The 2023-24 Budget: The California Department of Corrections and Rehabilitation

2023-24 BUDGET The 2023-24 Budget: The California Department of Corrections and Rehabilitation GABRIEL PETEK | LEGISLATIVE ANALYST | FEBRUARY 2023 SUMMARY In this brief, we provide an overview of the total amount of funding in the Governor’s proposed 2023-24 budget for the California Department of Corrections and Rehabilitation (CDCR), as well as assess and make recommendations on several specific budget proposals. Prison Capacity Reduction Proposals. The Governor proposes reductions to CDCR’s baseline funding to reflect plans to deactivate two full prisons and six yards at various prisons. Based on our review, it is not clear how CDCR weighted the various factors in selecting prisons for deactivation—making it difficult for the Legislature to determine if it agrees with the department’s selections. In addition, the department has not fully justified the 15,000 empty prison beds that it proposes to continue operating in 2023-24 and has no plan to make further capacity reductions despite the number of empty beds being projected to reach nearly 20,000 by 2027. Without a capacity reduction plan, the state is at risk of incurring significant unnecessary costs. We recommend the Legislature take steps to gather key information from the administration to develop capacity reduction targets to inform current and future budget decisions, such as deactivating additional prisons. Audio-Video Surveillance Systems (AVSS). The Governor proposes $87.7 million General Fund (decreasing to $14.7 million annually beginning in 2026-27) to (1) install and operate AVSS at ten prisons and (2) ongoing equipment replacement costs for all proposed and previously authorized AVSS and body-worn camera systems beginning in 2026-27. While AVSS can have benefits, the proposal has a significant budget-year cost and would drive ongoing General Fund costs. Given that the state could be in a position to deactivate around five more prisons by 2027, there is a risk that any of the ten prisons proposed for AVSS installation would be deactivated shortly after the installation. Accordingly, we recommend that the Legislature reject the $87.7 million proposed in 2023-24 to install and maintain AVSS at ten prisons. Integrated Substance Use Disorder Treatment Program (ISUDTP). The Governor proposes a net decrease of $28.6 million in 2022-23 and $51 million in 2023-24 for ISUDTP. These changes are the net effect of (1) various population-driven adjustments based on existing methodologies and (2) a proposed increase in funding for toxicology testing based on a newly proposed methodology. We have several concerns with the budgeting methodologies for specific ISUDTP-related resources. Given that the department indicates it will update the proposed funding for ISUDTP at the May Revision, we recommend that the Legislature withhold action and direct the department to make specific changes to the budgeting methodologies in order to better tie the level of resources requested to the department’s actual workload. Division of Juvenile Justice (DJJ) Closure. To reflect the realignment of DJJ youth to counties and the closure of the division in 2023-24, the Governor proposes to reduce DJJ’s budget to about $3 million, as well as increase CDCR’s non-DJJ budget by $22.8 million annually. These funds would support ongoing workload related to the closure and allow the Pine Grove Youth Conservation Camp to contract to accept youth from the counties. We find that portions of the requested resources are likely unnecessary and recommend reducing them. In addition, the proposed Pine Grove contracts are inconsistent with realignment because the state would be responsible for at least 93 percent of the cost of the camp, resulting in the state effectively double paying counties that choose to send realigned youth to it. Accordingly, we recommend charging a fee that minimizes the state cost for Pine Grove. www.lao.ca.gov 1 2023-24 BUDGET OVERVIEW Roles and Responsibilities. CDCR is Governor’s Proposed Budget. The Governor’s responsible for the incarceration of certain adults January budget proposes a total of about convicted of felonies, including the provision $14.5 billion to operate CDCR in 2023-24, of rehabilitation programs, vocational training, mostly from the General Fund. This amount education, and health care services. As of reflects a decrease of $454 million (about January 18, 2023, CDCR was responsible for 3 percent) from the revised 2022-23 level. (These incarcerating about 95,600 people. Most of these amounts do not reflect anticipated increases people are housed in the state’s 32 prisons and in employee compensation costs in 2023-24 34 conservation camps. The department also because they are accounted for elsewhere in the supervises and treats about 38,600 adults on budget.) The proposed budget would provide parole and is responsible for the apprehension of CDCR with a total of about 62,400 positions in those who commit parole violations. In addition, 2023-24, a decrease of about 2,400 (4 percent) about 390 