The 2019-20 Budget: Analysis of Governor's Criminal Justice Proposals

The 2019-20 Budget: Analysis of Governor’s Criminal Justice Proposals GABRIEL PETEK LEGISLATIVE ANALYST FEBRUARY 2019 analysis full gutter 2019-20 BUDGET LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Table of Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Criminal Justice Budget Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Cross-Cutting Issue: Deferred Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 California Department of Corrections and Rehabilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Trends in the Adult Inmate and Parolee Populations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Board of Parole Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Inmate Literacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Tattoo Removal Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 DJJ Partnership with California Volunteers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Vehicle Replacement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Judicial Branch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Pretrial Release Grant Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Improvement and Modernization Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 County Office of Education Offset of Trial Court General Fund Support . . . . . . . . . . . . . . . . . . . . 31 Department of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Bureau of Firearms Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 New Tiered Sex Offender Registration System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Dispositions and Criminal History Update Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 New and Expanded Crimes Workload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 California Consumer Privacy Act of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 California Internet Consumer Protection and Net Neutrality Act of 2018 . . . . . . . . . . . . . . . . . . . 40 Local Public Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Increased Resources for Peace Officer Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 California Violence Intervention and Prevention Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Summary of Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 www.lao.ca.gov analysis full gutter 2019-20 BUDGET LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Executive Summary 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 some of our major recommendations . We provide a complete listing of our recommendations at the end of the report . Budget Provides $18 Billion for Criminal Justice Programs The Governor’s 2019-20 budget includes a total of $18 .2 billion from all fund sources for the operation of judicial and criminal justice programs . This is a net increase of $271 million (1 .5 percent) over the revised 2018-19 level of spending . General Fund spending is proposed to be $14 .9 billion in 2019-20, which represents an increase of $183 million (1 percent) above the revised 2018-19 level . Budget Includes Numerous Proposals Lacking Key Details Pretrial Release Grant Program. The Governor’s budget proposes $75 million from the General Fund on a one-time basis for Judicial Council to administer a two-year grant program related to pretrial release . While the proposed program could be worthwhile, the Legislature currently lacks sufficient information to effectively evaluate the proposal and weigh the proposed funding relative to its other General Fund priorities . We recommend that the Legislature direct the administration to provide a well-developed proposal that specifies (1) the primary goals of the program, (2) the specific programs or activities that would be funded, (3) how funding would be allocated, and (4) how funded programs or activities would be evaluated to inform statewide decision-making . Deferred Maintenance. The budget proposes $65 million from the General Fund to implement deferred maintenance projects at the judicial branch and the California Department of Corrections and Rehabilitation (CDCR) . Unlike the judicial branch, at the time of this analysis CDCR had not provided our office with a list of the specific projects it would prioritize with the proposed funding . Prior to approving the proposed funding for CDCR, we recommend the Legislature require the department to report on what projects it intends to implement to ensure that it will focus on high-priority maintenance activities . We also recommend adoption of reporting requirements to increase oversight of (1) how CDCR and the judicial branch maintain their facilities on an ongoing basis and (2) what deferred maintenance projects are actually implemented with the proposed funding . Structured Decision-Making Framework for Parole Hearings. The administration proposes $4 .9 million from the General Fund and the implementation of a structured decision-making framework for the Board of Parole Hearings (BPH) to accommodate an increase in parole hearings . While we find the proposed use of a decision-making framework to be promising, BPH has not provided a prototype of the framework or important details on its process for developing, implementing, and evaluating the framework . We recommend that the Legislature require BPH to provide such information, so that it can effectively evaluate this potentially significant policy change . Compensation for Attorneys Appointed by BPH. The Governor’s budget includes $2 .5 million from the General Fund to increase pay for attorneys who represent inmates in parole hearings . While a new attorney pay structure appears needed, the Legislature currently lacks www.lao.ca.gov 1 analysis full gutter 2019-20 BUDGET sufficient information to effectively evaluate the proposal . As such, we recommend that the Legislature require BPH to provide key information this spring about its proposed changes to the attorney pay schedule, including the basis for the proposed pay increase and the new structure of the proposed pay schedule . New Tattoo Removal Program. The Governor’s budget proposes $2 .5 million from the General Fund for CDCR to establish a tattoo removal program that would be available at all state prisons . We find that the proposed program could result in certain benefits, such as better employment prospects for inmates that receive the service . However, the Governor’s proposal lacks key pieces of information that makes it very difficult for the Legislature to assess whether the proposed program would be effective and whether the requested funding is appropriate . Accordingly, we recommend that the Legislature direct the department to provide additional information on the proposed program, including how many inmates would be served by the program and how it would be structured and evaluated . Budget Includes Several Proposals Related to Special Fund Shortfalls Increased Resources for Peace Officer Training. The Governor’s budget proposes a $34 .9 million ongoing General Fund augmentation for the Commission on Peace Officer Standards and Training (POST) to restore and expand programs and services that were cut due to past shortfalls in the criminal fine and fee revenue supporting the program . We recommend the Legislature ensure that any funding provided and the planned expenditure of such funding reflect its priorities . To the extent that the Legislature approves additional funding for POST, we also recommend adopting trailer bill language directing POST to report annually on specific outcome and performance measures that are tied to legislative expectations for the additional funding . Bureau of Firearms (BOF) Workload. The Governor’s budget proposes a series of adjustments related to BOF that are intended to prevent the Dealer’s Record of Sale (DROS) Special Account—which is supported by fee revenues—from becoming insolvent and to accommodate additional BOF workload . While the overall proposal is a step in the right direction, it does not fully address the identified problems, and results in some unintended consequences . As such, we recommend an alternative package of adjustments that allocates the funding in a different manner, but addresses the concerns with the Governor’s proposal . We also recommend that the Legislature require a report from the Department of Justice and the administration on addressing the ongoing operational shortfalls facing the DROS Special Account and another special fund that supports BOF—the Firearms Safety and Enforcement Special Fund . Improvement and Modernization Fund (IMF). The budget proposes General Fund resources for the trial court Phoenix financial procurement, and payroll system and the judicial branch’s Litigation Management Program, in order to offset existing IMF support for these programs and support increased costs . While the Governor’s proposal would help prevent the IMF from becoming insolvent in 2019-20, it is projected to face operational shortfalls and potential insolvency in the future—largely due to a steady decline in criminal fine and fee revenue deposited into the fund . In order to address these concerns, we recommend the Legislature (1) deposit IMF revenues into the General Fund and eliminate the IMF and (2) direct the judicial branch to report on each program currently receiving IMF funding (such as past expenditures and benefits achieved) to help determine what level of funding is appropriate to provide these programs . Given that it will take time to complete this report and for the Legislature to consider the information as part of its budget priorities, we recommend providing one-time General Fund support for these programs . 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET CRIMINAL JUSTICE BUDGET OVERVIEW The primary goal of California’s criminal justice primarily due to two factors . First, in 2011 the state system is to provide public safety by deterring realigned various criminal justice responsibilities to and preventing crime, punishing individuals the counties, including the responsibility for certain who commit crime, and reintegrating offenders low-level felony offenders . This realignment reduced back into the community . The state’s major state correctional spending . Second, the judicial criminal justice programs include the court branch—particularly the trial courts—received system, the California Department of Corrections significant one-time and ongoing General Fund and Rehabilitation (CDCR), and the California reductions . Department of Justice (DOJ) . The Governor’s . . . But Has Increased Since Then. However, budget for 2019-20 proposes total expenditures overall spending for the operational support of of $18 .2 billion for the operations of judicial and criminal justice programs has increased steadily criminal justice programs . Below, we describe since 2012-13 . This was largely due to additional recent trends in state spending on criminal justice funding for CDCR and the trial courts . For example, and provide an overview of the major changes in increased CDCR expenditures resulted from the Governor’s proposed budget for criminal justice (1) increases in employee compensation costs, programs in 2019-20 . (2) the activation of a new health care facility, and (3) costs associated with the department taking State Operational Expenditure Trends responsibility for inpatient psychiatric programs Total Spending Declined Between 2010-11 from the Department of State Hospitals . During and 2012-13 . . . As shown in Figure 1, total state this same time period, various augmentations were expenditures on the operation of criminal justice provided to the trial courts to offset reductions programs declined between 2010-11 and 2012-13, made in prior years and to fund specific activities . Figure 1 Judicial and Criminal Justice Expenditures (In Billions) $20 Special and Other Funds 18 General Fund 16 14 12 10 8 6 4 2 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 www.lao.ca.gov 3 analysis full gutter 2019-20 BUDGET Governor’s Budget Proposals Major Spending Proposals. The most significant piece of new spending included in the Total Proposed Spending of $18.2 Billion in Governor’s budget relates to various proposals 2019-20. As shown in Figure 2, the Governor’s to increase General Fund support for the judicial 2019-20 budget includes a total of $18 .2 billion branch by a total of $217 million, including from all fund sources for the operation of judicial $75 million for grants related to pretrial release and criminal justice programs (excluding planned decision-making, $60 million for the maintenance capital outlay expenditures) . This is a net increase of trial court facilities, and $44 million for the of $271 million (1 .5 percent) over the revised replacement of case management systems and 2018-19 level of spending . General Fund spending various other information technology (IT) projects . is proposed to be $14 .9 billion in 2019-20, which We note that the proposed spending increases are represents an increase of $183 million (1 percent) partially offset by decreases in funding, primarily above the revised 2018-19 level . We note that due to the expiration of one-time grant funding this increase does not include increases in provided to the Board of State and Community 2019-20 employee compensation costs for these Corrections (BSCC) in 2018-19 . departments, which are budgeted elsewhere . If these costs were included, the increase would be somewhat higher . Figure 2 Judicial and Criminal Justice Budget Summary (Dollars in Millions) Change From 2018-19 Actual Estimated Proposed 2017-18 2018-19 2019-20 Actual Percent Department of Corrections and Rehabilitation $11,813 $12,555 $12,582 $28 0.2% General Funda 11,487 12,239 12,279 40 0.3 Special and other funds 326 315 303 -12 -3.9 Judicial Branchb $3,669 $3,862 $4,172 $310 8.0% General Fund 1,735 1,911 2,129 217 11.4 Special and other funds 1,934 1,951 2,043 92 4.7 Department of Justice $841 $996 $1,034 $39 3.9% General Fund 235 294 331 37 12.6 Special and other funds 606 702 703 2 0.2 Board of State and Community Corrections $93 $271 $164 -$107 -39.5% General Fund 64 182 66 -115 -63.5 Special and other funds 29 90 98 8 9.3 Other Departmentsc $235 $269 $272 $2 0.9% General Fund 68 99 103 4 4.3 Special and other funds 167 170 168 -2 -1.1 Totals, All Departments $16,650 $17,953 $18,224 $271 1.5% General Fund 13,588 14,725 14,908 183 1.2 Special and other funds 3,062 3,228 3,316 88 2.7 a Does not include revenues to General Fund to offset corrections spending from the federal State Criminal Alien Assistance Program. b Includes funds received from local property tax revenue. c 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. 4 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET CROSS-CUTTING ISSUE: DEFERRED MAINTENANCE The administration proposes $65 million replacement projects at CDCR .) The budget also from the General Fund to implement deferred includes provisional language allowing up to three maintenance projects at the judicial branch and years—until June 30, 2022—for departments to CDCR. Prior to approving the proposed funding expend or encumber these funds . for CDCR, we recommend the Legislature Funding Represents Relatively Small Share require the department to report on what of Identified Deferred Maintenance Projects. projects it intends to implement to ensure The judicial branch and CDCR report $2 .4 billion that it will focus on high-priority maintenance and $1 billion, respectively, in total deferred activities. We further recommend adoption of maintenance needs . Identified projects include reporting requirements that will better enable replacements of major building systems (such as legislative oversight of (1) how CDCR and heating, ventilation, and air condition systems), the judicial branch maintain their facilities replacements of locking mechanisms on cell doors, on an ongoing basis and (2) what deferred and elevator repairs . The Governor’s proposed maintenance projects are actually implemented funding for deferred maintenance in 2019-20 with the proposed funding. would allow the judicial branch to address roughly 1 percent of its deferred maintenance backlog and Background CDCR to address roughly 3 percent of its backlog . Recent Budgets Have Provided Funding for LAO Assessment Deferred Maintenance Projects. Facilities require routine maintenance, repairs, and replacement of Properly Maintaining State Facilities Is parts to keep them in acceptable condition and Important Practice. The proposed deferred to preserve and extend their useful lives . When maintenance funding reflects the continuation of such maintenance is delayed or does not occur, an important commitment by the state to tackle we refer to this as deferred maintenance . Since its deferred maintenance backlog . The state 2015-16, annual state budgets have included a has invested many billions of dollars to build its combined total of $1 .3 billion—mostly from the infrastructure assets, which play critical roles in the General Fund—to address backlogs of deferred state’s economy and the provision of services to maintenance at state facilities—such as prisons, Californians . Moreover, when repairs to key building parks, and universities—as well as a few local and infrastructure components are put off, facilities facilities, such as community colleges . Of this total, can eventually require more expensive investments, $95 million has been allocated to the judicial branch such as emergency repairs (when systems break and $79 million to CDCR . (In addition, CDCR down), capital improvements (such as major received $35 million in 2017-18 and $72 million in rehabilitation), or replacement . Thus, while deferring 2018-19 to replace roofs and fix water damage at regular maintenance lowers costs in the short several facilities .) run, it often results in substantial costs in the long run . For example, failure to implement a relatively Governor’s Proposal inexpensive maintenance project to patch a leaking Budget Provides $65 Million for Deferred roof can result in structural damage, mold, and Maintenance for Judicial Branch and CDCR. The roof replacement projects costing hundreds of Governor’s budget proposes $65 million from the thousands of dollars or more . General Fund in 2019-20 for deferred maintenance Judicial Branch Has Identified How It would projects at the judicial branch ($40 million) and Prioritize Funding, but Not CDCR. The judicial CDCR ($25 million) . (Additionally, the budget branch has provided information specifying which includes $7 million in 2019-20 and $124 million projects it would prioritize for the limited funding in 2020-21 for some specific roof and fire alarm provided . Specifically, the judicial branch intends to www.lao.ca.gov 5 analysis full gutter 2019-20 BUDGET prioritize projects based on cost and risk to building provide a list of proposed projects or is unable to occupants, such as repairs to building systems that justify its proposed projects to the Legislature’s represent the greatest risk to building occupants . In satisfaction, we recommend that the Legislature line with this approach, the judicial branch plans on reject the administration’s proposed $25 million using the proposed funding to address the highest augmentation for CDCR . We note that it should priority fire alarm systems . The specific projects generally not be difficult for CDCR to provide a identified in their request were selected based on list of proposed projects since the Department of the level of risk for occupants, input from building Finance (DOF) issued a budget letter in July 2018 operations staff, and/or issues identified by the directing departments to provide prioritized lists Office of the State Fire Marshal . of projects by September 2018 in preparation for At the time of this analysis, however, CDCR had the 2019-20 budget process . (DOF also provided not provided our office with a list of the specific departments with similar direction in previous years .) deferred maintenance projects it plans to fund Monitor Accumulation of Deferred with the proposed $25 million . The absence of a Maintenance. We recommend that the Legislature prioritized list of projects makes it impossible for adopt Supplemental Report Language (SRL) the Legislature to determine whether the proposed requiring that, no later than January 1, 2023, CDCR funding would go to the projects that it thinks most and the judicial branch identify how their deferred important . For example, the Legislature may wish maintenance backlog has changed since 2019 . to prioritize funding certain types of projects— We further recommend that the SRL require that, such as those that address fire, life, and safety to the extent a department’s backlog has grown in issues or reduce future state costs—over other the intervening years, the department shall identify types of projects—such as those that would (1) the reasons for the increase and (2) specific address aesthetic concerns or occur at facilities the steps it plans to take to improve its maintenance Legislature may no longer consider necessary . practices on an ongoing basis . This is because, if a department experienced a large increase in its LAO Recommendations backlog, it might suggest that its actual routine Ensure CDCR Prioritizes Most Important maintenance activities are insufficient to keep up Projects. We recommend that the Legislature with its annual needs and that it should improve use its budget hearings this spring to gather more its maintenance program to prevent the further information from CDCR . First, we recommend that accumulation of deferred maintenance . In such the Legislature require CDCR to report at budget cases, it will be important for the Legislature to hearings on the approach it is taking to prioritize understand this so it can direct departments to take projects . This would enable the Legislature to actions to improve their maintenance programs . ensure that it is comfortable that the department’s Adoption of the following language would be approach would result in the selection of projects consistent with this recommendation: that are consistent with legislative priorities . Item xxxx-xxx-xxxx . No later than January 1, 2023, [insert department name] shall submit to Second, we recommend that the Legislature the fiscal committees of the Legislature and the require CDCR to provide a specific list of projects Legislative Analyst’s Office a report identifying that it plans to undertake with the requested the total size of its deferred maintenance $25 million in 2019-20 . This list is important for backlog as of the 2018-19 fiscal year and the Legislature to have in order to assess whether September 2022 . To the extent that the total the specific proposed projects are consistent size of the deferred maintenance backlog has with its priorities—such as projects that prevent increased over that period, the department’s future costs or address fire, life, or safety risks . report shall also identify the reasons for the If the list includes projects that it deems to be of increase in the size of the backlog and the lower priority, we recommend that the Legislature specific steps the department plans to take direct CDCR to reprioritize projects or adjust to improve its maintenance practices on an the funding level accordingly . If CDCR fails to ongoing basis . 