuals workshops) are most cost-effective and in which issue could potentially generate state fiscal benefit according areas . For example, such a study could determine to a limited-scope cost benefit analysis carried out in that one-on-one services are most cost-effective 2009 by a private contractor using data from six trial in guardianship or probate cases while workshops courts . This analysis estimated that self-help services are most cost-effective in marital dissolution cases . generally resulted in net state savings from avoiding This information would then allow the Legislature to at least one hearing and reducing court staff time determine what level of funding is merited, where the needed to review and process filings for each case in funding should be targeted to maximize state benefit, which self-help services were provided . However, the and whether funding allocations need to be adjusted analysis acknowledged that it was not a comprehensive elsewhere to account for savings created by self-help cost-benefit analysis of the self-help programs at the services . six trial courts and that it was limited in various ways . Provide Funding Based on Legislative Priorities. For example, the analysis drew conclusions from data Until our recommended comprehensive cost-benefit provided by six trial courts, which (1) did not gather analysis is completed, it is difficult to determine what the same information and (2) gathered data specific level of additional funding is warranted and what to the particular benefits they felt their programs were specific self-help services should be funded (both in producing . This makes it difficult to apply the findings terms of additional and existing funding) . Given that of this study statewide to all courts . Thus, while it is such an analysis would not be available until November possible that self-help services could result in net state 2020, it seems reasonable to provide some level of benefit, it is uncertain whether such benefit will actually additional funding to self-help centers in the interim be realized and to what extent . since they are reportedly turning away individuals Proposed Language Would Increase Legislative seeking assistance . However, we recommend that any Oversight. The Governor’s proposed budget bill additional funding provided be on a limited-term basis language would increase legislative oversight over the through 2020-21—the year in which we recommend use of self-help funding as it would require that a certain that Legislature direct the Judicial Council submit a level of funding is spent annually on self-help services completed cost-benefit analysis report . The Legislature from both the TCTF and IMF . Additionally, the language could then use the findings of the report to determine proposes to revert an unexpended funds to the General the total level of funding it would like to provide and Fund which would likely provide incentive for the judicial how such funding should be used to maximize its branch to fully expend all funds allocated to support impact . Additionally, the Legislature would also likely self-help centers as the funds would not be able to have the results of the self-help projects funded by redirected for other purposes . the one-time Court Innovations Grant Program . This could provide the Legislature with helpful information on LAO Recommendations potentially innovative ideas . Direct Judicial Council to Conduct The exact amount to provide for self-help Comprehensive Cost-Benefit Analysis. We services, which could be higher or lower than the recommend the Legislature adopt budget trailer amount proposed by the Governor, would depend legislation directing the Judicial Council to conduct an on the Legislature’s priorities for overall General Fund independent comprehensive cost-benefit analysis of spending, self-help services, and other court programs . self-help services and provide a report on its findings by The Legislature will also want to consider how it would November 2020 . The Legislature could also authorize like additional funding for self-help centers to be used . the Judicial Council to deduct the costs of such an As part of this process, we recommend the Legislature analysis from the total amount provided for self-help consider the following questions: 44 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET • Should Funding Be Targeted to Particular on an ongoing basis—for the Judicial Council to Issue Areas? The Legislature will want to administer a pilot program to develop and test different determine whether it wants to target funding to activities related to the online adjudication of certain specific issue areas to ensure that a certain level traffic infractions . We recommend that the Legislature of service (such as the number of people served) approve the proposed funding, but provide the is achieved . For example, the Legislature could requested $1 .4 million on a four-year, limited-term basis decide to increase the number of individuals who (through 2021-22), in order to allow the Legislature to could receive assistance in landlord/tenant or assess the extent to which the different activities should conservatorship issues . be expanded, if at all, on a statewide basis . We also • How Can Funding Be Used to Maximize recommend modifying the proposed budget trailer Impact? The Legislature will want to consider legislation to require that each of the proposed online whether the funding can be used in particular ways activities be offered at multiple courts and to require the to maximize the number of individuals served . For Judicial Council to submit an evaluation report at the example, the Legislature could direct a portion of end of the pilot . the funding to the Judicial Council for the creation Background of materials (such as document assembly programs or interactive guides) that can be used statewide Resolution of Traffic Cases. Individuals charged and therefore potentially assist more individuals . with traffic infractions or misdemeanors can resolve Alternatively, the Legislature can require that a their case in various ways . For example, an individual certain amount of funding be used for workshops can choose not to contest a violation and submit or other alternatives to one-on-one assistance that payment to acknowledge conviction of the alleged also service more self-represented individuals . offense, such as by paying a traffic ticket . Alternatively, • Should Innovation and Efficiency Be the individual can choose to contest the violation before Incentivized? The Legislature will want to the court, such as through a trial . Additionally, an consider whether to incentivize innovative or individual charged with a traffic infraction can choose efficient practices so that any augmentation to contest the charges in writing (referred to as a “trial provided by the Legislature would increase by written declaration”) . If the individual is dissatisfied service levels as much as possible . For example, with the decision rendered by the court under this similar to the Court Innovations Grant Program, process, he or she can contest the charges in court, the Legislature could choose to allocate some, with the court deciding the case as if the trial by written or all, of the funding on a competitive basis to declaration never took place . encourage trial courts to deliver self-help services Criminal Fine and Fees. Upon conviction of a in innovative and efficient ways that could criminal offense (including traffic cases), trial courts potentially be duplicated by other courts . typically levy fines and fees upon the convicted individual . As part of the determination of the total amount owed, Approve Budget Bill Language. We recommend individuals may request the court consider their ability to that the Legislature approve the proposed budget bill pay . Judges can reduce or waive certain fines and fees language (adjusted for the actual amount provided) as it or provide an alternative sentence (such as community would ensure that any funding the Legislature decided service in lieu of payment) . Individuals who plead guilty to provide for self-help services could only be used for or are convicted and required to pay fines and fees that purpose . This increases the Legislature’s ability to must either provide full payment immediately or set ensure that such funding is used accountably . up installment payment plans with the court or county collection program . If the individual does not pay on ONLINE TRAFFIC ADJUDICATION time, the amount owed becomes delinquent . State law PILOT then authorizes collection programs to use a variety of tools or sanctions (such as wage garnishments) to LAO Bottom Line. The Governor’s budget proposes motivate individuals to pay their debt . In order for a seven positions and $3 .4 million from the General collections program to halt collection sanctions placed Fund—$2 million on a one-time basis and $1 .4 million www.lao.ca.gov 45 analysis full gutter 2018-19 BUDGET on a particular individual, the individual must pay the total LAO Assessment amount owed, reestablish installment payments, or have Proposed Pilot Appears Reasonable Given the court adjust the total amount owed based on his or Potential Benefits. According to the administration, her ability to pay . Collected revenues support various the intent of the pilot is to increase public access state and local programs . to the courts, streamline traffic court procedures, Governor’s Proposal minimize processing times for traffic filings, and more fairly determine the amount of fines and fees owed for The Governor’s budget for 2018-19 proposes seven traffic infractions . Given these potential benefits, we positions and $3 .4 million from the General Fund— find that the concept of the administration’s proposed $2 million on a one-time basis and $1 .4 million on an pilot merits legislative consideration . We also note ongoing basis—for the Judicial Council to administer that a greater use of the ability-to-pay in determining a pilot program to develop and test different activities the amount of criminal fines and fees that individuals related to the online adjudication