youths are housed in facilities that are from the revised 2022-23 level. This brief provides currently operated by CDCR’s Division of Juvenile our analysis of several of the Governor’s major Justice, which includes three facilities and one proposals related to CDCR. conservation camp. TRENDS IN THE STATE PRISON AND PAROLE POPULATIONS Figure 1 Background As shown in Figure 1, the average State Prison and Parole Populations daily prison population is projected Projected to Decrease to be 93,400 in 2023-24, a decrease of about 2,800 people (3 percent) 140,000 from the estimated current-year level. The average daily parole population is Prison 120,000 projected to be 41,300 in 2023-24, a Parole decrease of 2,300 people (5 percent) 100,000 from the estimated current-year level. The projected decrease in the prison 80,000 population is primarily due to the estimated impact of various sentencing changes enacted in recent years. 60,000 The projected decrease in the parole population is primarily due to recent 40,000 policy changes that have reduced the length of time people spend on parole 20,000 by allowing them to be discharged earlier than otherwise. 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 (Estimated) (Projected) 2 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Governor’s Proposal of six prisons, (2) lower total prison population, and (3) lower portion of that population receiving Net Reductions in Current- and Budget-Year treatment through ISUDTP. This decrease in Population Funding. The Governor’s budget costs is partially offset by projected increases for 2023-24 proposes, largely from the General in pharmaceutical costs and reimbursements Fund, a net decrease of $112 million in the current to local governments for costs they incurred in year and a net decrease of $259 million in the connection with state prisons, such as by providing budget year related to projected changes in the coroner services. overall prison and parole populations and various subpopulations (such as those housed in reentry Budget Adjustments Will Be Updated in May. facilities and people on parole who have convictions As a part of the May Revision, the administration will for sex offenses). The current-year net decrease in update these budget requests based on updated costs is primarily due to both a lower total prison population projections. population and a lower portion of that population Recommendation receiving treatment through ISUDTP relative to what was assumed in the 2022-23 Budget Act. (For more Withhold Recommendation Until May on ISUDTP, please see the “Integrated Substance Revision. We withhold recommendation on the Use Disorder Treatment Program” section of this administration’s adult population funding request brief.) This decrease in costs is partially offset by a until the May Revision. We will continue to monitor projected increase in pharmaceutical costs. CDCR’s populations and make recommendations based on the administration’s revised population The budget-year net decrease in expenditures is projections and budget adjustments included in primarily due to a (1) reduction in custody staffing the May Revision. resulting from the planned deactivation of portions PRISON CAPACITY REDUCTION PROPOSALS BACKGROUND Prisons Differ in Their Ability to Accommodate Needs of Incarcerated State Currently Operating 32 Population. Prisons are typically composed of State-Owned Prisons and 1 Leased multiple facilities (often referred to as “yards”) where Prison. As of January 18, 2023, CDCR was people live in housing units, recreate, and access responsible for incarcerating a total of about certain services (such as dental care). CDCR 95,600 people—91,300 men, 3,900 women, and typically clusters people with similar needs (such 400 nonbinary people. Most of these people—about the amount of security they require) in the same 91,000—are housed in 1 of 32 prisons owned yard. Accordingly, prisons differ in their ability to and operated by the state. This includes 29 men’s meet specific needs based on the types of yards prisons; 2 women’s prisons; and 1 prison that they are composed of. Some of the key needs that houses both men and women in separate facilities, CDCR staff consider in matching each person with which is Folsom State Prison (FOL) in Represa. a specific prison and yard include: (People who are transgender, nonbinary, or intersex are generally required to be housed in a men’s or • Security. CDCR categorizes most of its men’s women’s facility based on their preference.) yards into a range of security levels. (Women’s The state also typically houses up to about yards are not classified into different security 2,400 men in a prison—the California City levels as they generally have similar levels of Correctional Facility (CAC)—leased from a private security.) People housed in higher-security company, but operated by the state. The remaining yards live in cells, while people housed people are housed in various specialized facilities in lower-security yards generally live in outside of prisons, such as conservation camps and open dormitories. community