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Require Future Reporting of Projects departments undertook with 2019-20 funds . Completed. In our budget report, The 2019-20 This would provide greater transparency and Budget: Deferred Maintenance, we recommend accountability of the funds by ensuring that the that the Legislature adopt additional SRL requiring Legislature has information on what projects were DOF to report, no later than January 1, 2023, ultimately implemented and that the funds were on which deferred maintenance projects all spent consistent with any legislative directive given . CALIFORNIA DEPARTMENT OF CORRECTIONS AND REHABILITATION OVERVIEW the Governor’s budget for the past and current years and proposed for the budget year . As the CDCR is responsible for the incarceration of figure indicates, the proposed spending level is adult felons, including the provision of training, an increase of $28 million, or less than 1 percent, education, and health care services . As of from the estimated 2018-19 spending level . This January 16, 2019, CDCR housed about 127,000 increase reflects additional funding to (1) address adult inmates in the state’s prison system . Most of deferred maintenance backlogs, (2) replace these inmates are housed in the state’s 35 prisons vehicles, and (3) support the ongoing preventative and 42 conservation camps . About 5,700 inmates maintenance of CDCR facilities . This additional are housed in either in-state or out-of-state proposed spending is partially offset by various contracted prisons . The department also supervises spending reductions, including reduced spending and treats about 48,800 adult parolees and is for contract beds . (The proposed $28 million responsible for the apprehension of those parolees increase does not include anticipated increases in who commit parole violations . In addition, 675 employee compensation costs in 2019-20 because juvenile offenders are housed in facilities operated they are accounted for elsewhere in the budget . by CDCR’s Division of Juvenile Justice (DJJ), which These increases are currently budgeted to exceed a includes three facilities and one conservation camp . couple hundred million dollars .) Operational Spending Proposed for 2019-20. Capital Outlay Spending Proposed for The Governor’s budget proposes total expenditures 2019-20. The Governor’s budget proposes total of $12 .6 billion ($12 .3 billion General Fund) for expenditures of $148 million ($93 million General CDCR operations in 2019-20 . Figure 3 shows Fund) for CDCR capital outlay projects in 2019-20 . the total operating expenditures estimated in This amount includes (1) $77 million in additional Figure 3 Total Expenditures for the California Department of Corrections and Rehabilitation (Dollars in Millions) Change From 2018-19 2017-18 2018-19 2019-20 Actual Estimated Proposed Amount Percent Adult Institutions $10,434 $11,029 $11,022 -$7 — Adult Parole 637 706 729 23 3% Administration 500 560 553 -8 -1 Juvenile Institutions 193 208 217 9 4 Board of Parole Hearings 48 51 61 10 19 Totals $11,813 $12,555 $12,582 $28 0.2% www.lao.ca.gov 7 analysis full gutter 2019-20 BUDGET General Fund support to continue previously Background approved projects and to begin one new project at As shown in Figure 4, the average daily inmate existing CDCR facilities, (2) $55 million in General population is projected to be 127,000 inmates Fund lease revenue bonds for various counties in 2019-20, a decrease of about 1,400 inmates to construct or renovate juvenile correctional (1 percent) from the estimated current-year level . facilities through a program first authorized by Also shown in Figure 4, the average daily parolee Chapter 175 of 2007 (SB 81, Committee on Budget population is projected to be 50,000 in 2019-20, and Fiscal Review), and (3) $16 million previously an increase of about 1,200 parolees (3 percent) appropriated from the General Fund to support from the estimated current-year level . The projected previously approved projects . decrease in the inmate population and increase in the parolee population is primarily due to the TRENDS IN THE ADULT INMATE estimated impact of Proposition 57 (2016), which AND PAROLEE POPULATIONS made certain nonviolent offenders eligible for parole consideration and expanded CDCR’s authority to We recommend that the Legislature require reduce inmates’ prison terms through credits . the administration to account for recent policy changes in its spring inmate and parolee Governor’s Proposal population projections and budget requests As part of the Governor’s January budget at the May Revision. Until such information proposal each year, the administration requests is provided, we withhold recommendation on modifications to CDCR’s budget based on the administration’s adult population funding projected changes in the inmate and parolee request. In addition, we recommend requiring populations in the current and budget years . CDCR to report to the Legislature when it makes The administration then adjusts these requests future changes to credit policies. each spring as part of the May Revision based Figure 4 Adult Inmate Population Projected to Decline Slightly, Parolee Population Projected to Increase Somewhat 180,000 Inmate Population 160,000 Parolee Population 140,000 120,000 100,000 80,000 60,000 40,000 20,000 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 (Estimated) (Projected) 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET on updated projections of these populations . example, the 2018-19 Budget Act provided The adjustments are made both on the overall resources for CDCR to refer inmates to courts for population of offenders and various subpopulations possible sentence reduction due to sentencing (such as inmates housed in contract facilities and errors or because of their exceptional behavior sex offenders on parole) . while incarcerated . In addition, we recently The administration proposes a net increase of discovered that CDCR is in the process of using $17 .3 million in the current year and a net increase its authority under Proposition 57 to further of $16 .4 million in the budget year for adult increase credits inmates earn for participating in population-related proposals . The current-year net rehabilitative and educational activities starting in increase in costs is primarily due to a smaller than May 2019 . (As we discuss below, the department is anticipated reduction in the use of contract beds, not currently required to notify the Legislature when as well as increases in the number of offenders it makes changes to its credit earning policies .) housed in state-operated prisons and on parole For example, CDCR plans to increase the number relative to what was assumed in the 2018-19 of days inmates earn off of their prison sentences Budget Act . This increase in cost is partially offset for earning a high school diploma from 90 days by projected savings, primarily due to a reduction in to 180 days . As a result of these policy changes, custody staffing associated with the conversions of the inmate population is expected to decline and various housing units to lower security status . The the parolee population is expected to temporarily budget-year net increase in costs is primarily due increase . Both of these estimated impacts are not to a projected increase in the parolee population as reflected in CDCR’s current population projections . a result of Proposition 57 . These increased costs Given that the current population projections form are partially offset by savings—such as from a the basis of the administration’s population-related decrease in the use of contract beds . budget requests, it is possible that the requested level of resources may be more than the LAO Assessment department will need . Annual Population-Related Requests Typically Lack of Legislative Notification of Credit Do Not Account for Recent Policy Changes. In Changes Makes It Difficult to Account for the fall and spring of every year, CDCR releases Potential Population Impacts. Given the authority projections of the inmate and parolee populations provided to CDCR under Proposition 57 to reduce that are used to make necessary funding inmates’ terms by awarding them credits for good adjustments for both the current and budget years . behavior or participation in rehabilitative programs, The projections are based on historical trend data CDCR will likely continue to make changes to and typically do not include the effects of very credit policies that could significantly impact the recent policy changes or those planned for the inmate and parolee populations and the level of near future . This is because CDCR often does not resources necessary to support them . We also note have time to adjust projections for these changes that changes to credits can have implications for or assumes that their effects would be minor . sentencing, offender rehabilitation, public safety In certain circumstances, however, CDCR has and other areas of interest to the Legislature . occasionally adjusted its population projections to However, CDCR makes credit changes through the account for planned policy changes, such when regulatory process, which means it is difficult for Proposition 57 was implemented in 2017 . the Legislature to become aware of the changes in a timely manner . For example, as mentioned Several Policy Changes Currently Being above, the Legislature was not directly notified of Implemented Are Expected to Impact the department’s recent credit changes, despite Correctional Population. In 2019-20, several the fact that these changes could affect the recent policy changes are anticipated to accelerate department’s resource needs . the release of certain inmates from prison . For www.lao.ca.gov 9 analysis full gutter 2019-20 BUDGET LAO Recommendations who are denied parole must wait until their next parole hearing, which can range from 3 to 15 Require Population Projections and Budget years . In addition, BPH advises the Governor on Requests Account for Recent Policy Changes. applications for clemency and approves transfers of We recommend that the Legislature require the foreign-born inmates to their native countries . administration to account for the estimated impact The Governor’s budget proposes $61 million of the recent changes to credit policies and CDCR’s (primarily from the General Fund) for BPH efforts to propose inmates for resentencing in its operations in 2019-20 . This is an increase spring population projections and budget requests of $10 million, or about 19 percent, from the at the May Revision . Accounting for these recent estimated 2018-19 spending level . This increase policy changes would help the Legislature avoid is primarily due to an increase in the number of approving resources for CDCR that it may ultimately hearings that BPH is expecting to hold in 2019-20 . not need . We withhold recommendation on the administration’s adult population funding request Structured Decision-Making until the above information is provided . Framework for Parole Hearings Require Reporting When CDCR Makes Future Changes to Credits. We also recommend that We recommend that the Legislature the Legislature pass statute directing CDCR to require the BPH to provide key information report to the relevant fiscal and policy committees about its proposal to implement a structured of both houses of the Legislature when it makes decision-making framework that guides changes to credit policies in the future . This report parole decision makers through the process should include an explanation of the rationale for of weighing information about an inmate. the changes and estimates of the impact of the Specifically, we recommend that BPH provide change on the inmate and parolee populations . This information on the development, usage, and requirement would help ensure that the Legislature implementation of the framework by April 1, is aware of changes to credit policies when it 2019. The board should also provide a prototype considers CDCR resource needs and broader of the proposed framework for the Legislature criminal justice policy matters in the future . to review. Pending receipt of the above information, we recommend that the Legislature withhold action on the Governor’s proposal. BOARD OF PAROLE HEARINGS Background. The purpose of a parole hearing is to determine whether an inmate is suitable Overview for release or if he or she currently poses an The Board of Parole Hearings (BPH) within unreasonable risk of danger to society . The CDCR is currently composed of 15 commissioners . hearing panel, which typically consists of one BPH Along with deputy commissioners, they consider commissioner and one deputy commissioner, whether to grant parole to all persons sentenced considers many sources of information, including to state prison under the state’s indeterminate a risk assessment from a psychologist, statements sentencing laws, as well as certain determinately from the inmate and victims, and records of the sentenced inmates who qualify for parole suitability inmates’ behavior while incarcerated . Research hearings . (Under indeterminate sentencing, indicates that some of the sources of information offenders receive a sentence range, such as considered are better predictors of dangerousness 25-years-to-life . Under determinate sentencing, than others . For example, risk assessments offenders receive fixed prison terms with specified completed by psychologists are among the release dates .) They also determine (1) whether to best predictors of dangerousness . While BPH impose any special conditions on offenders who regulations outline criteria that tend to indicate are granted parole—such as requiring participation suitability for release (such as positive behavior in certain rehabilitative programs—once they are while incarcerated) and unsuitability (such as in the community and (2) how long offenders an unstable social history), there is currently no 10 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET prescribed framework that the panel is required to will implement the framework on July 1, follow in making its decisions in granting parole . 2019 . The board indicates that it will receive However, BPH attempts to ensure accuracy and technical assistance from the National consistency in decision-making by providing panel Institute of Corrections (NIC) in implementing members with ongoing training and periodic legal the framework . We note that the Governor’s feedback regarding their parole hearing decisions . budget does not include additional resources Since 2011, BPH has scheduled between 4,000 for BPH to develop and implement the and 5,300 parole hearings annually . Beginning framework . in 2019-20, however, the board estimates that • Increase Resources to Allow BPH to the number of hearings will increase significantly . Conduct Additional Hearings. BPH expects This is primarily due to (1) recent legislation— that implementation of the framework will Chapter 475 of 2015 (SB 261, Hancock) and allow it to process more hearings with Chapter 675 of 2017 (AB 1308, Stone)—granting existing resources . However, given the large parole hearings to offenders who committed crimes increase in hearings anticipated in 2019-20, in their youth and (2) the requirement that BPH BPH indicates that it will still need additional consider granting parole under Proposition 57 to resources to process this workload . As indeterminately sentenced inmates convicted of such, the Governor’s budget proposes nonviolent crimes . Specifically, the board estimates an increase of $4 .9 million (General Fund) that there will be a total of 7,200 parole hearings and 13 .5 positions in 2019-20 . Under the in 2019-20 and 8,300 hearings in 2020-21 . BPH proposal, the level of funding would increase expects its workload to continue to remain high in to $6 .3 million in 2020-21 and decline subsequent years . to $2 .1 million in 2021-22 and annually Governor’s Proposal. In order to accommodate thereafter . According to BPH, these additional the anticipated increase in parole hearings, the resources would allow it to add two parole Governor proposes to: commissioners, pay for additional support staff, and make IT upgrades . • Reduce Staff Time on Hearings by Implementing Structured Decision-Making Proposal Has Merit, but Insufficient Framework. A structured decision-making Information Provided. Based on existing framework is a tool that consistently and research, we find the proposed use of a structured systematically guides parole decision decision-making framework to be promising . makers through the process of weighing This is because it could improve public safety information about an inmate that research if it increases the ability for hearing panels to demonstrates either aggravates or mitigates focus on factors shown to be associated with the inmate’s risk of future violence . For risk . Furthermore, the proposed framework could example, the parole board in Pennsylvania improve efficiency, transparency, and consistency uses a framework that combines the results of the board’s parole decision-making process . of several actuarial risk assessments However, BPH has not provided a prototype of and inmates’ institutional behavior and the framework or provided important details on programming history into a numerical score, its process for developing, implementing, and yielding a parole recommendation that evaluating the framework . The absence of such commissioners can supplement with their information makes it difficult for the Legislature to qualitative observations . BPH indicates that a effectively evaluate this potentially significant policy structured decision-making framework would change . reduce the amount of time commissioners Specifically, the proposal lacks basic information and deputy commissioners spend preparing on the following key questions: for and participating in hearings . The • What Is the Process for Developing the Governor’s budget assumes that the board Framework? It is unclear how BPH will www.lao.ca.gov 11 analysis full gutter 2019-20 BUDGET develop the decision-making framework . framework and detailed information about how it For example, it is unclear what sources of plans to evaluate the framework . information BPH is using to develop it and LAO Recommendation. In view of the above, when it is expected to be finished . we recommend that the Legislature require BPH • How Will the Framework Be Used? At this to provide key information about the proposed time, it is unclear whether the framework structured decision-making framework (such would solely guide commissioners in as in regards to its development, usage, and considering whether to release an inmate implementation) by April 1, 2019 . The board or whether it will would also assist in their should also provide a prototype of the proposed decisions about (1) what conditions to impose framework for the Legislature to review . Pending on offenders who are released or (2) how long receipt of the above information, we recommend inmates who are not released must wait for that the Legislature withhold action on the their next hearing . Governor’s proposal . • How Will the Framework Be Implemented? Compensation for Attorneys While BPH indicates that NIC will provide Appointed by BPH technical assistance in the implementation of the framework (including site visits from We recommend that the Legislature require experts), the board has not provided a the administration to provide key information detailed implementation plan . For example, about the proposed changes to the attorney it is unclear what training will be provided to pay schedule by April 1, 2019. Pending receipt commissioners and deputy commissioners in of this information, we recommend that the how to use the framework or what processes Legislature withhold action on the Governor’s BPH will use to ensure it is ultimately applied proposal. If the administration is unable to consistently as intended . provide this information, we recommend • How Will the Framework Be Evaluated? rejecting the proposal and directing the It is unclear on the extent to which the administration to provide a revised proposal framework would be evaluated to ensure it with adequate information as part of the is consistent with best-practices, as well as 2020-21 budget process. its impact on rates of inmate release and Background. Many inmates cannot afford to hire re-offense . In addition, it is uncertain whether an attorney to represent them in parole hearings . BPH will periodically evaluate the framework In these cases, BPH appoints and pays for their in the future to ensure it remains consistent attorneys . BPH currently contracts with about 36 with evolving research and best practice on attorneys to represent inmates in parole hearings criminal risk factors . throughout the state, with each attorney handling roughly 150 cases per year on average . As shown Assuming BPH is able to successfully implement in Figure 5, BPH currently pays attorneys a flat the framework in July 2019, the resources rate for completing a specific task in the parole requested to process the increase in hearings hearing process . Depending on the nature of the appears reasonable . However, if BPH is not able to case, an attorney may not ultimately complete all do so or the framework does not reduce workload tasks . For example, inmates have the option to at the level assumed under the Governor’s waive their right to a parole hearing for one to five proposal, the Legislature may need to provide years or to stipulate that they are unsuitable for additional resources to allow BPH to process its full parole for a minimum of three years . (Inmates do workload in 2019-20 . Accordingly, it is important this for a variety of reasons, including potentially that the Legislature receive a detailed plan for the being released from prison earlier than if they went development and implementation of the framework . to a hearing but were denied parole and required In addition, in order to facilitate effective legislative to wait 15 years until their next hearing .) In this oversight, BPH should provide a prototype of the example, there would be no hearing and, thus, the 12 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET attorney would not receive the Figure 5 $175 payment . BPH estimates Board of Parole Hearings Attorney Pay Structure that on average, attorneys receive $400 per case . As of February 1, 2019 In recent years, BPH indicates Task Payment that it has had trouble attracting Appointment to a case $25 and retaining competent attorneys Review case information, document inmate disability needs, 50 and has had to reprimand or conduct legal research even discontinue appointing Review inmate’s file 75 some attorneys for