of certain traffic owe could increase the likelihood that such fines and infractions at eight trial courts . The one-time funding fees are actually paid—increasing the total amount would be used for the development of online interfaces of fine and fee revenue available for distribution to and integration with trial court case management state and local governments . Moreover, to the extent and other systems, while the ongoing funding and that individuals shift to online adjudication instead of requested positions would provide ongoing support appearing in courts, court costs could be reduced to and oversight of the program . Some of these activities the extent that online adjudication requires less court that would be tested include allowing individuals resources . charged with certain traffic infractions to request a Premature to Request Ongoing Resources continuance, conduct a trial to contest charges rather for a Pilot. The purpose of a pilot program is to than appear in court or through a trial by written test the impact of providing a particular activity declaration, and request the court consider their ability on a limited-term basis, in order to identify any to pay fines and fees . (We note that the Judicial Council implementation challenges and determine whether the received a federal grant to partially offset the cost of activity should be implemented on a larger scale and on the ability-to-pay determination component .) To the an ongoing basis . Accordingly, until the proposed online extent a court offers all of the activities seeking to be adjudication pilot is implemented and evaluated, it is tested and a particular individual utilizes all of them, a premature to provide it ongoing funding as proposed by traffic violation would be adjudicated completely online . the Governor . However, under the Governor’s proposed budget trailer Extent to Which Activities Will Be Tested Online legislation, participating courts would not be required Remains Uncertain. As discussed above, pilot courts to actually offer more than one of these activities and would not be required to test all of the various activities would be prohibited from requiring defendants to which could be offered online, let alone more than engage in any of the online activities offered . one activity . As a result, it is uncertain whether all of Under the proposed budget trailer legislation, the the activities would be tested under the Governor’s pilot courts may authorize court staff to make the proposal . In addition, it is uncertain the extent to which ability-to-pay determinations with the consent of the certain activities would be tested at more than one defendant . However, defendants can request judicial court . This can be important because trial courts have review of any decision made by court staff within ten different practices, case management systems, and days of the decision . Pilot courts that offer the trials users which can impact the costs and benefits of the online would still be required to make trials by written activity . For example, a particular activity may benefit declaration available to defendants . However, in either certain courts and court users more . To the extent case, the defendant would not be permitted to contest that not all of the activities are tested and only one the charges in court if dissatisfied with the decision made court tests a certain activity, it will be difficult for the in the original trial—a departure from existing law for Legislature to determine at the conclusion of the pilot trials by written declaration . Finally, the Judicial Council on whether it should be expanded statewide . is required to report to the Legislature no later than December 31, 2021 on the implementation of the pilot . 46 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET No Requirement to Evaluate Pilot. While the Require Judicial Council Submit an Evaluation Judicial Council would be required to report on the Report. We recommend the Legislature modify the implementation of the online adjudication pilot, it would proposed budget trailer legislation to require the Judicial not be required to conduct an evaluation . Additionally, Council to evaluate the proposed pilot and submit a the proposed budget trailer legislation does not require report to the Legislature by December 31, 2021 on the Judicial Council to include any specific information its findings . Specifically, this evaluation should clearly in its implementation report, such as how frequently compare and contrast the pilot program with the individuals receive adjustments and by what amount or existing system . This should include an assessment impacts on court resources . The absence of a formal of the costs and benefits of the program to court evaluation of the costs, benefits, and effectiveness of the users by their income levels, as well as each of the pilot would likely make it difficult for the Legislature to individual courts . The evaluation should also include an fully assess the pilot after it is completed and determine assessment of how the pilot impacts the total amount whether it should be continued and expanded . of criminal fines and fees assessed, the rate at which individuals complete or stop making payments, and LAO Recommendations the overall impact on the amount of revenue collected Approve Requested Funding, but on for distribution to state and local governments . Finally, Limited-Term Basis. As previously discussed, the the evaluation report should identify any unexpected Governor’s proposal provides the Judicial Council with obstacles or challenges as well as suggestions for $2 million from the General Fund on a one-time basis improvement . Our proposed evaluation would allow the as well as $1 .4 million annually from the General Fund Legislature to determine whether to expand the pilot on an ongoing basis to support seven new positions . program statewide, as well as whether it should be We recommend that the Legislature approve the modified before such an expansion . request, but only provide the $1 .4 million on a four-year limited term basis through 2021-22 . This would provide COUNTY OFFICE OF EDUCATION sufficient time for the pilot to operate for a meaningful OFFSET OF TRIAL COURT period and allow the state to assess the pilot . It would GENERAL FUND SUPPORT also ensure sufficient time to collect the necessary information, as individuals making use of online LAO Bottom Line. We recommend the Legislature adjudication may take months to pay the amount they adjust the trial court offset in 2018-19 upward to owe or to default on what they owe . account for property tax growth in 2017-18 . Our Require Each Activity Be Tested at Multiple preliminary estimates indicate that the upward Courts. To ensure that the Legislature has sufficient adjustment is approximately $6 million, but updated data to assess the impact of each activity that is data will be available in the spring to further refine proposed to be available online, we recommend this estimate . This would provide the Legislature with the Legislature modify the proposed budget trailer additional General Fund resources above the level legislation to require that each activity be tested at assumed in the Governor’s budget . a minimum of three courts . This would help ensure Background that each activity is tested on courts with different processes, systems, and court users—which could County Offices of Education (COEs). Each of impact the costs and benefits of each activity . California’s 58 counties has a COE . COEs oversee the Additionally, the Legislature could consider requiring budgets and academic plans of school districts within all activities be implemented at a minimum of two their jurisdictions, operate certain alternative schools, courts in order to measure the overall impact of all of and provide various optional services to school districts . the activities, which would mean that the entire traffic A primary source of funding for COEs is the Local violation was resolved online . This would help determine Control Funding Formula (LCFF) . Each COE’s annual whether there are any unexpected implementation LCFF allotment is determined by formula . challenges as well as the benefit of fully adjudicating Some COEs Collect “Excess Property Tax” traffic infractions online . Revenue. A COE’s annual LCFF allotment is supported www.lao.ca.gov 47 analysis full gutter 2018-19 BUDGET first with local property tax revenue, with the remainder to further refine this estimate . We will provide updated covered by state Proposition 98 General Fund . Some numbers at that time . COEs do not receive state support because they collect enough property tax revenue in a given year to TRIAL COURT CONSTRUCTION cover their entire LCFF allotment . In virtually all of these PROJECTS cases, the COEs collect more in property tax revenue than their LCFF allotment . The amount collected above LAO Bottom Line. The Governor’s 2018-19 budget the LCFF allotment is known as excess property tax . proposes to use lease revenue bonds backed from Because the amount of property tax revenue collected the General Fund—rather than an existing court can change from year to year, the amount of excess construction account—to finance the construction of property tax also can change from year to year . ten trial court projects that are currently on hold or have Offset of General Fund Support for Trial been indefinitely delayed due to a lack of revenue in the Courts. State law requires that any excess property account . While the Governor’s proposal would allow the tax revenues collected by COEs beyond their LCFF projects to proceed to construction, it does not address allotments be used to offset state General Fund support key underlying problems with the state’s current trial of trial courts . The transfer occurs at the direction of court construction system—such as a lack of resources DOF and the State Controller’s Office the year after the to pay existing debt service for court construction taxes are collected . For example, excess property taxes projects already completed . As such, we recommend collected in 2016-17 offset the state’s General Fund