providing Interview inmate 75 inadequate representation to their Appear at parole hearing 175 clients . According to the board, Appear at full board meetinga 100 Prepare written submission for full board meeting 50 this is because attorney pay has a Cases only go to full board meetings in rare circumstances, such as if there is disagreement not kept up with the increasing among the hearing panel about whether or not to grant parole. amount of work that attorneys must do on each case—largely waivers, it could generate unnecessary hearings— due to more requirements related to documenting an unnecessary use of state resources—and/or inmates’ disability accommodation needs . The result in inmates having to wait longer until their board also indicates that the current pay structure next parole hearing than they would have if they may discourage stipulations and waivers of parole had waived their right to a hearing or stipulated that hearings . This is because attorneys receive a they were unsuitable for parole . relatively significant increase in compensation if a We note, however, that the Legislature currently case proceeds to the hearing stage . lacks sufficient information to effectively evaluate Governor’s Proposal. In view of the concerns the Governor’s proposal . This is because the expressed about the current attorney pay proposal lacks basic information on the following schedule and its impact on the ability of the board key questions: to attract and retain competent attorneys, the Governor proposes to budget BPH at $750 per • What Is the Basis for the Proposed $750 hearing, rather than $400 per hearing as is the Payment? At the time of this analysis, BPH current practice . Accordingly, the Governor’s was unable to provide a workload study—or budget proposes a $2 .5 million General Fund other form of adequate explanation—to justify augmentation for BPH in 2019-20 . In addition, BPH the proposed $750 per case for attorney proposes to restructure the attorney pay schedule, pay . Without this information, the Legislature modify its attorney recruitment process, provide cannot assess whether the proposed additional attorney training, and increase attorney $750 per hearing is the appropriate amount to expectations . attract and retain high quality attorneys . New Pay Structure Appears Needed, but • What Is the Structure of the New Pay Proposal Lacks Key Details. We find that Schedule? BPH has not provided the problems cited by BPH regarding the current proposed pay structure . Accordingly, it is attorney pay schedule could potentially result in unclear whether the new schedule would serious consequences—particularly if inmates lack appropriately incentivize attorneys to provide appropriate representation in parole hearings . First, adequate representation to inmates . to the extent that poor representation results in • What Changes to Attorney Recruitment, fewer inmates being granted parole or in inmates Training and Expectations Are Proposed? being given longer denial periods, inmates could BPH has not provided specific details about spend more time in prison—at higher state cost— the planned changes to attorney recruitment, than otherwise . Second, to the extent that the training and expectations . Furthermore, it is current pay structure discourages stipulations and unclear how BPH would identify and respond www.lao.ca.gov 13 analysis full gutter 2019-20 BUDGET to attorneys who do not meet the new improve their literacy in order to be able to expectations . As such, it is unclear whether effectively participate in other rehabilitation implementation of these changes will be programs while in prison, such as vocational or effective, as well as whether the board will cognitive behavioral therapy programs . require additional resources to implement The 2018-19 Budget Act provided about them . $154 million (mostly from the General Fund) to CDCR for various inmate academic education LAO Recommendation. In view of the above programs . Some of these programs include literacy concerns, we recommend that the Legislature education that is provided in different settings . require the administration to provide the key For example, classroom-based literacy education information about the proposed changes to the consists of classes of up to 27 inmates who meet attorney pay schedule by April 1, 2019 . Pending for roughly 16 hours a week . Under this program, receipt of this information, we recommend that an instructor can work with up to 54 inmates . The the Legislature withhold action on the Governor’s department also operates the Voluntary Education proposal . If the administration is unable to provide Program, which is designed to supplement this information, we recommend rejecting the classroom based education or to provide access proposal and directing the administration to provide to education when a classroom based option is a revised proposal with adequate information as not available . An instructor in this program can part of the 2020-21 budget process . work with up to 120 inmate students—offering in-person support at least twice a week but with no INMATE LITERACY hourly attendance requirements . In addition, CDCR provides technology based education such as While the Governor’s proposal to establish computer software designed to help develop basic a literacy mentorship program could improve literacy . As of December 2018, the above academic inmate literacy, its actual effectiveness at education programs served about 26,000 inmate improving literacy and educational attainment literacy students daily . is unclear. Accordingly, we recommend that the Legislature approve the proposed program as Despite Efforts, Inmate Literacy and a three-year pilot—rather than as an ongoing Educational Attainment Remain Low. The program as proposed by the Governor. Due department measures inmate literacy and to potential unintended consequences of educational attainment by administering the Test mandating criminal personality therapy for for Adult Basic Education (TABE) to inmates . An all inmate mentors, we also recommend that inmate’s score on the test indicates the grade the Legislature direct the administration to level at which they are able to read and is used to require that inmate mentors complete criminal help prioritize inmates for placement in education personality therapy only if they have a moderate programs . The department has a statutory or high need for such therapy. responsibility to focus on improving the reading ability of inmates to at least a 9th grade level . Background However, as of December 2018, about 53,000—or 47 percent—of inmates read below the 9th grade Education and Literacy Are Core Parts of level . Given that the existing literacy programs CDCR’s Rehabilitation Focus. Under current support 26,000 inmates, there are likely tens of state law, CDCR is required to improve inmate thousands of inmates reading below the 9th grade literacy and educational attainment . Improving level who are not receiving literacy instruction . inmate literacy and educational attainment is This could be attributed to a variety of reasons . important because research shows that education For example, the department indicates that some programs, when appropriately implemented, are inmates have assignments (such as jobs within the a cost-effective method of reducing recidivism . prison) that conflict with class schedules . Moreover, it is often necessary for inmates to 14 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Governor’s Proposal Governor’s proposal merits legislative consideration as it could be a relatively low-cost way of Provide Funding to Establish New Literacy expanding literacy education to additional inmates . Mentorship Program. The Governor’s budget However, students would only receive an average proposes $5 .5 million from the General Fund in of 90 minutes of support from inmate mentors per 2019-20—decreasing to $5 .4 million in 2020-21 week . While this would likely be higher than the and annually thereafter—for CDCR to implement Voluntary Education Program, it is far lower than an inmate literacy mentorship program . This the roughly 16 hours of instruction offered in the amount includes (1) $4 .3 million to support traditional classroom model . Furthermore, it is 35 permanent academic instructors (one per prison) unclear how effective inmate mentors would be at to create, maintain, and facilitate the program and improving inmate students’ literacy and educational (2) $1 .1 million to compensate the inmates who attainment relative to instructors . This is because participate in the program as mentors . there is little research available regarding the Utilize Inmate Mentors to Tutor Other effectives of similar inmate mentor programs . These Inmates. CDCR expects the proposed mentor factors raise questions about whether the effect of program to improve literacy levels by increasing this program would be large enough to justify its access to literacy education, leading to higher costs . TABE scores and high school diplomas/ Program Would Benefit Inmates Beyond equivalencies . Under the proposed program, each the Impact on Literacy. In addition to any instructor would train 20 inmate literacy mentors improvements in literacy, inmates who receive beginning in July 2019 . Each inmate mentor would tutoring services would receive rehabilitative then provide literacy tutoring to up to 20 inmate achievement credits for the time they spend with students . According to the department, this inmate mentors . We estimate that such inmates approach would essentially increase the reach of could earn an average of roughly a couple weeks the instructors to 400 inmate students . In addition, of credit annually through the program . Inmate CDCR indicates that inmate mentors would mentors would also benefit from the program . Over have the flexibility to provide tutoring at various the course of the required mentorship training, locations and times, which could improve access inmate mentors could earn up to six weeks of for inmates who may not otherwise attend literacy milestone completion credits and an additional programs due to conflicting assignments or work 90-day educational merit credit . We also note opportunities . that the proposed pay rate for inmate mentors of Require Inmate Mentors to Participate $0 .85 to $1 .00 per hour is competitive with the in Training Program. Inmate mentors would high end of the pay scale for other inmate work complete a three part training program, including opportunities, such as those offered through the an internship component . In addition, prior to California Prison Industry Authority (CalPIA) . or as part of training, inmate mentors would Requiring All Mentors to Take Criminal be required to complete criminal personality Personality Therapy Could Have Unintended therapy—regardless of whether they have been Consequences. In 2017-18, about 41 percent, assessed to have a moderate or high need for the or about 44,000, of assessed offenders were therapy . Following the completion of the training, found to have a moderate to high need for criminal inmate mentors would be offered a full-time work personality therapy . This suggests that many of assignment (six hours a day) paying $0 .85 to the inmate mentors could have a low need for $1 .00 per hour to mentor inmate students seeking the therapy but would nevertheless be required to improve their literacy . to receive such therapy under the Governor’s LAO Assessment proposal . This is problematic for two reasons . First, requiring such therapy for prospective mentors Program Could Improve Literacy but Actual who do not have a moderate to high need would Effectiveness Remains Unclear. We find that the increase the time it takes to train them, and as a www.lao.ca.gov 15 analysis full gutter 2019-20 BUDGET result, delay when inmate students could begin TABE scores relative to similar inmates who are receiving literacy tutoring . Second, there could enrolled in traditional education programs, as well be unintended consequences depending on as those who lack access to traditional educational how potential inmate mentors are prioritized for programs . This would help the Legislature therapy . For example, if the mentors are prioritized determine whether the program’s effects on inmate over other inmates, it could prevent offenders literacy and educational attainment is large enough with a greater need for the therapy from being to justify funding the program on an ongoing basis able to enroll in it . This is especially problematic in the future . given that, as of June 2018, CDCR only had the Remove Criminal Personality Therapy capacity to provide criminal personality therapy to Requirement Unless Mentors Have Moderate to 9,840 offenders, or about 28 percent of those who High Need. Due to the potential negative impacts have a moderate to high assessed need . of mandating criminal personality therapy for inmate Funding Does Not Account for Training. mentors, we recommend that the Legislature direct As mentioned above, the proposal includes the administration to require that inmate mentors $1 .1 million to provide a full year of pay to inmate who participate in the pilot complete criminal mentors beginning in July 2019 . However, based personality therapy only if they have a moderate or on the proposed training plan, it would take high need for the therapy . a minimum of eight months, or at least until March 2020, before an inmate completed training TATTOO REMOVAL PROGRAM and began receiving wages—suggesting that no more than $367,000 in inmate mentor wages would We recommend that the Legislature direct the be needed in the first year of implementation . administration to provide additional information regarding the Governor’s proposed tattoo LAO Recommendations removal program by April 1, 2019, in order for the Legislature to effectively evaluate the Approve Proposed Program on a Pilot proposal. Specifically, the administration should Basis. Given that it is unclear how effective report on (1) who would be eligible for the inmate mentors would be at improving literacy and program, (2) how many inmates are anticipated educational attainment, we recommend that the to need or want the service, (3) how eligible Legislature approve the proposed inmate literacy and interested inmates would be prioritized, mentorship program as a three-year pilot—rather (4) how the service would be delivered, and than as an ongoing program as proposed by (5) how the program would be evaluated. the Governor . Specifically, we recommend that If the administration is not able to provide the Legislature approve $700,000 in 2019-20, sufficient information, we would recommend the $800,000 in 2020-21 and 2021-22, and five Legislature reject the proposal. instructors on a three-year, limited-term basis . This would allow the department to implement an inmate Governor’s Proposal literacy mentorship pilot with up to 100 inmate mentors and 2,000 students across five different The Governor’s budget proposes a $2 .5 million prisons . (We note that this level of resources General Fund augmentation in 2019-20 for CDCR would account for the time it takes to train inmate to establish a tattoo removal program that would be mentors before they are paid .) available at all state prisons . CDCR estimates that the proposed level of funding would be sufficient We also recommend that the Legislature direct to remove the tattoos of 4,300 inmates annually the administration to select participating prisons (about 3 percent of the average daily inmate that would reflect the larger system, particularly population) . According to the administration, it in regards to security levels and missions . In is proposing a tattoo removal program for two addition, we recommend that the Legislature reasons . First, research suggests that certain require CDCR to report by January 10, 2022 on the tattoos, particularly those that are hard to cover up effect that the program has on inmate students’ 16 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET and/or indicate a gang affiliation, are associated from release to complete the tattoo removal with an increased risk of recidivism and could process . In not, some inmates could be make it difficult for inmates to find employment released from prison with only having their following their release from prison . Second, the tattoos partially removed . administration intends to assist inmates who are • How Many Eligible Inmates Want Tattoos leaving gangs but still have gang-related tattoos . Removed. Once eligibility criteria has been If such inmates had their tattoos removed, the established, it remains unclear how many administration believes that they would be less eligible inmates would in fact want their likely to rejoin their gangs or be victimized than tattoos removed and whether this amount otherwise would be the case . is more or less than the 4,300 inmates We note that as of 2018, the CalPIA—a the administration estimates it could serve semiautonomous state agency that provides work annually with the requested funding . Without assignments and vocational training to inmates— this information, it is difficult for the Legislature provides tattoo removal services for some of its to determine whether the proposed female inmate workers . In addition, the DJJ within $2 .5 million is the right amount to support the CDCR offers tattoo removal services to the youth program . in its facilities using two state-owned machines . • How Eligible Inmates Who Want the Service Tattoo removal is provided upon request, however, Would Be Prioritized. To the extent more DJJ prioritizes which youth will receive the service eligible inmates are interested in having their based on the date the youth is expected to return tattoos removed annually than resources to the community . allow, it is unclear how the department would prioritize certain inmates over others . For Proposal Lacks Key Information example, it is unclear whether CDCR would A tattoo removal program could result in certain prioritize inmates with gang-related tattoos, benefits—such as better employment prospects and/or if other factors—such as time left for inmates that receive the service and reduced before release—would be considered . Not recidivism . However, the Governor’s proposal lacks knowing how the department would select key pieces of information, which makes it very inmates from among those eligible for the difficult for the Legislature to assess whether the program, makes it difficult to assess whether proposed program would be effective and whether the program’s resources would be targeted the requested funding is appropriate or if a different appropriately . amount is necessary . • How Service Would Be Delivered. At this Specifically, the Governor’s proposal lacks time, there is limited information available basic information on the following aspects of the on how the program’s service would be proposed program: delivered to inmates . For example, it is not clear if CDCR would use state staff or private • Who Would Be Eligible. The administration contractors to remove tattoos . It is also has not been able to specify the pool of unclear if the department plans to maintain inmates who would be eligible for the tattoo removal equipment at each prison or if program . For example, it is not clear if the it plans to use mobile equipment to provide program would be limited to inmates with services at multiple facilities . We note that tattoos that are hard to cover up and/or the CalPIA’s tattoo removal program is a indicate a gang affiliation or if all inmates contracted mobile service while the DJJ with a tattoo would be eligible . We also note program uses state-owned machines located that removing a tattoo is a lengthy process at two of its three facilities . The structure of that could take several months to a year to the proposed program could significantly complete . It is unclear if the program would impact the upfront or ongoing costs of the be limited to inmates who are far enough program . For example, if CDCR chooses to www.lao.ca.gov 17 analysis full gutter 2019-20 BUDGET purchase equipment, as DJJ did, then there General Fund support proposed to implement would likely be higher upfront costs that would a new mentorship program for juvenile decline somewhat in future years . offenders. Until such information is provided • How the Program Would Be Evaluated. by the administration, we recommend that the It also unclear whether or how the program Legislature withhold action on the Governor’s would be evaluated for its effectiveness . proposal. To the extent that the administration Without an evaluation, it would be difficult for is unable to justify the level of funding the Legislature to assess whether this program requested—specifically the funding for training, should continue or be modified in the future . travel, supervision, and administration costs— we recommend the Legislature only approve While the Governor’s proposal currently lacks $667,000 from the General Fund for three years the above information needed for the Legislature to align with the AmeriCorps grant process and to effectively assess its merits and viability, our be consistent with the potential level of need understanding is that the administration is in the currently identified by DJJ. process of restructuring the proposal and plans to provide additional details about the proposed Background program this spring . Honorable Discharge. Chapter 683 of 2017 LAO Recommendations (SB 625, Atkins), reestablished an honorable discharge process for former wards of DJJ . In view of the above, we recommend that the (The previous honorable discharge process Legislature direct the administration to provide was effectively eliminated when responsibility additional information regarding the proposed tattoo for supervising DJJ parolees was shifted—or removal program . Specifically, the administration realigned—from the state to county probation should report on (1) the criteria that will be used departments in 2010 .) Under this process, the to determine inmate eligibility, (2) the estimated Board of Juvenile Hearings—which also determines number of eligible inmates who would be interested when wards are released from DJJ—has the in removing their tattoos (including the assumptions authority to grant honorable discharge to former behind this estimate), (3) how eligible and interested DJJ wards who have demonstrated their ability inmates would be prioritized if sufficient resources to refrain from criminal behavior and initiate a are unavailable, (4) how the tattoo removal service successful transition to adulthood . To qualify for would be delivered, and (5) a plan for how it would honorable discharge, former wards must wait at evaluate the cost-effectiveness of the program least 18 months from their discharge from DJJ at reducing recidivism . In order to ensure that custody and must have completed any required the Legislature has sufficient time to consider the periods of probation supervision . Individuals can above information in its budget deliberations, we petition for honorable discharge regardless of recommend that the administration provide the whether they were released from DJJ custody prior information by April 1, 2019 . To the extent that the to or following the reestablishment of honorable administration is not able to provide information discharge . In 2018, the board only received six on the key aspects of its proposal by that time, complete applications and only awarded three we would recommend the Legislature reject the honorable discharges . proposal . The state offers honorable discharges to youth for several reasons . These include recognizing and DJJ PARTNERSHIP WITH rewarding youth who have avoided reoffending, CALIFORNIA VOLUNTEERS removing barriers to a youth’s successful integration into society, and providing an incentive We recommend that the Legislature for youth to participate in treatment and training direct the administration to provide detailed while placed in DJJ . In addition, receiving an justification for the $2 million in ongoing honorable discharge can be used as evidence of 18 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET rehabilitation, which is one of the requirements for motivational interviewing, and life coaching sealing a juvenile adjudication—meaning the case certifications . Upon completing their terms of would be deemed to have never occurred and service, volunteers would be eligible for Segal access to the records would generally be restricted . AmeriCorps Education Awards of about $3,000 . AmeriCorps. AmeriCorps is a national service Provide Funding for Partnership With program that provides year-long volunteering CaliforniaVolunteers to Support Program. opportunities to address critical community needs . The Governor’s budget for 2019-20 proposes AmeriCorps volunteers can receive a small living $2 million from the General Fund to implement allowance while in the program . Upon completion the proposed mentorship program on an ongoing of the program, volunteers are eligible to receive basis . In addition, CaliforniaVolunteers has set a monetary Segal AmeriCorps Education Award aside $900,000 in federal AmeriCorps grant funds from the federal government, which can be used to be spent over three years (from 2019-20 through to pay for higher education expenses or help pay 2021-22) to support the program . We note that off qualified student loans . In addition, AmeriCorps after 2021-22, the availability of AmeriCorps provides grants to support volunteer programs funding for the program—and the program’s administered by states or other entities . AmeriCorps affiliation—would depend on the grant CaliforniaVolunteers. CaliforniaVolunteers is being renewed by AmeriCorps for another three a non-profit entity housed within the Governor’s years . Office of Planning and Research . It administers The proposed funding would provide living $40 million annually in federal AmeriCorps grants in allowances of $14,815 to the 40 half-time support of programs in California such as programs AmeriCorps volunteers at a total annual cost of aimed at disaster preparedness and recovery, about $600,000 . According to the administration, connecting homeless individuals to resources, and any remaining funding—roughly $1 .7 million providing assistance at self-help legal centers . per year, or 74 percent of available funds— would support training, travel, supervision, and Governor’s Proposal administration costs . Establish Mentorship Program to Increase LAO Assessment Honorable Discharges. The administration proposes to create a mentorship program utilizing Proposed Mentorship Program Could Have 40 half-time AmeriCorps volunteers to help Merit . . . The Governor’s proposal could increase increase the number of former DJJ wards who honorable discharges and improve outcomes to receive honorable discharge . Under the proposal, the extent that it effectively expands outreach to the AmeriCorps volunteers would coach and youth, facilitates connections between youth and mentor youth currently or formerly housed in DJJ reentry services, and provides peer mentorship . in an attempt to increase the youths’ ability to Accordingly, we find that the proposal merits receive honorable discharges by (1) helping them legislative consideration . navigate the honorable discharge process and . . . But Proposed Funding Not Fully Justified. (2) encouraging them to utilize reentry resources The administration has not fully justified the need provided by community-based nonprofit and public for the proposed $2 million in annual General Fund organizations, such as case management, job support—both in terms of the amount and the skills training, and referrals to other rehabilitative ongoing nature of the funding . Specifically, the resources and opportunities . administration has not provided detailed workload The AmeriCorps volunteers would be chosen justification for the $1 .7 million that would support from applicants with prior involvement in the training, travel, supervision, and administration . We criminal justice system, either in the form of a note that the proposed funding set aside for these juvenile adjudication or adult incarceration . The costs would amount to $42,500 per volunteer . volunteers would receive training to improve skills By comparison, the living allowance that each relevant to their positions including leadership, volunteer would receive is only $14,815 . Moreover, www.lao.ca.gov 19 analysis full gutter 2019-20 BUDGET DJJ states that in order to implement the program, Background it may only need $667,000 per year in General Fund CDCR Uses Vehicles for Various Purposes. rather than the proposed amount of $2 million . CDCR owns nearly 7,700 vehicles of varying types We also note that the Governor’s proposal to (ranging from golf carts to farming equipment) that provide ongoing funding assumes that the federal are used for a variety of purposes, including inmate AmeriCorps grant will be renewed after the grant’s transportation (both within and outside of prison three-year cycle ends in 2021-22 . Given the grounds), fire protection, construction support, uncertainty on whether the grant will in fact be and institution perimeter security . CDCR staff and renewed, it would make more sense to provide inmate workers generally maintain the department’s General Fund support on a three-year basis to vehicles . However, they are sometimes sent out for track with the time frame of the AmeriCorps grant . more complex repairs . The administration states that it may revise the Department of General Services (DGS) Sets amount requested in the spring budget process Vehicle Replacement Thresholds. DGS sets once it has a better understanding of the workload policy for and approves all state vehicle purchases . and necessary funding . Specifically, DGS sets replacement thresholds LAO Recommendations for different types of vehicles that, if met, make a vehicle eligible for replacement . For example, We recommend that the Legislature direct the a sedan that either has over 65,000 miles or is administration to provide detailed justification for older than six years is eligible for replacement . In the $2 million in ongoing General Fund support determining the vehicle replacement thresholds, proposed for the new mentorship program . Until DGS hired a consultant in 2016 to estimate the age such information is provided by the administration, and mileage levels at which it is more cost-effective we recommend that the Legislature withhold action to replace various types of vehicles rather than on the Governor’s proposal . To the extent that repair them, based on actual data on state vehicle the administration is unable to justify the level of price, operational cost, and resale value . By funding requested—specifically the funding for replacing vehicles according to these thresholds, training, travel, supervision, and administration DGS expects that departments would minimize costs—we recommend the Legislature only approve the total costs of the state’s vehicle fleet . Currently $667,000 from the General Fund for three years 5,500 of CDCR’s 7,700 vehicles exceed DGS’s to align with the AmeriCorps grant process and be thresholds for replacement . consistent with the potential level of need currently CDCR Does Not Have Ongoing Funding identified by DJJ . Specifically for Vehicle Replacement. CDCR’s baseline budget does not include ongoing funding VEHICLE REPLACEMENT dedicated to vehicle replacement . The Legislature SCHEDULE has on occasion provided one-time funding for the department to purchase vehicles . For example, the We recommend that the Legislature direct 2018-19 budget provided CDCR with $17 .5 million CDCR to estimate the maintenance, repair, and in one-time General Fund support to replace 338 fuel savings as well as the increase in auction vehicles that are used for transporting inmates to revenue that it would generate by implementing health care and other appointments . Historically, the proposed vehicle replacement program so the department has also used some of the funding that the department’s overall budget can be it has budgeted for major equipment purchases— adjusted to account for these savings. If the currently set at $8 million—to purchase vehicles, department is able to demonstrate that these as well as redirected funding originally intended for savings would occur, we recommend approving other purposes . In addition, when CDCR replaces the requested funds in a separate budget item a vehicle, the old vehicle is sold at auction, with to prevent them from being redirected for other revenue generated—typically in the low hundreds purposes. of thousands of dollars annually—used to offset 20 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET the costs of future vehicle purchases . In total, proposal would reduce the amount it spends on CDCR spent roughly $15 million per year on vehicle vehicle maintenance, repair, and fuel, and increase purchases between 2013-14 and 2017-18 . the resale value of the replaced vehicles . However, the proposal does not account for any of the Governor’s Proposal expected savings . Proposes Ongoing Funding to Establish Proposed Funding Could Be Redirected to Vehicle Replacement Program. The Governor’s Other Purposes. The administration proposes budget proposes $24 million from the General to increase CDCR’s overall administrative budget Fund and four positions in 2019-20 and ongoing to account for the requested vehicle replacement for CDCR to establish a vehicle replacement funding without requiring that the department program . In addition, the Governor proposes to actually spend this funding on vehicles . As such, permanently redirect the $8 million that CDCR the department could redirect the $32 million currently dedicates to major equipment purchases for vehicle replacement to other administrative to be spent solely on vehicles, bringing the total purposes without any legislative oversight provided . annual funding for the vehicle replacement program To the extent CDCR redirects this funding, the to $32 million . The amount of vehicles purchased costs to maintain the existing fleet would increase, in each year would depend on the actual types of which would run counter to the purpose of the vehicles being replaced, as some vehicle types cost Governor’s proposal . significantly more than others . LAO Recommendations Anticipates Cost Savings Would Result From Proposed Program. The department plans to Require CDCR to Estimate Savings and use this funding to replace every vehicle roughly Reduce Budget Accordingly. In view of the above, every seven years—generally consistent with the we recommend that the Legislature direct CDCR to replacement thresholds set by DGS . According estimate the maintenance, repair, and fuel savings, to CDCR, this replacement schedule would result as well as the increase in auction revenue from the in cost savings on vehicle maintenance, repair, sale of the replaced vehicles, that it indicates would and fuel, as well an increase in the resale value of be generated by implementing the proposed vehicle replaced vehicles . CDCR also notes that improving replacement program, and provide such estimates the overall condition of its vehicle fleet would help by April 1, 2019 . After CDCR provides a reasonable reduce the department’s risk of having difficulty savings estimate, we recommend the Legislature performing key functions—such as transporting reduce its budget by this amount . This would allow inmates between facilities—due to vehicle the Legislature to consider the available savings in malfunctions . the context of its overall General Fund priorities . Approve Proposed Funding but Restrict Its LAO Assessment Use. After the department is able to demonstrate More Frequent Replacement of Vehicles that the proposal would result in savings as Appears Reasonable but Proposal Does Not described above, we would recommend that the Account for Anticipated Savings. Given that Legislature approve the requested $32 million CDCR’s vehicle fleet generally appears to be for vehicle replacement . However, we would quite old and in relatively poor condition, as well recommend that the Legislature budget the funds as the negative impact of not having reliable in a separate appropriation to prevent them from vehicles available, we find that the overall goal of being redirected for other purposes . the Governor’s proposal appears reasonable . As mentioned above, the department expects that the www.lao.ca.gov 21 analysis full gutter 2019-20 BUDGET JUDICIAL BRANCH OVERVIEW or efforts in 8 to10 courts related to pretrial decision-making . The judicial branch is responsible for the • $60 .1 million in General Fund support interpretation of law, the protection of individuals’ ($40 million on a one-time basis) for the rights, the orderly settlement of all legal disputes, maintenance of trial court facilities . and the adjudication of accusations of legal • $44 .2 million in General Fund support (mostly violations . The branch consists of statewide on a one-time basis) for the replacement of courts (the Supreme Court and Courts of Appeal), case management systems and various other trial courts in each of the state’s 58 counties, IT projects . and statewide entities of the branch (the Judicial Council, the Judicial Council Facility Program, Of the total $4 .2 billion in state funding and the Habeas Corpus Resource Center) . The proposed for judicial branch operations in 2019-20, branch receives revenues from several funding $2 .1 billion is from the General Fund—nearly half sources including the state General Fund, civil of the total judicial branch budget . This is a net filing fees, criminal penalties and fines, county increase of $217 million, or 11 .4 percent, from the maintenance-of-effort payments, and federal 2018-19 amount . grants . Figure 6 shows total operational funding for the PRETRIAL RELEASE judicial branch from 2015-16 through 2019-20 . GRANT PROGRAM Total funding for the judicial branch has steadily increased and is proposed to exceed $4 billion in We recommend the Legislature direct the 2019-20 . administration and Judicial Council to provide As shown in Figure 7, the Governor’s budget a well-developed proposal by April 15, 2019 on proposes about $4 .2 billion from all state funds the request for $75 million in one-time General (General Fund and state special funds) to support the operations Figure 6 of the judicial branch in 2019-20, Total Judicial Branch Funding an increase of $310 million, or (In Billions) 8 percent, above the revised amount for 2018-19 . (These 5 Local Revenues totals do not include expenditures State Special Funds from local revenues or trial court 4 General Fund reserves .) This increase reflects various proposals to increase 3 spending, particularly for the support of trial courts . The major proposals include: 2 • $75 million in one-time 1 General Fund support to Judicial Council for a grant program to fund the 2015-16 2016-17 2017-18 2018-19 2019-20 implementation, operation, (Estimated) (Projected) or evaluation of programs 22 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Figure 7 Judicial Branch Operational Budget Summary—All State Funds (Dollars in Millions) Change From 2018-19 2017-18 2018-19 2019-20 Actual Estimated Proposed Amount Percent State Trial Courts $2,755 $2,945 $3,156 $211 7.2% Supreme Court 48 51 52 1 1.1 Courts of Appeal 235 246 247 1 0.6 Judicial Council 136 153 172 19 12.3 Judicial Branch Facility Program 478 450 528 78 17.4 Habeas Corpus Resource Center 16 17 17 — 0.4 Totals $3,669 $3,862 $4,172 $310 8.0% Fund support for a two-year pretrial release county annually adopt a uniform, countywide bail grant program. Specifically, the proposal should schedule . The bail schedule generally specifies specify (1) the primary goals of the proposed the amount of bail an individual must pay to be program, (2) the specific programs or activities released based on his or her alleged offense . In that would be funded and how they are setting or denying bail, state law requires judges aligned with the goals, (3) how funding would consider various factors . These factors include the be allocated, and (4) how funded programs seriousness of the charged offense, the individual’s or activities would be evaluated to inform prior criminal history, the likelihood of appearing at statewide decision-making. This would help trial, and the safety of the victim or witnesses of the the Legislature effectively evaluate whether the alleged crime . proposed program meets its priorities. Pending Existing state law also authorizes arrested receipt and review of the above information, we individuals to be released “on their own withhold recommendation on the Governor’s recognizance”—that is, without bail—and specifies proposed pretrial grant program. To the extent the conditions under which such releases may that the administration and the Judicial Council take place . While individuals released on their are unable to provide a more well-developed own recognizance are not required to pay bail, proposal, we would recommend the Legislature they generally are required to adhere to certain reject the proposed program. conditions (such as agreeing to appear in court or wear a monitoring device) . In certain counties, trial Background courts use information from outside agencies to Overview of Pretrial Release. Pretrial release determine whether to release individuals on their generally refers to an arrested individual being own recognizance . For example, probation staff in released from jail prior to their trial . A common some counties use a pretrial risk assessment tool way that this occurs is by requiring individuals to to collect information from arrested individuals to pay bail . This is intended to give them an incentive assess their likelihood of failing to appear in court to return to court . Existing federal and state or committing another crime . The tool then helps law generally guarantees individuals the right to generate a recommendation on whether individuals reasonable bail before trial . State law generally should be released on their own recognizance . This requires that individuals be granted release on bail information can be used by judges to inform their except under specified circumstances, such as if final decisions on whether individuals should be an individual is charged with a felony and there is released on their own recognizance . a substantial likelihood that the person’s release Recent Efforts to Change Pretrial Release. would result in great bodily harm to others . Existing In recent years, significant concerns have been state law also requires that the trial court in each raised by criminal justice stakeholders, civil rights www.lao.ca.gov 23 analysis full gutter 2019-20 BUDGET organizations, and others related to how pretrial recidivism, including the use of risk and needs release is determined . Specifically, question have assessments and the use of evidence-based been raised about the fairness of individuals practices . (The RRF was supported remaining in custody pretrial solely because they by one-time savings resulting from the cannot afford bail . Additionally, questions have underutilization of funding provided to CDCR been raised about whether pretrial risk assessment in 2013-14 for contract prison beds .) We note tools accurately identify those individuals who are that $5 .7 million was allocated specifically to likely to fail to appear in court or represent a risk to support 11 pretrial pilot projects . Nine of these public safety and whether they have built-in implicit projects indicate that they are continuing to biases against certain categories of individuals . operate even after the RRF grant program These concerns have led to a variety of efforts ended . Judicial Council is required to submit to change the pretrial release decision-making a report in 2019 on the outcomes of the process . These efforts include the following: funded projects, including their effectiveness and impact on public safety and offender • Statewide Judicial Branch Initiatives. In outcomes . 