the Legislature consider an alternative approach to trial support of trial courts in 2017-18 . court construction . Our recommended approach would generally overhaul the existing system by eliminating the Governor’s Proposal state’s two construction accounts, shifting responsibility The Governor’s budget estimates that the amount for funding trial construction projects to the General of excess property tax revenue available in 2018-19 will Fund, and increasing legislative oversight of funded not increase over the 2017-18 level of $48 million . projects . This would help ensure that those projects that are legislative priorities and have the greatest LAO Assessment needs are funded, rather than being constrained by existing declining revenue sources . To the extent the Underestimate of Revenue Available for Offset. Legislature would like to maintain the existing court Our preliminary analysis of property tax growth projects construction system, we recommend modifying the higher levels of excess property tax revenues available to Governor’s proposal to address some of the concerns offset General Fund support of trial courts . Specifically, we raised about the proposal . we estimate that $54 million in excess property tax revenues will be available in eight counties in 2017-18 . Background This is $6 million above the Governor’s estimate . We estimate the annual excess tax revenue will continue to Trial Court Construction Supported by Two increase and will exceed $100 million by 2020-21 . Special Fund Accounts. Chapter 1082 of 2002 (SB 1732, Escutia)—also known as the Trial Court LAO Recommendation Facilities Act of 2002—shifted ownership and responsibility for maintenance of nearly all trial court Adjust Offset to Reflect Availability of Additional facilities from the counties to the state . This legislation General Fund Resources. We recommend the also gave the Judicial Council the authority to construct Legislature adjust the trial court offset in 2018-19 future trial court facilities—including authority to upward to account for property tax growth in 2017-18 . establish priorities to assess proposed projects, select This would provide the Legislature with additional projects to recommend for funding, and select from a General Fund resources above the level assumed in the range of construction delivery methods . The state has Governor’s budget . Our preliminary estimates indicate supported trial court construction through the following that the offset should be adjusted upward by $6 million, two accounts: but note that updated data will be available in the spring 48 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET • State Court Facilities Construction Fund and ICNA ($1 .2 billion) to other funds since 2009-10 . (SCFCF). Senate Bill 1732 increased certain Of the amount, $550 million (or 39 percent) was criminal and civil fines and fees and required transferred to the General Fund with the remaining that the revenues be deposited in SCFCF to $848 million (or 61 percent) transferred to the TCTF, finance trial court construction projects and which supports trial court operations . Currently, other facility-related expenses . (SCFCF also a total of $55 .5 million is redirected annually from receives some miscellaneous revenues .) The these accounts to the TCTF . These redirections were legislation directed the Judicial Council to generally made during the fiscal downturn and were annually recommend trial court projects to be intended to reduce pressures on the General Fund funded from SCFCF . Subsequent statute enacted or to offset reductions made to trial court operations . in 2007 prohibited the Judicial Council from Additionally, both SCFCF and ICNA loaned a total of committing to any additional expenditures above $440 million to the General Fund . Of this amount, only the amount appropriated in the 2007-08 Budget a $90 million loan from ICNA remains and is currently Act to ensure that sufficient funding would be expected to be repaid in 2021-22 . available to finance already approved projects . Decline in Revenue Deposited Into Construction Additional expenditures would only be permitted Accounts. In addition to funds being transferred and if SCFCF received additional funds capable of loaned from SCFCF and ICNA, the amount of revenue supporting new expenditures . deposited into both accounts has declined steadily • Immediate and Critical Needs Account for roughly the past ten years . As shown in Figure 11 (ICNA). Chapter 311 of 2008 (SB 1407, Perata) (see next page), it is currently estimated that SCFCF subsequently increased certain criminal and will receive total revenues of $78 million in 2018-19—a civil fines and fees for deposit into a new court decline of about $65 million (or 46 percent) since construction account—ICNA . (ICNA also receives peak revenues in 2008-09 . Similarly, ICNA revenues some miscellaneous revenues .) Senate Bill 1407 are projected to be nearly $195 million in 2018-19—a authorized the use of ICNA to finance up to decline of $135 million (or 41 percent) since peak $5 billion in trial court construction projects revenues in 2010-11 . and other facility-related expenses, such as the All Planned SCFCF Projects Completed. At modification of courthouses . It also gave the this time, the judicial branch has completed the Judicial Council the responsibility for selecting construction of all of the 14 trial court construction the specific courthouses that it determined were of “immediate” Figure 10 or “critical” priority need for Transfers From SCFCF and ICNA replacement, generally due to the structural, safety, or capacity (In Millions) shortcomings of the facilities . SCFCFa ICNAb Total However, SB 1407 prohibited 2009-10 $40.0 — $40.0 the Judicial Council from 2010-11 25.0 $73.4 98.4 approving projects that could 2011-12 70.0 453.3 523.3 not be fully financed with the 2012-13 59.5 240.0 299.5 fine and fee revenue deposited 2013-14 5.5 250.0 255.5 into ICNA . In total, the Judicial 2014-15 5.5 10.0 15.5 2015-16 5.5 50.0 55.5 Council initially approved 41 2016-17 5.5 50.0 55.5 ICNA projects . 2017-18 (estimated) 5.5 50.0 55.5 $1.4 Billion Redirected From Totals $221.9 $1,176.7 $1,398.6 a Construction Accounts Since All transfers to the Trial Court Trust Fund (TCTF) except $40 million in 2009-10 which was transferred to the General Fund. 2009-10. As shown in Figure 10, a b All transfers to TCTF except $310.3 million in 2011-12 and $200 million in 2013-14 which were total of nearly $1 .4 billion has been transferred to the General Fund. SCFCF = State Court Facilities Construction Fund and ICNA = Immediate and Critical Needs Account. transferred from SCFCF ($222 million) www.lao.ca.gov 49 analysis full gutter 2018-19 BUDGET projects financed by SCFCF . Figure 11 Figure 12 lists the specific SCFCF Revenues Deposited Into projects . The last projected to Trial Court Construction Accounts be completed was the Stockton courthouse in the spring of 2017 . (In Millions) Not Enough Funding to $350 Complete All Planned ICNA Projects. At the time of this 300 Immediate and Critical analysis, only 12 of the planned Needs Account (ICNA) 250 ICNA-financed projects have been completed . (An alternative financing 200 method was used to construct the 150 Long Beach courthouse—which was not one of the original ICNA 100 State Court Facilities selected projects . The service Construction Fund (SCFCF) 50 payments for this courthouse are being paid from ICNA and is thus considered the 12th completed 2006-07 2008-09 2010-11 2012-13 2014-15 2016-17 2018-19 (Projected) ICNA project .) However, as shown in Figure 13, the Judicial Council took action in 2012-13 to indefinitely delay 11 projects in response to Similarly, for 2017-18, ICNA is estimated to the significant transfers from ICNA to the General Fund have nearly $225 million in various ongoing funding and the TCTF—meaning these were never initiated . In commitments, which is higher than the account’s addition, 16 ICNA projects that had been initiated were projected annual revenue of $212 million . These put on hold in 2016-17 due to the lack of available commitments include: (1) $95 million in debt service revenues . The Judicial Council also canceled three costs on previously approved projects, (2) $25 million ICNA projects . for facility modification projects, (3) $50 million for trial Not Enough Funds to Support Current Obligations. The continued decline in fine and fee Figure 12 revenues deposited into SCFCF and ICNA, as well Summary of SCFCF Trial Court as prior-year transfers from the accounts, make it Construction Projects difficult to address existing commitments in both funds (such as debt service for completed courthouses and Completed Projects (14 Projects) funding for facility modification projects) . For 2017-18, Calaveras—San Andreas Courthouse SCFCF is estimated to have about $146 million in Contra Costa—Arnason (Pittsburg) Justice Center various ongoing funding commitments—significantly Fresno—Sisk Courthouse higher than the $86 million in projected revenue . Fresno—Juvenile Justice Delinquency Court These commitments include: (1) $57 million in debt Lassen—Susanville Hall of Justice service costs for completed projects (which grows Madera—New Madera Courthouse Merced—Merced County Courthouse to $82 million in 2018-19 due to the completion Mono—Mammoth Lakes Courthouse of a project), (2) $40 million for facility modification Plumas/Sierra—Plumas/Sierra Regional Courthouse projects, (3) $38 .3 million to support judicial branch Riverside—Banning Justice Center facility-related personnel costs and operating expenses, San Benito—Hollister Courthouse and (4) $5 .5 million for trial court operations . The fund San Bernardino—San Bernardino Justice Center has supported spending above annual revenue by San Joaquin—New Stockton Courthouse drawing down the fund balance that accumulated in Tulare—South County (Porterville) Justice Center prior years . SCFCF = State Court Facilities Construction Fund. 50 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET court operations to mitigate the impact of prior-year Specifically, the administration proposes to use lease budget reductions, and (4) $55 million for service revenue bonds backed from the General Fund—rather payments for the Long Beach courthouse, which than ICNA—to finance the construction of ten trial grows annually . Like the SCFCF, ICNA has supported court projects totaling about $1 .3 billion by 2019-20 . spending above annual revenue by drawing down the These ten projects were originally planned to have fund balance that accumulated in prior years . Absent been funded from ICNA—nine were placed on hold any changes in future expenditures, both SCFCF and and one was indefinitely delayed (but received one-time ICNA are currently projected to become insolvent in the resources for pre-construction activities) due to the next few years . decline in ICNA revenues . As shown in Figure 14 (see next page), the budget proposes selling $343 million Governor’s Proposal in lease-revenue bonds to finance the construction The Governor’s 2018-19 budget proposes a new of five projects in 2018-19 and another $972 million fund source to support trial court construction projects . to finance the construction of another five projects in 2019-20 . The annual debt service on these bonds is Figure 13 Summary of ICNA Trial Court Construction Projects Completed Projects (12 Projects) Projects On Hold (16 Projects) Alameda—New East County (Dublin) Courthouse El Dorado—New Placerville Courthouse Butte—North Butte County (Chico) Courthouse Glenn—Renovation and Addition to Willows Courthouse Los Angeles—Deukmejian (Long Beach) Courthousea Imperial—New El Centro Courthouse Kings—New Hanford Courthouse Inyo—New Bishop Courthouse Merced—Los Banos Courthouse Lake—New Lakeport Courthouse San Diego—New San Diego Courthouse Los Angeles—New Eastlake Courthouse San Joaquin—Juvenile Justice Center Renovation Los Angeles—New Mental Health Courthouse (Hollywood Courthouse)b Santa Clara—Family Justice Center Mendocino—New Ukiah Courthouse Solano—Old Solano County Courthouse Renovation Riverside—New Indio Juvenile and Family Courthouse Sutter—New Yuba City Courthouse Riverside—New Mid-County Civil Courthouse Tehama—New Red Bluff Courthouse Santa Barbara—New Santa Barbara Courthouse Yolo—New Woodland Courthouse Shasta—New Redding Courthouse Siskiyou—New Yreka Courthouse Projects Canceled (3 Projects) Sonoma—New Santa Rosa Criminal Courthouse Los Angeles—Lancaster Courthousec Stanislaus—New Modesto Courthouse Alpine—Markleeville Courthouse Tuolumne—New Sonora Courthouse Sierra—Downieville Courthouse Projects Indefinitely Delayed (11 Projects) Fresno—County Courthouse Kern—Delano Courthouse Kern—Mojave Courthouse Los Angeles—Glendale Courthouse Los Angeles—Santa Clarita Courthouse Los Angeles—Southeast Los Angeles Courthouse Monterey—South Monterey County Courthouse Nevada—Nevada City Courthouse Placer—Tahoe Area Courthouse Plumas—Quincy Courthouse Sacramento—New Sacramento County Courthoused a Project was financed as a public-private partnership. However, ICNA is now paying the financing payments related to this project. b Original construction project was canceled, but was replaced with a renovation of an existing courthouse to house this facility. c Original construction project was canceled, but was included as a facility modification project in 2016-17. d One-time funding was provided to complete pre-construction activities only. ICNA = Immediate and Critical Needs Account. www.lao.ca.gov 51 analysis full gutter 2018-19 BUDGET estimated to total about $102 million annually for nearly reasons . First, as discussed previously, SB 1732 and 25 years . Additionally, the Governor’s budget proposes SB 1407 delegated significant authority to the Judicial $32 .2 million from ICNA for three projects to complete Council to determine the priorities for court construction pre-construction design activities so that they can and select specific projects based on its priorities . move into construction in 2019-20 . According to the It is unclear whether the same projects would have administration, the proposal (1) recognizes that revenue been selected for funding had the Legislature been deposits into SCFCF and ICNA are lower than originally involved in the assessment and selection of projects, expected and are insufficient to support further projects particularly given the limited resources available in in the near future and (2) seeks to fund those projects ICNA . Second, these ten proposed projects were first that are closest to construction . assessed and selected by the Judicial Council nearly a decade ago . Accordingly, it is unclear whether other LAO Assessment trial court projects currently on hold—such as the Administration’s Proposal Effectively Backfills Los Angeles mental health courthouse—or projects Transfers From Construction Accounts. As that were not previously selected would be a greater discussed previously, $1 .4 billion has been transferred priority if a reassessment were done . For example, from the two construction accounts to support the other facilities may have deteriorated at a faster rate General Fund and trial court operations since 2009-10 . than those currently proposed for funding . Finally, the The Governor’s proposal to finance about $1 .3 billion Judicial Council reports about $1 .6 billion in deferred in lease-revenue bonds—to be repaid from the General maintenance needs at trial court facilities . Providing Fund—effectively backfills the $1 .4 billion that was some funding for this purpose could potentially be previously transferred from the construction accounts a higher priority if it extends the length of time that and could have financed additional trial court projects . existing court facilities could continue to be used . Because these transferred funds were originally Does Not Provide Long-Term Solution for Trial intended for facility-related purposes, the Governor’s Court Construction. The administration’s proposal proposal is reasonable . does not provide a long-term solution for the trial court Unclear Whether Proposed Projects Are of construction program . This is because the proposal Highest Priority. While the ten projects that the does not address three key problems that exist with the Governor proposes to fund represent those projects current approach to trial court construction: closest to construction, it is unclear whether they are • Continued Decline in Fine and Fee Revenue the highest priority for funding at this time, for several Deposited Into ICNA and SCFCF. The major Figure 14 Trial Court Construction Projects Funded by Administration’s Proposal (In Millions) Construction Estimated Debt Service Courthouse Project 2018-19 2019-20 Annual Total Glenn—Renovation and Addition to Willows Courthouse $38.3 $3.2 $75.9 Imperial—New El Centro Courthouse $41.9 3.4 80.9 Riverside—New Indio Juvenile and Family Courthouse 45.3 3.5 83.7 Riverside—New Mid-County Civil Courthouse 75.8 6.1 146.2 Sacramento—New Sacramento County Courthouse 459.8 32.5 780.7 Shasta—New Redding Courthouse 138.8 11.2 267.7 Siskiyou—New Yreka Courthouse 59.2 4.6 109.3 Sonoma—New Santa Rosa Criminal Courthouse 160.7 12.9 310.1 Stanislaus—New Modesto Courthouse 237.2 20.0 479.5 Tuolumne—New Sonora Courthouse 57.7 4.6 111.4 Totals $343.0 $971.9 $101.9 $2,445.4 52 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET sources of revenue to ICNA and SCFCF—civil by effectively backfilling the transfers from SCFCF and and criminal fines and fees—is problematic . ICNA, it does not address key underlying problems with This is because, on net, this type of revenue has the state’s current trial court construction system as steadily declined over the past ten years and discussed above . In order to effectively address these may continue to decline due to factors outside of issues we recommend that the Legislature consider the Legislature’s control (such as the number of an alternative approach to trial court construction . Our tickets written or the number of civil cases filed) . recommended approach would generally overhaul the Thus, it will likely be difficult for these accounts to existing system by eliminating the two construction fully meet existing expenditure obligations or to accounts, shifting full responsibility for funding trial finance any additional projects in the near future . construction projects to the General Fund, and • Insufficient Revenue to Pay Existing Debt increasing legislative input on funded projects . Service for Completed Projects. As discussed The key features of our proposed approach include: above, absent any changes in revenues or • Shift Funding Responsibility for Trial Court existing ongoing expenditures, both funds are Construction to the General Fund. Given the projected in the near future to lack sufficient instability of the civil and criminal fine and fee revenue to pay existing debt service for the revenue deposited into SCFCF and ICNA, we completed projects . This means that additional recommend that all current and any future trial General Fund resources—potentially ranging court construction projects be funded from the from about $90 million to $140 million annually General Fund . This would help ensure that the for about 15 years—will likely be required to number of projects approved and completed is pay for this debt service . Such a General Fund determined by the Legislature rather than the obligation was not anticipated by the Legislature amount of revenue available in SCFCF and ICNA . when it established SCFCF and ICNA to fully pay It also would help ensure that the Legislature for the approved construction projects, as well as is fully informed of the potential impact on the approved budget requests for these projects . The General Fund before approving any projects . Governor’s proposal not only does not address Additionally, this shift would help ensure that this problem, but it also increases the potential existing debt obligations are addressed . However, burden on the General Fund by proposing to fund this would now require trial court projects to ten additional projects . compete with other General Fund priorities— • No Long-Term Plan for Funding Future which could mean that no projects move forward Construction Projects, Including Those on in certain years . Hold. At this time, the administration has not • Shift SCFCF and ICNA Revenues to General provided a long-term plan for funding future Fund. To partially offset the costs of the construction projects, including those ICNA debt service shifted to the General Fund, we projects currently on hold or indefinitely delayed . recommend the Legislature change state law to For example, the administration has not specified deposit criminal and civil fines and fees, as well whether it also intends to fund the other seven as any other revenue, that would otherwise have ICNA projects currently on hold—with an been deposited into the SCFCF and ICNA, into estimated annual debt service of $38 million for the General Fund . We note that, due to legal nearly 25 years—from the General Fund in the limitations on the way the revenues can be used, future, or if the projects will continue to be on hold the civil fee revenue may need to be deposited until sufficient revenues become available in ICNA . into the TCTF for the support of trial court operations with a corresponding reduction in the LAO Recommendations total amount of General Fund support transferred Recommend Alternative System for Court to the TCTF . Construction. While the Governor’s proposal would • Shift Nonconstruction Related ICNA and allow ten specific projects to proceed to construction SCFCF Expenditures to General Fund. In www.lao.ca.gov 53 analysis full gutter 2018-19 BUDGET view of our recommendation to shift all SCFCF Modify Governor’s Proposal to Address Some and ICNA revenues into the General Fund, we Key Issues if Existing System Is Maintained. To the also recommend the Legislature appropriate extent the Legislature would like to maintain the existing $159 million annually from the General Fund to court construction system, we recommend modifying the maintain funding levels for the nonconstruction Governor’s proposal to address some of the concerns related purposes which currently receive support we raised about the proposal . While these proposed from SCFCF and/or ICNA . Specifically, we modifications would not provide a long-term solution for recommend appropriating: (1) $65 million for all of the issues facing the construction program, they facility modification projects, (2) $55 .5 million would provide some ongoing improvements . Specifically, for the support of trial court operations, and we would recommend the Legislature: (3) $38 .6 million to support judicial branch • Consolidate SCFCF and ICNA. We find that facility-related personnel costs and operating there is no rationale for needing to maintain two expenses . (We note that the amount appropriated separate trial court construction accounts . With for facility modification projects would decrease both accounts currently projected to become to $50 million beginning in 2024-25 due to the insolvent in the next few years, monitoring a expiration of an SCFCF budget augmentation single account makes it easier to track how request that was approved as part of the much total revenue is available to meet existing 2014-15 budget .) obligations and how much General Fund would • Appropriate Funding for Construction Projects likely be needed to backfill the decline in revenue . Based on Legislative Priorities. Under our Consolidating the two accounts also would alternative approach, the Legislature would ensure that no new projects move forward unless determine which specific projects to fund based there is sufficient overall revenue to support on its priorities, which may or may not include any them—potentially reducing any General Fund of the projects proposed by the Governor . To help backfill needed in the future . However, this action the Legislature in its deliberations, we recommend would not address the overall instability of the fine that the Judicial Council be required to reassess and fee revenue source . trial court facility needs, as project needs may • Appropriate Funding for Trial Court Operations have changed since its last assessment more From General Fund Rather Than Construction than a decade ago . This could potentially result in Accounts. We recommend the Legislature a different list of projects than currently proposed terminate the current court construction transfers by the judicial branch . The Legislature could also to support trial court operations—$5 .5 million from direct the judicial branch to include certain factors SCFCF and $50 million from ICNA—and instead it believes should be considered, such as how appropriate $55 .5 million from the General Fund much longer the building could potentially last for trial court operations . Revenues deposited without violating health standards . into the construction accounts were originally Overall, our recommended approach to court intended for facility-related purposes and were then construction would provide a long-term solution to the diverted away due to the recession . Given that the problems facing the current system . Specifically, the recession is over, it makes sense that construction number of trial court construction projects would no revenues are no longer used for non-facility related longer be constrained by the construction accounts’ purposes . This action would increase the amount unstable funding sources and would be based on of revenue available for existing facility-related legislative priorities . Additionally, the Legislature would expenditures and would likely delay when General be fully aware of the total amount of General Fund Fund resources are necessary to cover these needed before approving a project—rather than being funds’ existing obligations . While this action would unexpectedly required to provide General Fund backfills maintain trial court operation funding levels, it due to declines in fine and fee revenue . would increase the overall amount of General Fund support to trial courts . 54 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET • Provide New Construction Account With • Direct Judicial Branch to Submit Long-Term $102 Million General Fund Annually for Fund Condition Statement With Each 25 Years. As noted above, the Governor’s Construction Funding Request. In order proposal effectively backfills funds that were to ensure that the Legislature has sufficient transferred from the construction accounts that information to determine whether a proposed could have been used to construct new projects . project should begin or continue to move forward, As such, we recommend transferring from the we recommend the Legislature direct the judicial General Fund to a consolidated construction branch to submit a long-term fund condition account an amount equal to the amount included statement for the construction account with each in the Governor’s proposal—$102 million annually construction funding request . This action would for 25 years—but require the Judicial Council to require the judicial branch to demonstrate that the ensure that all existing debt service obligations fund has sufficient revenues to meet all existing (and other nonconstruction facility-related obligations in addition to the new requested obligations) are addressed before using the project . revenue to finance any new projects . At • Direct Judicial Council to Reassess Trial Court minimum, this action—combined with the other Facility Needs. A reassessment of trial court recommendations—would likely ensure that the facility needs would help the Judicial Council construction account remains solvent to the determine whether the proposed projects have extent that fine and fee revenue does not continue the greatest needs under the judicial branch’s to decline significantly . However, while existing existing system for assessing needs . This debt obligations would be met, it is unclear on the updated assessment could also be considered extent to which new trial court projects (such as by the Legislature when determining whether those proposed by the Governor) would be able to approve subsequent construction budget to be financed in the near future . requests . CALIFORNIA DEPARTMENT OF JUSTICE OVERVIEW ANTITRUST WORKLOAD Under the direction of the Attorney General, DOJ LAO Bottom Line. We recommend that the provides legal services to state and local entities, brings Legislature not approve the Governor’s multiyear plan lawsuits to enforce public rights, and carries out various to expand DOJ’s Antitrust Law Section by 23 positions law enforcement activities . The DOJ also collects over the next several years . Rather, we recommend criminal justice statistics from local authorities; manages the Legislature only approve the nine additional the statewide criminal history database; and conducts positions and $1 .8 million proposed for 2018-19, given background checks required for employment, licensing, the uncertainty about (1) whether there is sufficient and other purposes . In addition, the department workload to justify the remaining 14 positions and provides various services to local law enforcement (2) the ability of these positions to generate sufficient agencies, including providing forensic services revenue to support themselves . We also recommend to local law enforcement agencies in jurisdictions the Legislature direct DOJ to submit a report by without their own crime laboratories . The Governor’s December 1, 2020 on certain fiscal and performance 2018-19 budget proposes a total of $926 million to measures (such as number of cases pursued and support DOJ—roughly the same amount as the revised litigated as well as the amount of monetary recoveries 2017-18 spending level . Of the total amount proposed, generated) to monitor the impact of these provided $245 million is from the General Fund . positions . www.lao.ca.gov 55 analysis full gutter 2018-19 BUDGET Background should have been pursued as well as backlogging some cases . However, the exact number of cases that DOJ’s Antitrust Law Section is responsible for the section would have otherwise pursued is unknown . maintaining a competitive business environment in Finally, DOJ anticipates that various factors, such California by ensuring businesses comply with federal as vacancies at the federal antitrust agencies and a and state