2016, the Chief Justice convened the Pretrial • Chapter 244 of 2018 (SB 10, Hertzberg). Detention Reform Workgroup to study current Senate Bill 10 eliminates money bail in pretrial release and detention practices California and replaces it with a process in and provide recommendations for potential which individuals would be released on their reforms . This workgroup issued a report in own recognizance . While some arrested October 2017 with ten recommendations, individuals would be released automatically including implementing a risk-based pretrial (predominantly for certain misdemeanors), assessment and supervision system to replace others would be released based on their the current monetary bail system . In January level of risk to reoffend and fail to appear 2019, the Chief Justice convened a Pretrial in court as determined by a pretrial risk Reform and Operations Workgroup to review assessment . Based on these assessments, an the progress of pretrial reforms and identify individual could be (1) released on their own next steps to continue reform efforts . recognizance but required to adhere to certain • Individual Trial Court Initiatives. A number conditions of release, (2) detained until a judge of individual trial courts and/or their county can review the case prior to arraignment, criminal justice partners have implemented or (3) detained until arraignment (typically various pretrial programs and pilots . within 48 hours of arrest) when a judge would According to a 2015 survey of counties, determine whether the individual should be 46 of 58 counties had some type of pretrial released on his or her own recognizance program, with 70 percent being established or detained until trial . On January 16, within the past five years . Some counties— 2019, the Secretary of State certified that such as San Francisco, Riverside, and Santa sufficient signatures were collected to qualify Cruz—have had pretrial programs for many a referendum on SB 10 for the November years . This survey also indicated that at 2020 ballot . This placed the implementation of least 49 counties use a type of pretrial risk SB 10 on hold . assessment tool that provides judges with • Pending Court Cases. There are several information about the risk of releasing a court cases pending in the federal and state defendant before trial . courts challenging the use of bail related • Recidivism Reduction Fund (RRF) Pretrial to pretrial releases . For example, the state Pilots. The 2014-15 and 2015-16 budgets Court of Appeal ordered a new bail hearing appropriated a total of $16 .3 million from for a specific individual—who was unable the RRF for a competitive grant program to to pay the bail set by a judge and remained support projects known to reduce offender detained prior to his trial—as it found that 24 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET the rules used to set his original bail were including identifying potential bias in pretrial risk unconstitutional . The Court of Appeal assessment tools . also ruled that a judge must consider this LAO Assessment individual’s ability to pay bail as well as consider alternatives to bail that could ensure Lack of Detail on Proposed Grant Program. public safety or that he returns to court as While it is possible that the Governor’s proposed ordered . This case is currently pending review grant program could be worthwhile, the Legislature at the California Supreme Court . currently lacks sufficient information to effectively evaluate the proposal and weigh the proposed Governor’s Proposal funding relative to its other General Fund priorities . This is because it is unclear (1) what specific goals The Governor’s 2019-20 budget proposes a the program is intended to achieve, (2) whether one-time $75 million General Fund augmentation the eligible projects that could be funded are for Judicial Council to administer a two-year aligned with these goals, (3) how the proposed grant program related to pretrial release . funding would be allocated, and (4) how the funded Under the proposed program, funding would projects would be evaluated to inform future be allocated to eight to ten courts for the budgetary and policy decisions . implementation, operation, or evaluation of pretrial Well-Developed Proposal Should Include decision-making programs or efforts . According to Certain Key Information. In contrast, a the administration, eligible projects include those well-developed proposal should include certain key related to: pieces of information in order to ensure that the • Validating that risk assessment tools are proposed funding will be used in an accountable appropriate for use on local populations . and effective manner . Specifically, the Governor’s • Establishing exchanges of pretrial risk proposal should answer the following questions: assessment information between courts and • What Are the Primary Goals of the county probation departments . Program? Specifying the primary goals of • Establishing data exchanges among the a proposed program helps ensure that the courts and county probation departments program is structured in a manner capable prior to arraignment . of achieving those goals . For example, if the • Establishing contracts between the courts goal of the program is to determine whether and county probation departments to conduct particular pretrial tools or methods are more pretrial risk assessments . effective than others, it could make more • Supporting judicial officer release and sense to pilot particular tools or methods at detention decision-making prior to a variety of courts that could be compared arraignment . against one another—a structure that is • Creating reminders for individuals to appear in different from the proposed program . court . • What Program or Activities Would Be • Utilizing other projects related to pretrial Supported? Clearly specifying the number decision-making that enhance public safety, and type of programs or activities that will the likelihood of appearance in court, and the be funded would help ensure that legislative efficient and fair administration of justice . priorities and expectations are met . We note that identifying the specific activities According to the judicial branch, the Pretrial that would be supported helps ensure that Reform and Operations Workgroup would develop any new grant funding will not be used to recommendations for allocating the above funding . (1) duplicate projects that have already Under the Governor’s proposal, 10 percent of been funded and evaluated (such as those the funds could be used by the Judicial Council supported by RRF funds) and (2) support to implement and evaluate the funded programs, www.lao.ca.gov 25 analysis full gutter 2019-20 BUDGET programs that implement provisions of SB 10, funded and how they are aligned with the goals, which is prohibited given that the measure is (3) how funding would be allocated, and (4) how currently subject to a referendum . funded programs or activities would be evaluated • How Would Funding Be Allocated? Clearly to inform statewide decision-making . This would specifying the methodology and criteria used help the Legislature effectively evaluate whether the to allocate funding will help the Legislature proposed program is aligned with its priorities . ensure that funding is distributed in a fair and Withhold Recommendation Pending transparent manner that meets legislative Additional Information. Pending receipt and priorities . It will also be important to ensure review of the above information, we withhold that funding is allocated to a sufficient number recommendation on the Governor’s proposed of courts as well as a mix of courts based on pretrial grant program . To the extent that the size and other factors, in order to ensure that administration and the Judicial Council are unable the results can be generalized statewide . We to provide a more well-developed proposal, we note that under the administration’s proposal, would recommend the Legislature reject the nearly all such decisions would be made by proposed program . Judicial Council—providing the Legislature with little input to ensure funding is used in a IMPROVEMENT AND manner consistent with its priorities . MODERNIZATION FUND • How Would Programs or Activities Be Evaluated? Clearly specifying (1) how funded While the Governor’s proposal would help programs and activities would be evaluated prevent the State Trial Court Improvement and (2) the specific information that programs and Modernization Fund (IMF) from becoming would be expected to collect would help insolvent in 2019-20, it does not provide a the Legislature ensure that funded projects long-term solution to address the fund’s or activities are evaluated in a manner that projected operational shortfalls and potential can generate information to inform statewide insolvency after 2019-20. In order to address decision-making . As such, it is important to these concerns, as well increase legislative identify specific outcome or performance oversight over the programs that have been measures that would be collected (such as funded from the IMF, we recommend an the number of people served and the ability alternative approach to the Governor’s proposal. of a risk assessment tool to accurately Specifically, we recommend (1) depositing IMF measure risk of committing another offense revenues into the General Fund and eliminating or to appear in court) . It is also important to the IMF, (2) directing the judicial branch to clearly specify how certain measures should report on each program currently receiving IMF be defined in order to ensure programs collect funding (such as past expenditure and benefits information consistently . achieved), and (3) appropriating one-time funding in 2019-20 for these programs while the LAO Recommendations aforementioned assessment is being completed. Direct Administration and Judicial Council Background to Provide Well-Developed Proposal. In view Two Separate Judicial Branch Funds. In of the above, we recommend that the Legislature 1997, the state took significant steps towards direct the administration and Judicial Council to shifting responsibility for trial courts from counties provide a more well-developed proposal regarding to the state . For example, Chapter 850 of 1997 the proposed grant program by April 15, 2019 . (AB 233, Escutia and Pringle) transferred financial Specifically, the proposal should specify (1) the responsibility for trial courts (above a fixed primary goals of the proposed program, (2) the county share) to the state . Chapter 850 also specific programs or activities that would be established the following two special funds to 26 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET benefit trial courts, which as we discuss later, were approving and allocating monies to specific projects consolidated in 2012 . or programs . Accordingly, the Legislature’s role in determining how the funds were used was limited . • Judicial Administration Efficiency and Two Funds Merged Into IMF. Chapter 41 of Modernization Fund. The purpose of this 2012 (SB 102, Committee on Budget and Fiscal fund was to promote projects designed to Review) merged the Judicial Administration increase access, efficiency, and effectiveness Efficiency and Modernization Fund with the Trial of the trial courts . Such projects included Court Improvement Fund into the new IMF . While judicial or court staff education programs, there are some differences between the IMF and technological improvements, incentives to the previous two funds, there are many similarities . retain experienced judges, and improvements in legal research (such as through the use • Revenues. The IMF retained all sources of of technology) . The fund received monies revenue associated with the two prior funds, primarily from a General Fund transfer to such as fines and fees from criminal cases . the judicial branch . This fund received about • Fund Transfers. As discussed above, $38 .7 million annually from the General various monies were required to be Fund from 2008-09 through 2011-12 (when transferred into and out of the two funds . the fund was merged with the Trial Court The IMF generally maintained these various Improvement Fund, as discussed below .) We transfers . For example, the IMF is required note that some of these funds were redirected to annually transfer a portion of its revenues to help offset reductions to the trial courts in to the TCTF . We note that the $38 .7 million 2010-11 and 2011-12 . initially transferred from the General Fund • Trial Court Improvement Fund. The to the Judicial Administration Efficiency purpose of this fund was to support various and Modernization Fund was subsequently projects approved by the Judicial Council . transferred to the IMF each year through The fund received monies from (1) fine 2014-15 . and fee revenue from criminal cases and • Expenditures. While the Legislature (2) a transfer of 1 percent of the amount appropriates a total amount of funding from appropriated to support court operations the IMF in the annual state budget, the from the Trial Court Trust Fund (TCTF) . (The Judicial Council generally has even more TCTF provides most of the funding to support discretion in how the funds are allocated to trial court operations .) While the Judicial specific projects and activities than previously . Council had significant flexibility regarding the Except for a couple requirements (such as the expenditures of monies in the fund, some of requirement that a certain portion of the fine the monies were restricted for specified uses . and fee revenue be used for the development For example, a portion of the fine and fee of automated administrative systems), none revenues had to be used for the development of the statutory purposes that applied to of automated administrative systems (such the two previous funds (such as to improve as accounting, data collection, or case legal research through the use of technology) processing systems) . State law also required currently apply to the IMF . The judicial branch that some of the monies from the Trial Court is only required to provide an annual report to Improvement Fund be redirected back for the Legislature on the expenditures from the allocations to trial courts for court operations . IMF . While the Legislature would appropriate a set amount of funding from the Judicial Administration IMF Struggles to Remain Solvent Efficiency and Modernization Fund and the Trial Persistent Operational Shortfalls. Prior to Court Improvement Fund each year in the annual the establishment of the IMF in 2012-13, the budget, Judicial Council was responsible for combined revenues and transfers of the two prior www.lao.ca.gov 27 analysis full gutter 2019-20 BUDGET funds generally did not cover Figure 8 their expenditures, as shown in IMF Expenditures Typically Exceed Figure 8 . Upon the consolidation Revenues, Creating an Operational Shortfall of the two funds into the IMF (In Millions) in 2012-13, these shortfalls continued, steadily reducing the $200 IMF’s fund balance . For example, 180 in 2018-19, the IMF is estimated 160 Expenditures to have combined revenues and 140 transfers of $54 .5 million and 120 expenditures of $60 .4 million . As 100 we discuss below, these shortfalls 80 in the IMF result from (1) declines 60 in fine and fee revenue deposited 40 into the IMF and (2) spending Revenues and Transfers 20 decisions made by Judicial Council . 2008-09 2010-11 2012-13a 2014-15 2016-17 2018-19 Decline in Fine and Fee (Estimated) Revenue. When partial payments a Improvement and Modernization Fund (IMF) created in 2012-13. are collected from an individual for criminal fines and fees levied the total amount of fine and fee collections had by the courts, state law specifies remained the same, state and local funds that are the order in which the partial payments are to be a higher priority in the distribution of fine and fee allocated to various state and local funds . In cases payments may have been receiving an increased where full payment is not made, funds that are a share of the revenue compared to the IMF . lower priority (such as the IMF) receive less revenue than those funds that are a higher priority (such as victim restitution or reimbursement for certain collection activities) . Figure 9 As shown in Figure 9, fine and fee revenues deposited into the Steady Decline in Fine and Fee Revenue to the IMF IMF and its predecessor have (In Millions) steadily declined from $76 million $80 in 2008-09 to an estimated $22 million in 2018-19—a drop of 70 71 percent . The specific causes 60 of this decline may be due to two 50 reasons . First, there may have been a reduction in collections 40 of the fine and fee revenues 30 allocated to the IMF . For example, 20 law enforcement could be writing fewer tickets for traffic violations 10 or judges may be waiving more fines and fees—thereby reducing 2008-09 2010-11 2012-13a 2014-15 2016-17 2018-19 (Estimated) the amount of debt available a Improvement and Modernization Fund (IMF) created in 2012-13. for collection . Second, even if 28 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Judicial Council Authorized More Governor’s Proposal Expenditures Than Available Revenues. As The Governor’s 2019-20 budget proposes a discussed above, state law authorizes Judicial total of $13 .3 million in General Fund support for Council to allocate funds from the IMF, as well as expenditures for two activities currently supported its predecessor funds, to specific projects and by both the IMF and the General Fund . Specially, programs with very little legislative oversight . Once the administration proposes to (1) upgrade an IT annual revenue into the IMF began declining, the system and (2) address increased litigation costs . Judicial Council struggled to reduce expenditures Additionally, the administration proposes to shift to match the amount of available resources . some existing IMF expenditures on these two Although the council took some steps to address activities to help prevent the IMF from becoming the operational shortfalls by eliminating or reducing insolvent . certain projects, or shifting projects to other fund sources, it continued to authorize funding • Phoenix System ($7.7 Million). The for projects and services in excess of available administration proposes to increase ongoing resources . In 2008-09, about $155 million was General Fund support for the Phoenix spent to support over 90 one-time and ongoing enterprise resource and management projects or services . In contrast, the judicial system by $7 .7 million—from $8 .7 million branch estimates the IMF will support about (first provided in 2016-17) to $16 .4 million . 40 one-time and ongoing projects or services in (Phoenix is the financial, procurement, and 2018-19 . These projects and services vary widely, payroll system used by the trial courts .)This but include support for self-help centers, training, amount consists of (1) $3 .2 million to offset telecommunications support, and various IT existing IMF support for the system and services . (2) $4 .5 million for increased system upgrade costs . (Because the cost of the proposed State Actions Taken to Address upgrades is estimated to decline over time, Operational Shortfalls the $4 .5 million for upgrades would fall to $1 .2 million in 2020-21 and $720,000 in The persistent operational shortfalls of the fund 2021-22 and annually thereafter under the also led the state to act beginning in 2015-16 . Governor’s proposal .) This proposal would First, the Legislature increased revenue available effectively eliminate IMF support of the in the IMF in 2015-16 by terminating an annual Phoenix system . ongoing $20 million transfer from the IMF to the TCTF . (This transfer was first approved as part of • Litigation Management Program the 2011-12 budget package to help offset trial ($5.6 Million). The Governor’s budget court budget reductions .) Second, various budget proposes a $5 .6 million General Fund proposals have been approved to help shift some augmentation for the Litigation Management or all funding for certain programs and systems Program, which provides services to judicial from the IMF to the General Fund . In addition, branch entities . This amount consists of the Legislature provided General Fund support (1) $5 .2 million to offset existing IMF support to pay for the expansion of some programs and for the program and (2) $449,000 related to systems that otherwise would have been paid by increased litigation costs . the IMF if sufficient resources were available . For example, the 2015-16 budget included $5 .5 million LAO Assessment in ongoing General Fund support to expand the Proposal Helps Prevent IMF Insolvency in judicial branch’s Local Area Network/Wide Area 2019-20. We find the administration’s proposal Network telecommunications network infrastructure to be reasonable as the identified programs are program to include the final four courts that did not necessary for judicial branch operations and the participate in the network at that time . requested amounts appear justified on a workload www.lao.ca.gov 29 analysis full gutter 2019-20 BUDGET basis . Additionally, the administration’s proposal assessment is being completed . (We note that also helps prevent the IMF from becoming insolvent these recommendations are consistent with in the budget year . the recommendations included in our January But Operational Shortfalls Projected to 2016 report Improving California’s Criminal Fine and Remain With Possible Insolvency in 2020-21. Fee System .) However, absent any additional actions, the IMF is Deposit IMF Revenues Into the General projected to continue to face operational shortfalls Fund and Eliminate IMF. Nearly all of the revenue in the coming years—a structural problem that has deposited into the IMF, other than General Fund remained unaddressed for years and is expected to monies, is from criminal fine and fee revenue . remain . Specifically, the judicial branch is projecting Depositing all of the criminal fine and fee revenue a $6 million operational shortfall in 2018-19 and into the General Fund achieves three major a $8 .6 million operational shortfall in 2019-20 . benefits . First, the amount of funding provided Moreover, the IMF fund balance is projected to to support IMF programs would no longer be be depleted at the end of the 2019-20 under the dependent on the amount of criminal fine and fee Governor’s proposal, which would result in the revenue collected . This allows the judicial branch IMF becoming insolvent in 2020-21, unless further and administration to base the level of support it changes—such as expenditure reductions—are requests for programs currently funded by the IMF made . on their operational needs rather than the amount Lack of Legislative Oversight Over IMF of revenue that happens to be available . Second, Programs and Systems. The Legislature generally this allows the Legislature to determine how much lacks oversight of the IMF programs and systems funding to allocate to these programs based on its as they are informed only after expenditures are overall priorities . Finally, given that the IMF is likely made . This is problematic as this makes it difficult to continue to face operational shortfalls, this would for the Legislature to ensure that its priorities are eliminate the need to identify solutions annually to met regarding which programs and systems are address such shortfalls and avoid IMF insolvency . funded and how much funding is provided . For Direct the Judicial Branch to Report on All example, the Legislature may determine that certain Programs Currently Receiving IMF Funding. To programs are less important and should bear a assist in its budget deliberations, the Legislature larger share of any reductions needed for the IMF would need to acquire information on how IMF to avoid operational shortfalls . funding is currently being used . As such, we recommend the Legislature direct the judicial LAO Recommendations branch to provide a report by December 1, 2019 on While the Governor’s proposal would help each of the programs and systems currently prevent the IMF from becoming insolvent in supported by the IMF, including information on 2019-20, it does not provide a long-term solution to past expenditures and the benefits achieved . This address the fund’s projected operational shortfalls would provide the Legislature with the necessary and potential insolvency after 2019-20 . In order to information to evaluate the need for each program address these concerns, as well increase legislative and system and its cost-effectiveness relative to oversight over the programs that have been funded all of the other state programs currently supported from the IMF, we recommend below an alternative by the General Fund . It would also help the approach to the Governor’s proposal . Specifically, Legislature determine what level of funding, if any, we recommend the Legislature (1) deposit IMF is appropriate to provide these programs and revenues into the General Fund and eliminate systems . This recommendation, in addition to the the IMF, (2) direct the judicial branch to report prior recommendation, would greatly increase on each program currently receiving IMF funding legislative oversight over these programs and (such as past expenditure and benefits achieved), systems . and (3) appropriate one-time funding in 2019-20 Appropriate One-Time Funding for Programs for these programs while the aforementioned Receiving IMF Support in 2019-20. Given 30 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET that it will take time for the judicial branch to the LCFF allotment is known as excess property complete the above report and for the Legislature tax . Because the amount of property tax revenue to consider the information as part of its General collected can change from year to year, the amount Fund budget priorities, we recommend that the of excess property tax also can change from year Legislature provide one-time General Fund support to year . in the budget year to the programs that would be Offset of General Fund Support for Trial shifted from the IMF to the General Fund under Courts. State law requires that any excess property our proposal . This would prevent any disruption tax revenues collected by COEs beyond their LCFF to currently supported IMF programs while the allotments be used to offset state General Fund Legislature evaluates them and considers any support of trial courts . The transfer occurs at the funding adjustments as part of its deliberations on direction of DOF and the State Controller’s Office the 2020-21 budget . the year after the taxes are collected . For example, excess property taxes collected in 2017-18 offset COUNTY OFFICE OF EDUCATION the state’s General Fund support of trial courts in OFFSET OF TRIAL COURT 2018-19 . GENERAL FUND SUPPORT Governor’s Proposal We recommend the Legislature adjust The Governor’s budget estimates that the the trial court offset in 2019-20 upward to amount of excess property tax revenue available in account for property tax growth in 2018-19. 