antitrust laws . The section’s major activities reported increase in merger activity, could result in more include investigations and litigation around business cases for the state to pursue . As such, an increase in mergers and acquisitions as well as anticompetitive resources for the section could allow the state to better behavior (such as price-fixing) . Cases that are litigated address anticompetitive business behavior and/or can result in injunctive relief (where a party is directed obtain additional monetary awards or settlements . to act or not act in particular manner), monetary Total Level of Additional Workload Unclear. awards, or monetary settlements . In 2017-18, the While some additional resources appear reasonable, section received $8 .4 million in funding—$4 .7 million the total level of additional workload facing the section (56 percent) from the General Fund, $2 .6 million is unclear . For example, it is unclear how many new (31 percent) from the Attorney General Antitrust cases—beyond those which the section currently lacks Account, and $1 .1 million (13 percent) from the Unfair resources to take—should be pursued . It is also unclear Competition Law Fund . (The latter two special funds how many additional cases will actually be pursued due generally receive revenues from litigation settlements or to factors such as the inaction by the federal antitrust awards .) This funding currently supports approximately agencies or an increase in merger activity . In addition, 25 positions in San Francisco and Los Angeles . the total number positions needed to process the Governor’s Proposal workload is unclear as the type and complexity of the cases DOJ would pursue is not known . The Governor’s budget for 2018-19 proposes a Unclear Whether Sufficient Resources Will Be three-year plan for providing an additional 23 positions Available to Support Requested Positions. It is and $4 .5 million on an ongoing basis to the Antitrust also unclear whether all of the requested positions will Law Section by 2020-21 . Specifically, the plan generate enough revenue for the Attorney General proposes nine positions and $1 .8 million (Attorney Antitrust Account to support themselves . According General Antitrust Account) in 2018-19 to expand to DOJ, only 20 percent to 25 percent of investigated the section’s capacity to pursue cases . Under the cases currently turn into litigation with the potential to Governor’s proposal, this increases by an additional generate revenue for the Attorney General Antitrust nine positions and $1 .7 million in 2019-20 and by an Account . First, it is unclear how this percentage could additional five positions and $1 million in 2020-21 . change with the requested resources . This percentage Upon full implementation, the plan would double the could either decrease or increase depending on the staffing of the Antitrust Law Section . The administration specific cases DOJ chooses to pursue . For example, and the department indicate that these resources are this percentage could go down if DOJ decides to needed to reduce the workload of its existing attorneys pursue cases it would otherwise have decided not to to more manageable levels as well as expand the pursue based on its estimates of potential success . section’s capacity to take on more cases . On the other hand, this percentage could go up to the LAO Assessment extent DOJ pursues cases that it believes has merit, but are not pursued currently only due to a lack of Additional Resources Needed to Address resources . Second, other factors—such as the types Increased Workload. The Antitrust Law Section’s of cases pursued and the remedies sought in such staffing levels have remained constant since 2013-14 . actions—can also impact the amount of revenue However, the section reports that workload has generated . For example, cases that seek injunctive relief increased to the point that its deputy attorney can benefit California consumers and businesses but generals are each working, on average, approximately may not generate monetary recoveries that can support 20 percent more hours than normal . It has also resulted the section’s positions . Additionally, the impacts of the in DOJ not taking cases that the section believes additional positions may not be quickly realized . This is 56 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET because some of the section’s cases can take years to Legislature to determine the appropriate level of resolve, which could delay the receipt of any monetary ongoing resources needed in 2019-20 . awards or settlements . To the extent the positions Background cannot support themselves, the state may either need to identify alternative sources of funding (such as the Bureau of Gambling Control. The Bureau of General Fund) or eliminate the positions in the future . Gambling Control within DOJ and the California Gambling Control Commission jointly regulate the LAO Recommendation state’s gambling industry—which currently includes Provide Funding for Only Nine Positions. We 88 cardrooms and 62 tribal casinos . The bureau recommend the Legislature only provide DOJ with the has investigation, compliance, and enforcement first year of resources requested by the Governor’s responsibilities, while the commission has policymaking, budget—specifically the nine positions and $1 .8 million licensing, and adjudication responsibilities . In 2017-18, to support increased Antitrust Law Section activities in the bureau received $32 million to support its workload . 2018-19 . These additional resources could generate Of the total, 43 percent comes from the Gambling state benefit, particularly since the section is currently Control Fund—which receives revenue from the not pursuing some cases which it believes have cardroom industry—and the remainder from tribal merit . Additionally, to ensure that sufficient resources gaming revenues . are available on an ongoing basis to support these Cardroom-Related Licensing Responsibilities. positions, we recommend the Legislature direct DOJ State law generally requires businesses, business to submit a report by December 1, 2020 on certain owners, and employees who operate, work, or benefit fiscal and performance measures (such as number of from gaming activities to be licensed . Businesses cases pursued and litigated as well as the amount of or individuals submit applications to either obtain a monetary recoveries generated) to monitor the impact license or renew a license, along with a processing of these provided positions . fee, to the bureau . The bureau is then responsible for However, the uncertainty in the total level of conducting background investigations and making additional workload and whether the requested recommendations to the commission on whether positions will be able to support themselves makes licenses should be approved, renewed, or denied . The it difficult to justify the remaining positions proposed length of time it takes to conduct such investigations by the Governor . To the extent that DOJ is able to depends on the type of license . For example, the (1) demonstrate the impact of the nine additional investigations related to business owner license positions requested for 2018-19 and (2) provide applications can be significantly more extensive than more definitive estimates of additional workload, the for a regular cardroom employee . These investigations Legislature could consider a request for additional include various inquiries, such as a criminal background positions and funding in the future . check and a review of financial statements . The Cardroom Gaming Unit within the bureau is CARDROOM-RELATED LICENSING responsible for the bureau’s cardroom-related licensing responsibilities . LAO Bottom Line. We recommend that Limited-Term Resources Provided in Recent the Legislature provide $1 .6 million from the Years. When the bureau was first created in 1998, Gambling Control Fund on a one-time basis in the Cardroom Gaming Unit was provided with 2018-19 to support 12 positions previously provided 20 permanent analytical positions . Over time, a backlog for cardroom-related licensing investigations for one of background investigation cases developed and additional year, rather than on an ongoing basis as steadily increased . As shown in Figure 15 (see next proposed by the Governor . This would allow DOJ to page), the unit was provided additional positions and continue to reduce the backlog of cardroom-related funding on a limited-term basis in both 2015-16 and license investigations and collect additional workload 2016-17 to help reduce the backlog—specifically, data . The additional workload data would allow the 12 analytical positions in 2015-16 for three years and 20 additional analytical positions in 2016-17 for three www.lao.ca.gov 57 analysis full gutter 2018-19 BUDGET Figure 15 Summary of Existing Analytical Positions for Cardroom‑Related Workload 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 Permanent positions 20 20 20 20 20 20 2015-16 limited term positions — 12 12 12 — — 2016-17 limited term positions — — 20 20 20 — Totals 20 32 52 52 40 20 years from the Gambling Control Fund . As the figure it generally takes analysts months before they become shows, the limited-term positions will begin to expire in fully proficient at processing background investigations . the budget year . As such, workload metrics collected at the end of 2017-18 will be a much more accurate representation Governor’s Proposal of the full impact of all of the limited-term positions . The Governor’s budget for 2018-19 proposes Difficult to Determine Appropriate Level of $1 .6 million from the Gambling Control Fund to Ongoing Resources. Given the uncertainty of the continue on an ongoing basis the 12 limited-term full-impact of the recently-provided limited-term positions that are set to expire at the end of the current positions, it is difficult to determine the appropriate year . The administration and department indicate that level of ongoing resources needed to (1) eliminate the resources are needed on an ongoing basis to continue backlog and (2) prevent the creation of an extensive reducing the backlog