2019-20 will not increase over the 2018-19 level of Our preliminary estimates indicate that that $63 million . the upward adjustment is $18 million, but LAO Assessment updated data will be available in the spring to further refine this estimate. This would provide Underestimate of Revenue Available for the Legislature with additional General Fund Offset. Our preliminary analysis of property tax resources above the level assumed in the growth projects higher levels of excess property tax Governor’s budget. revenues available to offset General Fund support of trial courts than assumed in the Governor’s Background budget . Specifically, we estimate that $81 million County Offices of Education (COEs). Each of in excess property tax revenues will be available in California’s 58 counties has a COE . COEs oversee 11 counties in 2018-19 . This is $18 million above the budgets and academic plans of school districts the Governor’s estimate . We estimate the annual within their jurisdictions, operate certain alternative excess tax revenue will continue to increase and schools, and provide various optional services to will exceed $100 million by 2020-21 . school districts . A primary source of funding for LAO Recommendation COEs is the Local Control Funding Formula (LCFF) . Each COE’s annual LCFF allotment is determined Adjust Offset to Reflect Availability of by formula . Additional General Fund Resources. We Some COEs Collect “Excess Property Tax” recommend the Legislature adjust the trial court Revenue. A COE’s annual LCFF allotment is offset in 2019-20 upward to account for property supported first with local property tax revenue, tax growth in 2018-19 . This would provide the with the remainder covered by state Proposition 98 Legislature with additional General Fund resources (1988) General Fund . Some COEs do not receive above the level assumed in the Governor’s budget . state support because they collect enough property Our preliminary estimates indicate that the offset tax revenue in a given year to cover their entire should be adjusted upward by $18 million, but note LCFF allotment . In virtually all of these cases, the that updated data will be available in the spring to COEs collect more in property tax revenue than further refine this estimate . We will provide updated their LCFF allotment . The amount collected above numbers at that time . www.lao.ca.gov 31 analysis full gutter 2019-20 BUDGET DEPARTMENT OF JUSTICE OVERVIEW offender registry, (3) the recovery of firearms from persons who are prohibited from owning them, Under the direction of the Attorney General, DOJ and (4) the establishment of new human trafficking provides legal services to state and local entities, investigative teams . brings lawsuits to enforce public rights, and carries out various law enforcement activities . The DOJ BUREAU OF FIREARMS WORKLOAD also collects criminal justice statistics from local authorities; manages the statewide criminal history The Governor’s 2019-20 budget proposes database; and conducts background checks a series of budget adjustments related to required for firearm purchase, licensing, and other the Bureau of Firearms (BOF), including the purposes . In addition, the department provides Armed and Prohibited Persons System (APPS) various services to local law enforcement agencies, investigation teams. While the proposal helps including providing forensic services to local law prevent the Dealer’s Record of Sale (DROS) enforcement agencies in jurisdictions without their Special Account from becoming insolvent and own crime laboratories . accommodate increased workload related As shown in Figure 10, the Governor’s budget to a backlog of APPS cases, BOF licensing proposes roughly $1 billion to support DOJ and administrative workload, and recent operations in 2019-20, an increase of $39 million, legislation, components of it appear unjustified, or 4 percent, over the revised amount for 2018-19 . do not fully address identified problems, and About half of the proposed spending supports result in unintended consequences. As such, the department’s Division of Legal Services, we recommend an alternative package of while the remainder supports the Division of adjustments that allocates the funding in a Law Enforcement and the California Justice different manner. We also recommend that the Information Systems Division . Of the total amount Legislature direct DOJ and the administration proposed for DOJ operations in 2019-20, nearly to report on potential solutions to address the one-third—$331 million—is from the General Fund . ongoing operational shortfalls facing the DROS This is an increase of $37 million, or 13 percent, Special Account and the Firearms Safety and from the estimated 2018-19 amount . This increase Enforcement (FS&E) Special Fund, as well as reflects various proposals to provide additional require DOJ to annually report on key metrics General Fund support, most notably for (1) the related to APPS investigation teams. state’s forensic laboratories, (2) the continued implementation of the state’s new tiered sex Figure 10 Total Operational Expenditures for the Department of Justice (Dollars in Millions) Change From 2018-19 2017-18 2018-19 2019-20 Actual Estimated Proposed Amount Percent Legal Services $437 $507 $517 $10 2.0% Law Enforcement 216 274 289 15 5.4 California Justice Information Services 188 214 228 14 6.4 Totals $841 $996 $1,034 $39 3.9% 32 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Background revenues is estimated to be deposited into the DROS Special Account in 2018-19 to support BOF Regulates and Enforces State Firearm about $24 million in expenditures . Similarly, about and Ammunition Laws. BOF within DOJ is $7 .7 million in revenue is estimated to be deposited primarily responsible for the regulation and into the FS&E Special Fund in 2018-19 to support enforcement of the state’s firearm and ammunition about $11 .3 million in expenditures . In order to laws . This includes conducting background checks address these shortfalls in the current year, each for individuals seeking to purchase firearms, fund will draw from its fund balance (or unspent licensing firearm and ammunition vendors, funds) that has accumulated in prior years . (When conducting vendor compliance investigations, the fund balance has been used up, the special ensuring lawful possession of firearms and fund will become insolvent .) The DROS Special ammunition, and administering various other Account has experienced operational shortfalls firearms and ammunition programs . BOF engages since 2012-13, while the FS&E Special Fund began in various activities related to these responsibilities . experiencing operational shortfalls in 2017-18 . For example, BOF has APPS investigation teams who are primarily responsible for investigating Governor’s Proposal the illegal purchase or possession of firearm The Governor’s 2019-20 budget proposes and ammunition, as well as seizing them from a series of budget adjustments related to BOF, individuals who are prohibited from owning or including APPS investigation teams . Collectively, possessing them . In 2018-19, BOF received these adjustments result in an increase of $36 .2 million from several special funds to support $16 .9 million in General Fund support and a its various activities . net $798,000 increase from the DROS Special BOF Generally Supported by Fee Revenue Account . According to the administration, the Since 2012-13. State law authorizes DOJ to various adjustments are intended to prevent the charge various fees related to firearms and DROS special account from becoming insolvent ammunition that are deposited into one of several in the budget year and accommodate increased state special funds to support BOF programs and workload related to a backlog of APPS cases, BOF activities . For example, an individual purchasing a licensing and administrative workload, and recent firearm currently pays fees totaling $25—a $19 fee legislation . The specific adjustments proposed in deposited into the DROS Special Account, a $5 fee the Governor’s budget include: into the FS&E Special Fund, and a $1 fee into the Firearm Safety Account . State law also authorizes • Funding Adjustments for APPS DOJ to administratively increase some of these Investigation Teams. The Governor’s fees to account for inflation as long as the fee does budget proposes to change the mix and level not exceed DOJ’s regulatory and enforcement of funding for APPS investigation teams . costs . (DOJ last administratively increased the Specifically, the budget proposes to allocate $19 fee deposited into the DROS Special Account $16 .9 million from the General Fund and in 2004 .) We note that of the $36 .2 million in eliminate existing DROS Special Account special funds provided to BOF in 2018-19 budget, funding of $5 .8 million . According to the nearly $12 million was for the support of the APPS administration, $5 .6 million of the proposed investigation teams . This includes $5 .8 million from General Fund support is intended to support the DROS Special Account and $5 .5 million from 26 new positions to allow APPS investigation the FS&E Special Fund . teams to address a backlog of cases and the DROS Special Account and FS&E Special remainder is to backfill the reduction from the Fund in Operational Shortfall. Currently, both DROS Special Account . Under the proposal, the DROS Special Account and the FS&E Special APPS investigation teams would continue to Fund are experiencing operational shortfalls as receive $5 .5 million from the FS&E Special the expenditures from these funds exceed their Fund—bringing total funding in 2019-20 to revenues . For example, about $20 .6 million in www.lao.ca.gov 33 analysis full gutter 2019-20 BUDGET $22 .4 million (increase of $11 .1 million from Uncertain Impact of Additional Funding for 2017-18) . APPs Investigations in Long Run. Since the early • Funding Adjustments for Other BOF 2000s, DOJ has requested additional resources Workload. The Governor’s budget proposes to decrease a backlog of APPS cases awaiting a $6 .9 million increase in DROS support investigation . For example, Chapter 2 of 2013 (declining to $6 .4 million in 2020-21 and (SB 140, Leno) appropriated $24 million from the annually thereafter) and 43 new positions to DROS Special Account to DOJ in order to address address increased licensing and administrative the APPS backlog . While significant progress has workload in BOF . However, the budget also been made, the backlog still remains . Specifically, includes an unallocated reduction in DROS as of January 2019, the department reports that Special Account support of $5 .5 million the backlog was at about 9,400 cases . related to other BOF workload . DOJ is currently projecting that the backlog may • Funding to Implement Recent Legislation. increase due to other new legislation or mandates The Governor’s budget also proposes a resulting in an increase in new APPS cases added $5 .2 million increase from the DROS Special annually . For example, beginning July 1, 2019, Account (declining to $2 .7 million in 2020-21 DOJ will need to confirm whether an individual and $1 .7 million in 2021-22 and annually seeking to purchase ammunition is authorized to thereafter) to implement four pieces of do so . In the process of doing so, it is likely that recently-enacted legislation . Nearly all of DOJ will identify additional cases requiring APPS this funding would support DOJ’s internal investigations . DOJ anticipates that this could then data center responsible for modifying and generate additional APPS workload such that the maintaining databases used by BOF . APPS backlog increases despite the additional resources . However, the actual magnitude of such a potential increase is uncertain . LAO Assessment If APPS workload does not increase as Special Funds Avoid Insolvency, but anticipated, it is possible that the proposed 26 new Operational Shortfalls Remain. Absent the positions would help DOJ nearly eliminate the administration’s proposals, it is likely that the DROS existing APPS backlog in several years . According Special Account would have become insolvent in to DOJ, it would then use these resources to take the budget year . This is because the fund would on investigations it currently leaves unaddressed have lacked sufficient resources to address (such as complex cases) or increase its other increased costs related to implementing new enforcement duties (such as increasing attendance legislation or increases in existing BOF workload . at gun shows) . While additional resources in either However, while the administration’s proposals help of these scenarios seem appropriate, the actual avoid this insolvency, they do not address the impact of these additional resources in the long run ongoing operational shortfalls in the DROS Special is uncertain . Account . Moreover, the administration’s proposals Impact of Reduction in DROS Special Fund do not address the ongoing operational shortfall Support for Other BOF Workload Unclear. As facing the FS&E Special Fund . discussed above, the Governor’s budget includes More Funding Provided to Support APPS a $5 .5 million reduction in DROS Special Account Investigation Teams Than Justified. As discussed funding support for BOF workload not related above, the administration’s budget proposals to APPS investigation teams . At the time of this provide a total of $22 .4 million to support the analysis, the administration and DOJ had not workload of APPS investigation teams . However, provided information on which BOF programs DOJ has only requested and provided sufficient would be reduced . As such, the impacts of the justification that $16 .9 million is needed on an proposed reduction is unclear . ongoing basis to support existing APPS workload as well as to continue addressing the backlog of cases . 34 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET DROS Special Fund Augmentations Generally • Funding Adjustments for Other BOF Seem Reasonable. We find that the request of Workload. We recommend the Legislature $12 .1 million from the DROS Special Account provide $12 .1 million to support BOF’s to support increases in existing BOF licensing increased licensing and administrative and administration workload and to support the workload ($6 .9 million) and the implementation implementation of new legislation generally seems of recent legislation ($5 .2 million) . In order reasonable based on the workload data and other to support most of these increased costs, information provided by the department . we recommend the Legislature appropriate the freed up $11 .3 million resulting from our LAO Recommendations above recommendation—$5 .8 million from the Adopt Alternative to Administration’s Budget DROS Special Account and $5 .5 million from Proposals. While the Governor’s proposal helps the F&SE Special Fund—to support this other prevent the DROS Special Account from becoming BOF workload . The remaining $798,000 would insolvent and accommodate increased workload be supported by an augmentation in funding related to a backlog of APPS cases, BOF licensing from the DROS Special Account . and administrative workload, and recent legislation, Similar to the Governor’s proposal, our components of it appear unjustified, do not alternative would result in an increase of fully address identified problems, and result in $16 .9 million in General Fund support and a net unintended consequences . In recognition of this, $798,000 increase from the DROS Special Account we recommend below an alternative package of Unlike the Governor’s proposal, however, our adjustments to Governor’s proposal . Our proposal alternative plan does not include an unallocated does not change the total amount of funding reduction to BOF . provided or fund sources it is provided from . Direct DOJ and Administration Report on However, it allocates the funding in a different Solutions to Address Operational Shortfalls. manner that, along with our other recommendations We recommend the Legislature direct DOJ and below, addresses the concerns we identified with the administration to submit a report no later the Governor’s plan . Additionally, our alternative than December 15, 2019 on potential solutions plan—similar to the Governor’s proposal—helps the to address the ongoing operational shortfalls DROS Special Account avoid insolvency . The key facing the DROS Special Account and the FS&E components of our alternative include: Special Fund . These potential solutions can • Funding Adjustments for APPS include changing business processes, one-time Investigation Teams. We recommend the investments to improve efficiency, increasing Legislature provide $16 .9 million from the firearm-related fees—such as directing DOJ to General Fund (declining to $16 million in administratively increase the DROS fee to account 2020-21 and ongoing) to support existing for inflation—and/or statutory or regulatory and increased APPS workload . We also changes . The Legislature can use this report to recommend approval of the 26 new positions determine what steps should be taken to ensure requested to continue addressing the backlog . that BOF receives sufficient funding from the This provides DOJ with the level of resources appropriate fund sources to address legislatively that there is workload justification for . We desired service levels . For example, BOF workload also recommend eliminating existing DROS has been completely supported by fee revenue Special Account support of $5 .8 million and deposited into its special funds since 2012-13 . The FS&E Special Fund support of $5 .5 million Legislature could decide to increase fee levels to for APPS investigation teams, which would maintain existing practices of fully covering BOF both be backfilled with the above General costs through fee revenue rather than providing Fund support . Under our alternative, APPS General Fund support . investigation teams would be fully funded from the General Fund . www.lao.ca.gov 35 analysis full gutter 2019-20 BUDGET Require APPS Reporting. We recommend DOJ is required to make some information about the Legislature approve budget trailer legislation them (such as their home addresses) publicly directing DOJ to report on key metrics it already available through the California Megan’s Law reports on (such as the number of APPS cases website . Certain sex offenders, however, are able addressed annually), given that the backlog of to apply for exclusions from the website . Sex APPS cases pending investigation is expected to offenders who are required to register generally remain for at least the next few years and could must do so for life . potentially increase . (Although existing state law New Tiered Sex Offender Registration System requires DOJ to submit annual reports to the Joint in 2021. Chapter 541 of 2017 (SB 384, Wiener Legislative Budget Committee on key metrics and Anderson) requires that the above sex offender related to the APPS backlog, the requirement is registration system be changed to a tiered system scheduled to end on March 1, 2019 .) This could beginning January 1, 2021 . Under Chapter 541, help the Legislature continue to conduct oversight individuals convicted of specified sex offenses over the reduction of the APPS backlog and of will generally be required to register for at least any additional funding provided to reduce the 5 years, 10 years, 20 years, or life depending on backlog . Additionally, we recommend that the various factors (such as whether they are adults reporting language specify that once the backlog or juveniles, their conviction, and assessed risk to is eliminated, DOJ should begin reporting on the reoffend) . Beginning July 1, 2021, registrants could new or expanded activities the APPS investigation petition to be removed from the registry under teams engage in . This could help the Legislature various circumstances, such as if they have been on determine the extent to which ongoing resource the registry for the minimum required time . Finally, levels should be adjusted in the future . Chapter 541 changes the criteria for offenders who are eligible to apply for exclusion from the California NEW TIERED SEX OFFENDER Megan’s Law website . DOJ currently estimates REGISTRATION SYSTEM that the total cost to implement these changes is around $67 million . The 2018-19 budget provided We recommend the Legislature approve the a one-time $10 million General Fund augmentation Governor’s proposal to provide $46 million in and 25 positions to DOJ for initial planning and additional General Fund support over three implementation costs for this project . years for DOJ to implement a new tiered sex DOJ estimates that there are currently 104,000 offender registry. However, in order to facilitate sex offender registrants that will need to be regular legislative oversight over the project, we assigned to the new tiered categories along with also recommend the Legislature adopt budget an average of 5,000 new registrants annually . trailer bill legislation directing the department Additionally, DOJ estimates that approximately to provide an annual written progress report on 2,610 registrants are no longer eligible for exclusion key metrics (such as changes to project costs or from the public website and will need to be notified deadlines for project milestones). accordingly . Background Governor’s Proposal Existing Sex Offender Registration System. The Governor’s budget proposes $46 million Currently, individuals convicted of certain sex from the General Fund over three years offenses are required to register with their local law ($17 .2 million in 2019-20, $15 .7 million in enforcement agency . These offenders generally 2020-21, and $13 .2 million in 2021-22) to modify must update their information with their local the existing sex offender registry system to law enforcement agency annually and inform law comply with requirements of Chapter 541 . As enforcement when they move . DOJ maintains a shown in Figure 11, DOJ is requesting a total of statewide database of registered sex offenders . 88 positions in 2019-20, 136 positions in 2020-21, Depending on the convictions of these offenders, and 86 positions in 2021-22—including both 36 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET the project, we also recommend Figure 11 the Legislature adopt budget trailer Summary of Approved or Requested Resources for legislation directing DOJ to provide New Tiered Sex Offender Registry an annual written progress report (Dollars in Millions) on key metrics to help monitor the development and implementation Supported Positions Funding of the new sex offender registration Fiscal Year (In Millions) Permanent Limited Term Total system . Specifically, at minimum, Approved we recommend the Legislature 2018-19 $10.0 23 2 25 direct DOJ to report on the tasks Requested completed, changes to projects 2019-20 $17.2 37 51 88 costs or deadlines for project 2020-21 15.7 37 99 136 milestones, challenges or delays 2021-22 13.2 38 48 86 that have emerged, and issues or risks that may result in project permanent and limited-term positions . According schedule or budget changes . This to DOJ, it anticipates requesting resources for after information would help the Legislature ensure that 2021-22 in the future . the project remains on schedule and on budget . Project Could Benefit From DISPOSITIONS AND CRIMINAL Regular Legislative Oversight HISTORY UPDATE WORKLOAD We find that the level of resources being requested by DOJ to meet the requirements We recommend the Legislature provide of Chapter 541 appear justified on a workload the requested $203,000 for DOJ to process basis . However, given the magnitude of DOJ’s additional criminal history record updates on estimated costs to implement the new sex offender a two-year, limited-term basis—rather than on registration system, we find that regular legislative an ongoing basis as proposed by the Governor. oversight of the department’s progress would help This would allow DOJ to track the total amount ensure that the resources provided are being used of workload generated by legislation enacted efficiently and that the department is on track to in 2018 and request additional resources as meet the 2021 implementation date . For example, needed in two years based on actual workload. regular oversight would allow the Legislature to Background identify any potential delays or challenges and inquire how DOJ plans to address them . The Criminal History Records. State law requires Legislature can then determine what action, if any, DOJ to maintain the state’s databases of criminal it may need to take to ensure the project remains history records . For each individual arrested, state on schedule and to limit cost increases . law requires law enforcement agencies, the state courts, and detention facilities to submit certain LAO Recommendations specified information to DOJs databases . Such We find that the Governor’s proposal to provide information includes the individual’s name, date of DOJ with $46 million in additional General Fund birth, and fingerprints, as well as the charges filed, support for use over three years to support the disposition of cases, sentence received, and date implementation of a new tiered sex offender of release . DOJ also serves as the state’s single registry appears justified on a workload basis point of contact for the exchange of criminal history and necessary to meet the statutory time frames records with the federal government . Finally, state enacted by the Legislature . Accordingly, we law authorizes DOJ to provide certain federal and recommend approval of the proposal . However, in state criminal history information to designated order to facilitate regular legislative oversight over entities (such as peace officers, courts, and county www.lao.ca.gov 37 analysis full gutter 2019-20 BUDGET child welfare agency personnel) and/or under Uncertain Ongoing Funding Needed specified circumstances (such as if the information is At this time, the workload associated with the four being used for licensing or employment purposes) . pieces of legislation enacted in 2018 appear to be Governor’s Proposal either limited-term in nature or uncertain given that it would depend on how certain individuals respond The Governor’s 2019-20 budget includes to the legislation . For example, the additional $203,000 from the General Fund (declining to workload resulting from resentences occurring in the $188,000 in 2020-21 and annually thereafter) to implementation of Chapter 1015 would likely not be support two positions to process an estimated ongoing in nature . This is because the resentencing increase in criminal history record updates related under the legislation only applies to those offenders to increased dispositions resulting from the who were convicted prior to its implementation . following four pieces of legislation enacted in 2018: We also note that such offenders have a strong incentive to seek resentencing in order to potentially • Chapter 523 of 2018 (AB 865, Levine). serve shorter sentences—thereby filing resentencing Chapter 523 authorizes members of the U .S requests that generate increased workload in the military sentenced for a felony conviction prior near-term . Additionally, the actual number of district to January 1, 2015 who may be suffering from attorneys that would recommend the recall and a certain condition (such as post-traumatic resentence of defendants under Chapter 1001 is stress disorder or substance abuse) to petition uncertain . This makes it difficult to estimate the the court for a recall of their sentences . number of cases that would be filed and adjudicated • Chapter 653 of 2018 (AB 2599, Holden). by the courts, and thus requiring DOJ to update its Chapter 653 requires that a detention facility criminal history records . provide arrestees, upon their request, with the necessary forms to apply to have their arrest LAO Recommendation sealed . It also requires the facility post a sign informing arrestees that individuals arrested, Provide Two-Year, Limited-Term Funding. but not convicted, may petition the court to In view of the above, we recommend that the have their arrest and related records sealed . Legislature approve the requested $203,000 for DOJ to process additional criminal history record updates • Chapter 1001 of 2018 (AB 2942, Ting). on a two-year, limited-term basis—rather than on Chapter 1001 authorizes a court to recall an ongoing basis as proposed by the Governor . and resentence a defendant upon the This would allow DOJ to track the total amount of recommendation of the district attorney of the workload generated by the four pieces of legislation county in which the defendant was sentenced . enacted in 2018 and request additional resources as • Chapter 1015 of 2018 (SB 1437, Skinner needed in two years based on actual workload . and Anderson). Chapter 1015 narrows the circumstances under which individuals can be NEW AND EXPANDED convicted of murder, including by changing the felony murder rule, which formerly CRIMES WORKLOAD allowed certain individuals who were not We recommend the Legislature reject the the actual killer to be charged with murder . Governor’s proposal to provide $145,000 Chapter 1015 also provides a process for (General Fund) for DOJ to update and publish certain individuals convicted of murder prior its statewide master code tables, as well as to to its implementation to file a petition with coordinate with criminal justice agencies on the the court to vacate their convictions and be use of these tables. The department has been resentenced on any remaining counts under unable to provide sufficient justification for the certain conditions . requested resources, as well as explain why the statewide lists could not be updated within existing resources. 38 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Background LAO Recommendation Statewide Master Code Tables. As discussed Reject Requested Funding. In view of in the previous section, state law requires DOJ the above concerns, we recommend that the to maintain the state’s databases of criminal Legislature reject the Governor’s proposal to history records . It also requires law enforcement provide $145,000 (General Fund) for DOJ to update agencies, the state courts, and detention facilities and publish its statewide master code tables, as to submit certain specified information to DOJ for well as to coordinate with criminal justice agencies each individual arrested . To assist these entities on the use of these tables . with their reporting requirements, DOJ prepares lists—knowns as statewide master code tables—of CALIFORNIA CONSUMER PRIVACY all crimes for which individuals can be arrested or ACT OF 2018 cited . DOJ routinely updates these tables to reflect changes in law . We recommend the Legislature authorize a $4.7 million loan—$1.8 million from the Governor’s Proposal General Fund and $2.9 million from the Unfair The Governor’s 2019-20 budget proposes Competition Law Fund—to the Consumer $145,000 from the General Fund (declining to Privacy Fund in 2019-20, rather than as a direct $136,000 in 2020-21 and annually thereafter) to appropriation from these two fund sources as support one new position for DOJ to update and proposed by the Governor. This loan would publish the statewide master code tables . These ensure that DOJ has sufficient resources to tables would be updated to reflect 25 bills enacted implement the California Consumer Privacy Act by the Legislature in 2018 that either create of 2018, as well as comply with legislative intent new criminal offenses or expand the parameters that costs be supported by the penalty revenues of existing criminal offenses . Additionally, the deposited into the Consumer Privacy Fund. requested position would coordinate with criminal Background justice agencies regarding the use of these tables and requirements for the submission of data . California Consumer Privacy Act of 2018. Beginning January 1, 2020, Chapter 55 of 2018 Lack of Justification for (AB 375, Chau and Hertzberg) and Chapter 735 of Requested Resources 2018 (SB 112, Dodd)—also known as the California Consumer Privacy Act of 2018—impose various At the time of this analysis, DOJ has been unable requirements related to the collection, use, to provide sufficient justification for the requested and protection of consumer data collected by resources, as well as explain why the statewide lists certain businesses (such as those with annual could not be updated within existing resources . gross revenues of more than $25 million) . These We recognize that the Legislature regularly enacts requirements include providing consumers with legislation that create new crimes or expand the the right to request that a business disclose parameters of existing crimes and, thus, require the categories and specific pieces of personal DOJ to update the statewide lists . However, we information collected about them and delete such find that the lists should generally need to be information, as well as direct a business not to sell updated only once a year and existing staff who such information . Additionally, the act tasks DOJ are currently doing this work should able to do it with (1) developing regulations related to these for the recently-enacted bills . It is also unclear how requirements, (2) providing guidance to businesses much additional work conducting outreach and on how to comply with these requirements, and coordinating with law enforcement agencies would (3) pursuing civil actions against businesses who require . fail to correct any alleged violations within 30 days . www.lao.ca.gov 39 analysis full gutter 2019-20 BUDGET Consumer Privacy Fund. The California Consumer Fund in 2019-20—$1 .8 million from the Consumer Privacy Act of 2018 created the Consumer General Fund and $2 .9 million from the UCL Fund— Privacy Fund to receive civil penalties assessed for rather than as a direct appropriation as proposed violations of the act . The act further specifies the by the Governor . This loan would ensure that DOJ intent that these penalty revenues fully offset costs has enough resources to begin implementation of incurred by the state courts and DOJ related to the California Consumer Privacy Act of 2018, as implementing and enforcing the act . Moreover, the well as comply with legislative intent that costs act prohibits the use of the revenue for any other be supported by the penalty revenues deposited purpose until after these costs are fully offset . into the Consumer Privacy Fund . We note that additional loans could be needed until sufficient Governor’s Proposal penalty revenues begin to be deposited into the The Governor’s budget for 2019-20 proposes Consumer Privacy Fund . $4 .7 million—$1 .8 million from the General Fund Additionally, this approach would help the and $2 .9 million from the Unfair Competition Law Legislature conduct oversight of the act’s (UCL) Fund—to support 23 positions for DOJ to implementation . This is because, to the extent implement the California Consumer Privacy Act of that insufficient penalty revenues are deposited 2018 . (The UCL Fund receives penalty revenues to support ongoing DOJ costs and/or to repay from civil actions initiated against entities that the loan, the Legislature could consider making violate the state’s consumer protections laws to changes to the California Consumer Privacy Act of gain an unfair competitive advantage .) This amount 2018 (such as increasing the amount of civil penalty would decline to $4 .5 million in 2020-21 and that can be pursued for violations) . annually thereafter—$1 .7 million General Fund and $2 .8 million UCL Fund . (This decline reflects the CALIFORNIA INTERNET expiration of one-time initial start-up costs for these CONSUMER PROTECTION AND positions .) NET NEUTRALITY ACT OF 2018 Fund Source Not Appropriate We recommend that the Legislature adopt We find that the level of resources being budget bill language specifying that DOJ could requested by DOJ to implement the California only spend the proposed $1.8 million to enforce Consumer Privacy Act of 2018 appear reasonable the California Internet Consumer Protection given the increased workload . However, we find and Net Neutrality Act of 2018 if all court that the proposal to use the General Fund and UCL prohibitions preventing its implementation or Fund to support the workload on an ongoing basis enforcement have expired. is not aligned with the act . This is because the act Background specifically created the Consumer Privacy Fund to fully offset DOJ’s costs to implement and enforce Federal Communications Commission (FCC). its provisions . We recognize, however, that DOJ will The FCC is an independent federal agency tasked incur some start-up costs—such as those related with the regulation of interstate and international to developing regulations or beginning to pursue communications by radio, television, wire, satellite, civil actions for violations of the act—prior to the and cable in the United States . In 2015, the FCC deposit of penalty revenues into the Consumer approved rules related to net neutrality—the Privacy Fund . As such, funding from other fund principle that Internet service providers treat all sources will be needed on a temporary basis to Internet data the same regardless of its source . support the department’s workload . These rules prohibited providers from (1) blocking lawful content or applications, (2) slowing down LAO Recommendation specific applications or services (known as In view of the above, we recommend that the “throttling”), and (3) accepting fees to directly or Legislature authorize a $4 .7 million loan to the indirectly favor some data traffic over others (known 40 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET as “paid prioritization”) . In 2017, the FCC reversed the multistate case against the FCC and U .S . or the these net neutrality rules . U .S . Supreme Court issues a final decision on the Chapter 976 of 2018 (SB 822, Wiener case—whichever is later . In exchange, California and De Leon). Chapter 976—known as the agreed to not enforce Chapter 976 until either California Internet Consumer Protection and Net (1) 30 days after the October 2018 stay expires Neutrality Act of 2018—establishes net neutrality if plaintiffs in the two cases against California do requirements in California . In particular, it prohibits not request a new stay within that time period Internet service providers that provide broadband or (2) 30 days after a judge makes a decision if Internet access service from (1) blocking lawful they request a new stay within that time period . content or applications, (2) throttling applications or We note that further stays on the enforcement of services, and (3) engaging in paid prioritization . It Chapter 976 could potentially be sought . also requires providers to publicly disclose certain Governor’s Proposal information to ensure that consumers are able to make informed choices regarding the use of their The Governor’s 2019-20 budget proposes services . $1 .8 million from UCL to support nine new Net Neutrality Litigation. Litigation is currently positions for DOJ to enforce Chapter 976 . This pending challenging the FCC’s 2017 decision to workload would include receiving complaints, reverse net neutrality rules as well as Chapter 976 . investigating potential violations, and prosecuting These cases include: cases . • Multistate and Stakeholder Suit Against Pending Litigation Could Prevent FCC and U.S. California, other states, Chapter 976 Enforcement and various stakeholders (such as Mozilla We find that requested resources for DOJ to Corporation) filed suit against the FCC and the implement and enforce Chapter 976 appear justified U .S . challenging the agency’s 2017 decision on workload basis . However, it is unclear whether to reverse net neutrality rules . This case is the October 2018 stay on Chapter 976 will expire currently pending in a federal court of appeals . in 2019-20 . Oral argument in the multistate case • U.S. Suit Against California. The U .S . against the FCC and U .S . is currently scheduled filed suit against California challenging the for February 2019 . As such, it is possible that the constitutionality of Chapter 976 . Specifically, stay could expire during the budget year . However, the U .S . argues that federal law—specifically it is also possible that the stay is in place beyond the FCC decision—preempts state law the budget year . This could happen if, for example, (Chapter 976) . This case is currently pending the Supreme Court takes time to issue a decision in a federal district court . or if subsequent stays are issued in the two cases • Industry Stakeholder Suit Against against California . Under such circumstances, California. The American Cable Association DOJ would not need the proposed resources to and other industry stakeholders filed implement Chapter 976 in 2019-20 and thus would suit against California challenging the not need the resources proposed by the Governor . constitutionality of Chapter 976 . Specifically, they argue that (1) federal law preempts LAO Recommendation Chapter 976 and (2) Chapter 976 regulates Adopt Budget Bill Language Limiting When commerce outside of California . This case is Funds Could Be Used. In view of the above, currently pending in a federal district court . we recommend that the Legislature modify the In October 2018, California entered into an Governor’s proposal by adopting budget bill agreement with the plaintiffs in the two suits filed language specifying that DOJ could only spend the against the state . Under the agreement, both proposed $1 .8 million to enforce Chapter 976 if all lawsuits would be stayed (or placed on hold) until court prohibitions preventing its implementation or the federal court of appeals issues its opinion on enforcement have expired . www.lao.ca.gov 41 analysis full gutter 2019-20 BUDGET LOCAL PUBLIC SAFETY INCREASED RESOURCES FOR from monies collected from certain criminal fines and fees levied by trial courts and has seen been PEACE OFFICER TRAINING eliminated . Currently, POST is partially funded The Governor’s budget proposes a from the State Penalty Fund (SPF), which also $34.9 million ongoing General Fund receives revenue criminal fines and fees . Due to a augmentation for the Commission on Peace significant decline in fine and fee revenue in recent Officer Standards and Training (POST). We years, funding for POST was reduced beginning recommend the Legislature ensure that any in 2009-10 . In recognition of this decline, General funding provided and the planned expenditure Fund support has been provided to POST on of such funding reflect its priorities. Additionally, a one-time basis in recent years . For example, to the extent that the Legislature approves $3 .2 million in POST costs were shifted to the additional funding for POST, we recommend General Fund in 2014-15 on a one-time basis . it adopt trailer bill language directing POST The revised 2018-19 budget includes a total of to report annually on specific outcome $75 million for POST . This includes $48 million from and performance measures that are tied to SPF, $25 million in one-time General Fund support, legislative expectations for the additional and $2 million in reimbursements . The General funding This would help the Legislature evaluate Fund amount includes (1) $15 million for use of the impact of any new funding provided and force and de-escalation training, (2) $5 million for make decisions on appropriate funding and crisis mental health training, and (3) $5 million to service levels in the future. provide competitive grants for innovative trainings or procedures that could reduce officer-involved Background shootings . POST Operates Various Programs. POST Governor’s Proposal is responsible for setting minimum selection and training standards for California law enforcement, The Governor’s budget proposes a total of developing and running law enforcement training $81 .4 million to support POST in 2019-20— programs, improving law enforcement