and prevent it from growing . backlog . DOJ projects that approximately 50 analysts will close 5,561 cases in 2017-18, which means each LAO Assessment analyst closes an average of 111 cases . However, analysts historically have closed a much larger number Backlog Is Declining, but Still Remains. The of cases on average annually . This suggests that the additional resources provided by the Legislature total number of cases closed in 2017-18 should be in recent years has helped reduce the backlog higher—potentially by several hundred . To the extent from 2,696 cases at the beginning of 2015-16 to this occurs, DOJ would clear the backlog more quickly 1,991 cases through the end of 2016-17 . However, than it currently projects . It is unclear why DOJ projects given current workload estimates, a backlog is likely to that, on average, its analysts will close fewer cases . continue through 2018-19 because it is unlikely that the Additionally, workload data collected in 2017-18 unit will be able to close all incoming cases as well as (particularly the actual number of total cases closed) will address the backlog in 2017-18 . be helpful to determine how many of the total additional Full Impact of Limited-Term Resources Unclear. limited-term analysts are needed to process ongoing The full impact of all of the limited-term resources workload and avoid a backlog . If analysts close cases provided by the Legislature is currently unclear . As in 2017-18 at a rate similar to their historic ones, it is shown in Figure 16, this is because 2017-18 is the first possible that not all of the 12 requested positions will year in which nearly all 32 analytical positions provided be needed on an ongoing basis . on a limited-term basis were filled . Moreover, given the complexity of some of the background investigations, LAO Recommendation Provide One-Year Limited-Term Figure 16 Funding. We recommend that the Number of Filled Limited‑Term Positions by Fiscal Year Legislature provide $1 .6 million from the Gambling Control Fund to support 2015‑16 2016‑17 2017‑18 the 12 positions provided in 2015-16 Approved positions 12 32 32 for one additional year, rather than on Filled positions 8 15 30 an ongoing basis as proposed by the Percent of positions filled 67% 47% 94% Governor . This would allow DOJ to 58 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET continue to reduce the backlog and collect additional authorized a $25 million General Fund loan for start-up workload data . Under our recommendation, all of costs . the Cardroom Gaming Unit’s limited-term positions DOJ Implementation of Proposition 63 will expire at the end of 2018-19 . During budget deliberations for the 2019-20 budget, the additional In April 2017, an Executive Order authorized the workload data will allow the Legislature to determine $25 million General Fund loan to the Ammunition the appropriate level of ongoing resources needed . Safety and Enforcement Special Fund . Because this fund is continuously appropriated, DOJ did not need PROPOSITION 63 IMPLEMENTATION to seek legislative approval to increase its position or budgetary authority to begin using the funds . DOJ used LAO Bottom Line. We recommend that the these resources to hire staff, engage consultants, and Legislature adopt budget trailer legislation requiring DOJ purchase necessary equipment and supplies (such to report annually by January 1 on its Proposition 63 as hardware and software to support the ammunition workload from the prior-fiscal year . Such information transactions) . As shown in Figure 17, DOJ estimates would help the Legislature conduct oversight to ensure that the $25 million will be exhausted by the end of that Proposition 63 fee revenues are used appropriately 2018-19 . In total, DOJ estimates that 55 positions and that the fee levels are sufficient . will have been established to address the ammunition sale-related workload . These resources will be Overview of Proposition 63 allocated to its Division of Law Enforcement, which Proposition 63, which was approved by voters in is predominantly responsible for processing requests November 2016 and amended by Chapter 55 of 2016 as well as its California Justice Information Services (SB 1235, de León), made various changes to state Division, which is predominantly responsible for firearm and ammunition laws, including changing how updating and maintaining DOJ databases . the state regulates the sale of ammunition . Specifically, LAO Assessment beginning July 1, 2019, Proposition 63—as amended by Chapter 55—requires licensed ammunition dealers Continuous Appropriation Could Make Oversight to check with DOJ at the time of purchase that Difficult. Given the continuous appropriation of the individuals seeking to purchase ammunition are not Ammunition Safety and Enforcement Special Fund, prohibited from purchasing it . DOJ is authorized to DOJ is not required to submit requests through the charge such individuals up to $1 per transaction . These state’s normal budget process for changes in position transaction fees are then required to be deposited into or budget authority . Such requests typically provide the newly created Ammunition Safety and Enforcement the Legislature with information on how effectively Special Fund . The measure then authorizes that such the program operates and why additional resources fee revenue be continuously appropriated for the are necessary . Accordingly, this lack of information implementation, operation, and enforcement of the regarding DOJ’s Proposition 63 workload could make ammunition sales regulations . Finally, Proposition 63 it difficult for the Legislature to ensure that (1) the Figure 17 Ammunition‑Sale Related Expenditures and Positions (Dollars in Thousands) 2017‑18 2018‑19 2016‑17 (Estimated) (Estimated) Three‑Year Total Division of Law Enforcement $30 $1,523 $4,398 $5,951 California Justice Information Services Division 1,189 11,164 6,697 19,049 Total Expenditures $1,219 $12,686 $11,095 $25,000 Positions 6 29 55 www.lao.ca.gov 59 analysis full gutter 2018-19 BUDGET proposition is being implemented as intended by the positions used to support Proposition 63 workload, voters, (2) resources are being used cost-effectively, ongoing versus one-time expenditures, the number of and (3) sufficient resources are available to meet ammunition transactions that occur on a quarterly or legislatively desired service levels . monthly basis, the number of customer service related Beginning in 2019-20, such oversight will be inquiries received, and the number of transactions that particularly important as (1) the General Fund loan will are approved or rejected . Enacting such requirements likely be exhausted and (2) DOJ will now be charging in 2018-19 would provide DOJ with sufficient time to ammunition purchasers the authorized transaction ensure that its systems are capable of collecting such fee . Such fees will need to generate sufficient revenue information by July 1, 2019 . This information would to fully support DOJ activities and begin to repay the help the Legislature conduct oversight to ensure that $25 million General Fund loan . However, it is currently collected fee revenues are used appropriately and that uncertain how much revenue will be generated and the fee levels are set to meet legislatively desired service whether DOJ costs will exceed collected revenues . levels . For example, the Legislature could determine that it may need to authorize a higher fee to cover DOJ LAO Recommendation administrative and enforcement costs . Additionally, we recommend that the Legislature direct DOJ to report on Require Annual Reporting on Proposition 63 any unexpected obstacles or challenges that emerge Workload. We recommend that the Legislature adopt as it implements these ammunition sale requirements budget trailer legislation requiring DOJ to report annually as well as recommendations to address them . Such by January 1 on its Proposition 63 workload from the information could help the Legislature decide whether prior-fiscal year . Such information should include both legislative action—such as clarifying statute—is needed . fiscal and outcome measures . For example, we suggest the Legislature direct DOJ report on the number of 60 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET SUMMARY OF RECOMMENDATIONS Issue Governor’s Proposal LAO Recommendation Cross Cutting Issue State Penalty Fund $79.5 million from the State Penalty Fund (SPF) Review proposed SPF expenditure plan to to support eight different programs. Shift ensure it reflects legislative priorities and support for the Bus Driver Training Program modify as necessary. Consider long-term from the SPF to the Motor Vehicle Account. solutions to address structural problems with state’s current criminal fine and fee system. California Department of Corrections and Rehabilitation (CDCR) Adult prison and parole population $38.3 million (primarily General Fund) for Withhold recommendation until May Revision. various adjustments associated with prison and parole caseload changes. Accommodating inmate population $68 million (General Fund) reduction from Consider directing CDCR to close the California reductions resulting from removing inmates from the two out-of-state Rehabilitation Center (CRC) in Norco and Proposition 57 prison facilities by fall 2019. one out-of-state contract facility to achieve an estimated additional $100 million in savings relative to the Governor’s proposal. Otherwise, direct CDCR to provide plan for making necessary infrastructure improvements at CRC. Parole staffing proposals $23 million (General Fund) for direct-supervision Direct CDCR to utilize a budgeting methodology positions due to the projected increase in the that is based on specific staffing ratios, and parolee population, and $2.3 million (General takes into account the size and composition of Fund) for support positions that are necessary the parolee population, to annually adjust the to account for increases in the number of total number and type of positons needed— direct-supervision parole staff. not just for direct-supervision positions. Require CDCR to provide an implementation timeline at budget