management which is a 8 .6 percent increase above practices, and reimbursing local law enforcement the revised 2018-19 level . This includes a for training . In order to meet its responsibilities, proposed $34 .9 million ongoing General Fund the different divisions and bureaus within POST augmentation—$14 .9 million to restore POST’s operate various programs . Some of these program baseline funding to the 2013-14 level and include (1) developing and maintaining basic $20 million in additional funding above that level—a training programs (such as the Regular Basic 63 percent increase in ongoing funding for POST . Academy Course); (2) researching, developing, Figure 12 summarizes how POST plans and offering videos, simulator training, and other to use the proposed $34 .9 million General courses; (3) issuing professional certificates to Fund augmentation . As shown in the figure, recognize training or experience achievements; POST would use some of the funds to restore and (4) overseeing and managing law enforcement programs or services that had been previously training instructors and ensuring the quality of eliminated due to a decline in the amount of fine delivery . and fee revenue available to support POST . For Funding for POST. Prior to 2017-18, the example, POST proposes $1 million to restore primary fund source for POST had been the Peace the Quality Assurance Program and $8 million Officers’ Training Fund, which received revenue to reinstate “backfill” salary payments for certain 42 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET courses . (Backfill generally refers to providing law LAO Assessment enforcement agencies with funds for the cost of Governor’s Proposal Reflects One Approach using overtime to temporarily cover the shift of an to Funding POST . . . POST’s expenditure plan is officer who is attending training .) POST indicates one way to use the proposed ongoing funding . In that not all courses that were previously eligible for developing the plan, POST evaluated nearly all of backfill would automatically become reeligible, with its programs and identified those areas it believed priority for backfill reinstatement given to courses merited additional funding to maximize the number related to certain core skills . We note that POST of officers trained and the impact of training . For plans to pilot new types of reimbursements that example, POST plans to restore some trainings focus on providing training at the regional level . for supervisory law enforcement officers in order For example, POST is considering providing block to ensure that first-line supervisors are able to grants to provide trainings targeted at specific appropriately manage, supervise, and mentor the regions . POST hopes that this change would make officers reporting to them, as these supervisors are training more readily available to more officers in key to creating change and ensuring consistency . certain geographic areas (such as rural counties) We also note that POST is currently in the process and provide training in a more cost-effective of examining individual programs and courses to manner (such as by reducing reimbursable costs ensure consistent treatment (such as reimbursing associated with travel) . similar classes consistently) and to focus on areas of greatest statutory or regulatory importance . Figure 12 Planned Use of Proposed 2019-20 General Fund Augmentation for POST (In Millions) Purpose Amount POST Administration Replace and modernize technological equipment. $3.2 Support increased workload, improve existing databases, and develop new course materials. 1.5 Subtotal ($4.7) Training and Ensuring Quality of Training Update training curriculum for legacy courses. $1.5 Restore Quality Assurance Program—auditing consistency and delivery quality of POST-certified classes. 1.0 Restore the Instructor Development Institute. 1.0 Expand Supervisory Leadership Institute. 0.5 Develop four scenarios annually for Force Option Simulators. 0.5 Develop two additional online videos annually related to new legislative mandates. 0.2 Support various other training purposes. 1.0 Subtotal ($5.7) Local Assistance and Reimbursement Funding Reinstate “backfill” salary payments (costs of overtime to temporarily backfill the shift of a training attendee). $8.0 Increase number of reimbursable hours and reimbursement rate for regular basic academy courses. 7.5 Reinstate reimbursement plans for certain classes and implement new reimbursement plans. 7.0 Increase in stipends for increased “behind the wheel” emergency vehicle operations instruction. 2.0 Subtotal ($24.5) Total $34.9 POST = Commission on Peace Officer Standards and Training. www.lao.ca.gov 43 analysis full gutter 2019-20 BUDGET . . . But Legislature Could Provide Different LAO Recommendations Funding Level and Allocate Funds in Other Ensure Funding and Expenditure Plan Ways. However, POST’s expenditure plan is simply Reflects Legislative Priorities. We recommend one way additional funding for POST can be used . the Legislature ensure that any provided funding The Legislature will want to consider its overall as well as any expenditure plans for this funding expectations for POST in terms of desired service reflect its priorities . The Legislature can accomplish levels and outcomes, and ensure that POST has this in various ways ranging from specifying exactly sufficient resources to meet these expectations . how funding must be used—such as for use of As discussed above, POST received $20 million in force trainings—or for certain purposes—such as one-time General Fund support in the current year for regional trainings to more minor modifications to for the delivery of use of force, de-escalation, or the proposed expenditure plan . crisis mental health training . Under the proposed Require Reporting on Specific Outcome and expenditure plan, however, it is unclear how much Performance Measures. To the extent that the of the increased funding would generally be used Legislature approves additional funding for POST, for these specific purposes . This is concerning we recommend that it adopt trailer bill language because these training activities were identified directing POST to report annually on specific as legislative priorities in 2018-19 . The Legislature outcome and performance measures that are could decide that it would like funding to be spent tied to legislative expectations for the additional on specific issue areas—which would be consistent funding . For example, if the additional funding is with recent actions—or that certain programs or provided for training, POST should collect and services should be prioritized over others (such report information on the number of officers trained, as expanding the availability of online classes or how training was delivered, and the cost per videos) . training attendee, as well as the effect of specific Funding Should Be Tied to Specific Outcome trainings on officers’ job performance . To the extent and Performance Reporting. To the extent that that it takes time to begin collecting information on additional ongoing funding is provided to POST, certain performance measures, the Legislature can it is important that there be clear and specified direct POST to report on how it plans on acquiring outcome and performance measures in regards to or measuring that information in the near-term the uses of the funding . Such information would until the information becomes available for annual allow the Legislature to identify the intended reporting . Such reporting would help the Legislature expectations for the funding provided and monitor evaluate the impact of any new funding provided, the actual impacts to make sure they are aligned as well as make decisions on appropriate funding with the identified expectations . We note that and service levels in the future . under the administration’s plan, it is unknown what specific outcomes and performance is expected . CALIFORNIA VIOLENCE For example, it is unknown how many additional law enforcement are expected to participate in INTERVENTION AND PREVENTION training as a result of the proposed increase in PROGRAM reimbursement levels . The collection of outcome and performance measures would also help the Given that the California Violence Intervention state identify and compare where new funding had and Prevention (CalVIP) Program has been the greatest desired impact and what would be a legislative priority in recent years and that the most cost-effective investments going forward . it appears to generally direct funds toward This would be important in helping the Legislature evidence-based strategies, we recommend to determine whether additional funding is needed providing the proposed $9 million for the or if the allocation of existing funding should be program. However, in view of a pending modified . March 2020 report on the overall effectiveness of CalVIP, we find that it is premature to 44 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET approve the $9 million on an ongoing basis Governor’s Proposal as proposed by the Governor. As such, we The Governor’s budget for 2019-20 proposes to recommend approving it on a one-time basis. provide $9 million in ongoing funding to BSCC for This would allow BSCC to maintain existing the CalVIP program . service levels until the report is completed and the Legislature has had an opportunity to assess Upcoming Evaluation Should Inform whether it wants to modify the program based Future Program and Funding Needs on the report’s findings. As mentioned above, BSCC is expected to Background provide a report to the Legislature on the overall effectiveness of CalVIP in March 2020, which The CalVIP is a competitive grant program, would be during the Legislature’s deliberations on administered by BSCC, which provides funding the 2020-21 budget . This report should provide to cities and community-based organizations for information to inform decisions about whether the violence prevention work . Grant recipients may program should continue (either on a short-term or receive up to $500,000 over a two-year period ongoing basis), how much funding to provide the and must meet a funding match requirement . (We program, and whether changes to the program’s note that there is a $1 million set-aside for the city structure and requirements are needed . For of Los Angeles .) Preference is given to applicants example, if the report finds that CalVIP is highly who (1) are from areas that are disproportionately effective in reducing violence, the Legislature may affected by violence and (2) propose to fund decide to expand the program beyond its current activities that have been found to be effective in level of funding . Moreover, the report will provide reducing violence . For example, the city of San a full accounting of the types of activities and Bernardino received funding in 2018 to support its organizations that were funded in the first grantee implementation of Operation Ceasefire—a policing cohort . Reviewing this information could lead the program that intensively targets gun violence and Legislature to narrow or expand program eligibility was found to significantly reduce youth homicides to more effectively meet the program’s goals . in Boston . CalVIP applicants are required to develop clearly defined, measureable objectives LAO Recommendations and, if funded, are required to report to BSCC on their progress in achieving those objectives . Given that the CalVIP program has been The Legislature established CalVIP in 2017 and a legislative priority in recent years and that provided BSCC $9 .5 million in one-time General it appears to generally direct funds toward Fund support in the 2017-18 budget to fund evidence-based strategies, we recommend the program’s first cohort of grantees starting providing the proposed $9 million for the program in May 2018, which includes ten cities and ten in 2019-20 . However, in view of the pending community-based organizations . The state provided March 2020 report on the overall effectiveness of $9 million in one-time General Fund support in CalVIP, we find that it is premature to approve the 2018-19 to fund a second grantee cohort, which $9 million on an ongoing basis as proposed by includes eight cities and seven community-based the Governor . As such, we recommend approving organizations . For each cohort funded, BSCC is it on a one-time basis . This would allow BSCC required to submit a report to the Legislature on to maintain existing service levels until the report the overall effectiveness of CalVIP . BSCC currently is completed and the Legislature has had an anticipates producing its first report in March 2020 . opportunity to assess whether it wants to modify the program based on the report’s findings . www.lao.ca.gov 45 analysis full gutter 2019-20 BUDGET 46 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET SUMMARY OF RECOMMENDATIONS Issue Governor’s Proposal LAO Recommendation Cross Cutting Issue Deferred Maintenance $65 million (General Fund) on a one-time basis Require CDCR to report in budget hearings on what for deferred maintenance projects at the projects it intends to implement. Adopt reporting judicial branch and the California Department requirements to better enable legislative oversight of of Corrections and Rehabilitation (CDCR). (1) how CDCR and the judicial branch maintain their facilities on an ongoing basis and (2) what deferred maintenance projects are actually implemented with the proposed funding. CDCR Trends in the adult inmate and $16.4 million (primarily General Fund) for various Require CDCR to account for the estimated impact parolee populations adjustments associated with prison and parole of recent policy changes in its spring population caseload changes. projections and budget requests at the May Revision. Withhold recommendation on funding request pending receipt of this information. Require CDCR to report on the rationale for and estimated population impacts of future changes to inmate credit earning policies. Structured decision-making $4.9 million in 2019-20 ($2.1 million ongoing) Withhold action on proposed resources to framework for parole hearings from the General Fund and implementation of accommodate an increase in parole hearings pending a structured decision-making framework for receipt of key information about the proposed parole hearings to accommodate an increase structured decision-making framework. in the number of hearings. Compensation for attorneys $2.5 million (General Fund) to increase pay for Withhold action on proposal to increase attorney pay appointed by the Board of attorneys who represent inmates in parole pending receipt of key information about BPH’s Parole Hearings (BPH) hearings. proposed changes to attorney pay schedule. Reject proposal if such information is not provided by April 1, 2019. Inmate literacy $5.5 million in 2019-20 ($5.4 million ongoing) Approve proposed program as a three-year pilot. from the General Fund to implement a Require that inmate mentors who participate in the statewide inmate literacy mentorship program pilot complete criminal personality therapy only if they with a requirement that inmate mentors who have a moderate or high need for it. participate complete criminal personality therapy. Tattoo removal program $2.5 million (General Fund) to establish a Direct administration to report on how many inmates statewide tattoo removal program. would be served and how the program would be structured and evaluated. Withhold recommendation pending receipt of this information. Reject proposal if administration is not able to provide sufficient information by April 1, 2019. Division of Juvenile $2 million (General Fund) to establish a new Withhold action pending receipt of detailed justification Justice partnership with mentorship program with half-time volunteers for the proposed $2 million. Approve only $667,000, CaliforniaVolunteers who would serve as mentors to current and if the administration is unable to justify the proposed former wards with the goal of increasing $2 million. honorable discharges. Vehicle replacement schedule $24 million (General Fund) to establish a vehicle Direct CDCR to provide an estimate of the savings that replacement program. it indicates would be generated by implementing the proposal by April 1, 2019. Reduce CDCR’s budget by this amount and approve requested funds for vehicle replacement in a separate budget item. (Continued) www.lao.ca.gov 47 analysis full gutter 2019-20 BUDGET Issue Governor’s Proposal LAO Recommendation Judicial Branch Pretrial release grant program $75 million (General Fund) on a one-time basis Direct administration and Judicial Council to provide to administer a two-year grant program related a well-developed proposal by April 15, 2019 for the to pretrial release. Funding to be allocated by proposed program. Proposal should specify (1) the judicial branch to eight to ten courts for the primary goals of the proposed program, (2) the implementation, operation, or evaluation of specific programs or activities that would be funded, pretrial decision-making programs or efforts. (3) how funding would be allocated, and (4) how funded programs or activities would be evaluated. Withhold recommendation pending receipt of this information. Reject proposal to the extent this information is not provided. Improvement and Modernization $13.3 million in 2019-20 ($9.5 million ongoing) Deposit IMF revenues into the General Fund and Fund (IMF) from the General Fund to support the trial eliminate the IMF. Direct judicial branch to report court Phoenix financial procurement, and on each program currently receiving IMF funding. payroll system and the Litigation Management Appropriate one-time funding for these programs Program in order to offset $8.4 million in while assessment is being completed. existing IMF support for these programs and to support $4.9 million in increased costs. County Office of Education offset Estimates that the amount of excess property Adjust trial court offset in 2019-20 upward to account for of trial court General Fund tax revenue available to offset General Fund property tax growth in 2018-19. Preliminary estimates support support for trial courts will not increase above indicate an $18 million adjustment, but updated data the 2018-19 level of $63 million. will be available in the spring to further refine the estimate. Department of Justice (DOJ) Bureau of Firearms (BOF) $16.9 million (General Fund) and a net $798,000 Approve an alternative package of adjustments that workload increase from the Dealers’ Record of Sale allocates the funding in a different manner that (DROS) Special Account in 2019-20 that result would also prevent the DROS Special Account from from various budget adjustments intended becoming insolvent and accommodate projected to prevent the DROS Special Account from BOF workload, but addresses concerns identified becoming insolvent and accommodate with the Governor’s proposal. Require DOJ and projected BOF workload. administration to report on potential solutions to address the ongoing operational shortfalls facing the DROS Special Account and the Firearms Safety and Enforcement Special Fund. New tiered sex offender $46 million (General Fund) over three years to Approve proposal, but adopt budget trailer bill registration system implement new tiered sex offender registry. legislation requiring an annual written progress report on key metrics (such as changes to project costs or deadlines for project milestones). Dispositions and criminal history $203,000 in 2019-20 ($188,000 ongoing) Provide funding on a two-year, limited-term basis to update workload from the General Fund to process additional allow for the tracking of the total amount of workload criminal history record updates related to generated. Additional resources could be requested the implementation of four pieces of recently as needed in two years based on actual workload enacted legislation. data. New and expanded crimes $145,000 in 2019-20 ($136,000 ongoing) from Reject proposal due to a lack of sufficient justification workload the General Fund for DOJ to update and for why the statewide lists could not be updated within publish its statewide master code tables as existing resources. well as to coordinate with criminal justice agencies on the use of these tables. (Continued) 48 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET Issue Governor’s Proposal LAO Recommendation California Consumer Privacy Act $1.8 million ($1.7 million ongoing) from the Authorize a $4.7 million loan—$1.8 million (General of 2018 General Fund and $2.9 million ($2.8 million Fund) and $2.9 million (UCL Fund)—to the ongoing) from the Unfair Competition Law Consumer Privacy Fund in 2019-20 to ensure DOJ (UCL) Fund in 2019-20 to implement the has sufficient resources to implement the act, as California Consumer Privacy Act of 2018. well as comply with legislative intent that such costs be supported by penalty revenues in the Consumer Privacy Fund. California Internet Consumer $1.8 million (UCL Fund) to implement the Approve proposal, but adopt budget bill language Protection and Net Neutrality California Internet Consumer Protection and specifying resources could only be used to enforce Act of 2018 Net Neutrality Act of 2018. the act if all court prohibitions preventing its implementation or enforcement have expired. Local Public Safety Increased resources for peace $34.9 million (General Fund) for the Commission Ensure any funding provided and the planned officer training on Peace Officer Standards and Training expenditure of such funding reflects legislative (POST) to address increased workload, priorities. Adopt trailer bill language directing POST to restore certain previously eliminated programs report annually on specific outcome and performance or services, and expand or increase certain measures that are tied to legislative expectations for programs or services. any additional funding provided. California Violence Intervention $9 million (General Fund) for the Board of State Provide funding on a one-time basis to maintain existing and Prevention Program and Community Corrections to provide grants service levels and allow the Legislature to consider to support local violence prevention efforts. the results of a pending March 2020 report on the overall effectiveness of the program. www.lao.ca.gov 49 analysis full gutter 2019-20 BUDGET 50 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2019-20 BUDGET www.lao.ca.gov 51 analysis full gutter 2019-20 BUDGET Contact Information Drew Soderborg Managing Principal Analyst, 916-319-8346 Drew.Soderborg@lao.ca.gov Criminal Justice Anita Lee Judicial Branch 916-319-8321 Anita.Lee@lao.ca.gov Department of Justice Commission on Peace Officer Standards and Training Caitlin O’Neil Prisons, Board of Parole Hearings 916-319-8351 Caitlin.O’Neil@lao.ca.gov Board of State and Community Corrections Luke Koushmaro Rehabilitation 916-319-8355 Luke.Koushmaro@lao.ca.gov Juvenile Justice 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. 52 LEGISLATIVE ANALYST’S OFFICE