hearings. Withhold recommendation on proposed staffing increases until May Revision pending receipt of report and updated parolee population projections. Wage increases for inmate workers $1.8 million (General Fund) to increase wages Withhold action and direct the administration assigned to facility maintenance for facility maintenance inmate workers to to report in budget hearings on specified allow CDCR to hire sufficient inmate workers information that is needed to assess the to reduce its facility maintenance backlog. potential effectiveness of the proposal and whether other actions are needed to fully address the maintenance backlog. Video surveillance at California State $1.5 million in 2018-19 ($177,000 ongoing) from Withhold action until the evaluation of the Prison, Sacramento (SAC) the General Fund to install an video surveillance system at High Desert audio/video surveillance system in certain State Prison is completed this spring. Direct housing units at SAC to address concerns CDCR to report at budget hearings on other about staff misconduct. strategies it is developing to address concerns at SAC. Ventura Training Center $8.8 million in 2018-19 ($6.3 million ongoing) Reject proposal because program is unlikely to for three departments—and capital outlay be the most cost-effective approach to reduce out-year costs of $18 million—from the recidivism or increase parolee employment, General Fund to convert the existing Ventura requested resources have not been fully conservation camp for inmates to a new justified, and other options exist for California firefighter training center for parolees. Conservation Corps training. (Continued) www.lao.ca.gov 61 analysis full gutter 2018-19 BUDGET Issue Governor’s Proposal LAO Recommendation Innovative programming grants $4 million (Inmate Welfare Fund) ongoing for the Allocate all proposed funds towards recidivism Innovative Programming Grant program. Of reduction and direct department to focus this amount, 65 percent would be targeted at scoring methodology for awarding funds on recidivism reduction. recidivism reduction. Inmate mental health programs $27.1 million in 2018-19 ($18.8 million ongoing) Provide limited-term funding instead of ongoing from the General Fund to (1) activate mental funding for proposed flex beds, as the need health flex beds, (2) fund working drawings for such beds appears temporary. Reject for Mental Health Crisis Bed (MHCB) working drawings funding as projects would construction projects, (3) allow CDCR to not be needed in the future. Reject proposed take over projections of the mental health resources for CDCR to take over mental population, and (4) increase staffing to help health projections. Approve proposal to help CDCR transfer patients to mental health beds department meet court-approved guidelines. consistent with court-approved guidelines. Dental equipment replacement and $3.5 million in 2018-19 ($2.5 million ongoing) Reduce requested amount by $150,000 annually repair from the General Fund to replace dental to account for anticipated dental equipment equipment in immediate need of replacement, repair savings. as well as about 140 additional pieces of dental equipment annually. Health care vehicles $17.5 million (General Fund) on a one-time basis Approve vehicle purchases and direct CDCR to to purchase 338 vehicles that are used for report at budget hearings on whether it could transporting inmates to health care and other repurpose some of the vehicles proposed for appointments. replacement rather than dispose of or auction them. Electronic Health Record System $8.3 million in 2018-19 ($7.1 million ongoing) Approve Governor’s proposal, but adopt budget (EHRS) from the General Fund to make various bill language requiring CDCR to use funding to changes to the EHRS including the purchase purchase additional user licenses for only this of additional user licenses. purpose. Medication room projects $3.3 million (General Fund) for preliminary Require CDCR to report at budget hearings on plans to add or modify medication rooms at its medication room needs. Direct CDCR to 14 prisons. submit a separate proposal for medication rooms proposed for general population units that were previously security housing units, as these particular medication rooms appear necessary. Governor’s juvenile justice reform $3.8 million from the General Fund and statutory Approve statutory changes on a limited-term proposal changes to increase the Division of Juvenile basis and require DJJ to conduct specified Justice (DJJ) age of jurisdiction, allow evaluations. Modify proposed change to DJJ more adult court youths to be placed in DJJ age of jurisdiction to avoid an unintended facilities, and start a young adult offender pilot consequence of having some youths spending program for certain adult court youths. up to two years longer in DJJ. Judicial Branch Augmentations to general purpose $123 million (General Fund) for trial court Consider the appropriate level of funding to funding for trial court operations operations—$75 million allocated based provide to trial courts relative to other General on the Judicial Council’s priorities and Fund priorities. Allocate any additional funds $47.8 million for certain trial courts that are provided based on legislative priorities—rather comparatively less well-funded than other than allowing the Judicial Council to do so. courts. Convene a working group to evaluate the Judicial Council’s current workload-based funding methodology. (Continued) 62 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2018-19 BUDGET Issue Governor’s Proposal LAO Recommendation Augmentation for self-help centers Increase of $19.1 million (General Fund) Direct the Judicial Council to conduct an to expand services at self-help centers. independent comprehensive cost-benefit Budget bill language specifying that a total analysis of self-help services by November of $30.3 million is dedicated for self-help 2020. Provide limited-term funding through services and requiring the reversion of 2020-21 based on legislative priorities for unexpended funds to the General Fund. overall General Fund spending, self-help services, and other court programs. Approve proposed budget bill language. Online traffic adjudication pilot $3.4 million ($1.4 million ongoing) from the Approve proposed funding, but provide the General Fund for the Judicial Council to requested $1.4 million on a four-year limited administer a pilot program to develop and term basis. Modify the proposed budget trailer test different activities related to the online legislation to require that each of the proposed adjudication of certain traffic infractions. online activities be offered at multiple courts Budget trailer legislation specifying and to require the Judicial Council submit an implementation requirements and authorizing evaluation report at the end of the pilot. certain actions. County Office of Education offset of trial Estimates that the amount of excess property Adjust trial court offset in 2018-19 upward to court General Fund support tax revenue available to offset General Fund account for property tax growth in 2017-18. support for trial courts will not increase above Preliminary estimates indicate a $6 million the 2017-18 level of $48 million. adjustment, but updated data will be available in the spring to further refine the estimate. Trial court construction proposals $1.3 billion in lease revenue bonds in 2018-19 Consider overhauling existing trial court and 2019-20—backed by the General Fund— construction system to address key underlying for the construction of ten projects which problems by eliminating the state’s two would have otherwise been financed by the construction accounts, shifting project Immediate and Critical Needs Account (ICNA). funding responsibility to the General Fund, $32.3 million from ICNA for three projects to and increasing legislative oversight of funded complete pre-construction design activities so projects. Alternatively, modify Governor’s they can move into construction in 2019-20. proposal to address some key problems if Legislature would like to maintain existing system. California Department of Justice (DOJ) Antitrust workload $1.8 million from the Attorney General Antitrust Reject multiyear plan. Approve only $1.8 million Account (which increases over the next two on an ongoing basis given the uncertainty fiscal years) to reduce the antitrust workload of about whether there is sufficient workload existing attorneys to more manageable levels to justify all requested resources and the as well as to expand DOJ capacity to take on ability of the requested positions to generate more cases. sufficient revenue to support themselves. Cardroom-related licensing $1.6 million (Gambling Control Fund) to provide Approve $1.6 million on a one-time basis in ongoing support for limited-term positions 2018-19 to allow DOJ to continue reducing set to expire in 2018-19, in order to continue the licensing backlog and collect workload reducing the cardroom-related licensing data. Determine appropriate level of ongoing backlog and to prevent it from growing. resources in 2019-20. Proposition 63 implementation No proposal as DOJ used its authority to spend Adopt budget trailer legislation requiring funds from the continuously appropriated DOJ to report annually by January 1 on its Ammunition Safety and Enforcement Proposition 63 workload from the prior fiscal Special Fund to implement the provisions of year to help Legislature conduct oversight that Proposition 63 (2016). fee revenues are used appropriately and that fee levels are sufficient. www.lao.ca.gov 63 analysis full gutter 2018-19 BUDGET Contact Information Drew Soderborg Managing Principal Analyst, 319-8343 Drew.Soderborg@lao.ca.gov Criminal Justice Anita Lee Judicial Branch, Department of Justice, 319-8321 Anita.Lee@lao.ca.gov State Penalty Fund Caitlin O’Neil Prisons, Firecamps 319-8351 Caitlin.O’Neil@lao.ca.gov Jonathan Peterson Parole, Rehabilitation, 319-8324 Jonathan.Peterson@lao.ca.gov Inmate Health Care LAO PUBLICATIONS This report was reviewed by Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 64 LEGISLATIVE ANALYST’S OFFICE