reentry facilities. www.lao.ca.gov 3 2023-24 BUDGET • Health Care Treatment. Health care needs Many State-Owned Prisons Have Significant can affect which prisons people are housed in. Infrastructure Needs. As of January 2023, CDCR For example, people with higher medical needs identified 43 deferred maintenance or capital are typically placed at prisons designated outlay projects across 23 prisons at an estimated as Intermediate Health Care institutions. total cost of $1.7 billion that are expected to be This generally means that they are closer to needed over the next ten years. The majority of community hospitals to facilitate access to these projects are focused on issues related to specialty care. In addition, people receiving safety (such as replacement of fire suppression mental health care services are not housed systems) and critical infrastructure (such as at certain prisons located in desert regions of kitchen renovations). None of the projects are the state as they are more likely to be taking intended to add capacity. The estimate does not heat-sensitive medications. Health care needs include (1) projects expected to cost less than can also affect the specific yard within a prison $5 million and (2) a comprehensive assessment that people are assigned to. For example, of prison infrastructure needs related to health people receiving the highest level of outpatient care or rehabilitation. As such, it is likely that the mental health care—referred to as the total cost of infrastructure projects that will be Enhanced Outpatient Program—are generally needed at prisons over the next ten years could housed together in dedicated yards. These exceed $1.7 billion. (For more information on prison yards generally include housing units with infrastructure, please see our February 2020 report medication distribution rooms that allow nurses The 2020-21 Budget: Effectively Managing State to prepare and distribute medications inside the Prison Infrastructure.) housing unit to improve medication compliance. State-Owned Prisons Subject to In contrast, other people are typically expected Court-Ordered Population Limit. State-owned to go to a centralized medication dispensary to and operated prisons are subject to a federal receive their medications. court order related to prison overcrowding that • Other Needs. Various other factors can affect limits the total number of people they can house to where people are housed. For example, nine 137.5 percent of their collective design capacity. prisons have restrictions to mitigate the impact Design capacity generally refers to the number of Valley Fever—an infection caused by a fungus of beds CDCR would operate if it housed only in the soil that enters people’s lungs when one person per cell and did not use bunk beds in inhaled. Accordingly, people who have certain dormitories. Currently, this means that the state medical conditions that put them at higher risk is prohibited from housing more than a total of of getting very sick or dying from Valley Fever 112,697 people in state-owned prisons. It also are not housed at these prisons. In addition, means that when prisons or yards are deactivated, certain prisons do not have the necessary this population limit is reduced by 137.5 percent physical features to accommodate people of the design capacity of the prison or yard that in wheelchairs. was deactivated. Prison Population Decline Allowing for Some Prisons Fill Relatively Unique Roles. Capacity Reductions. As shown in Figure 2, Some prisons fill relatively unique roles, which can the prison population has declined significantly go beyond meeting the needs of the incarcerated in recent years and is expected to remain low population. For example, Sierra Conservation through June 2027. In 2021, CDCR completed Center in Jamestown serves as the primary hub for a multiyear drawdown of people housed in providing training and placing people in California’s contractor-operated prisons made possible by conservation camps. (Conservation camps are the declining prison population. In addition, the facilities typically located off prison grounds that administration deactivated the Deuel Vocational house eligible people who contribute to state wildfire Institution (DVI) in Tracy, as well as low-security mitigation while serving their prison term.) In addition, yards at the California Correctional Institution in since 1947, all license plates issued by California have Tehachapi and Correctional Training Facility in been produced by people housed at FOL. 4 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Soledad in September 2021. CDCR Figure 2 estimates that these deactivations resulted in ongoing General Fund Prison Population Projected to Decline Through 2027 savings totaling about $190 million. As of June 30 Each Year Deactivation also allowed the state to avoid funding infrastructure 140,000 repairs that would otherwise have been needed to continue operating 120,000 these facilities. For example, with the deactivation of DVI, the state 100,000 was able to avoid a water-treatment 80,000 project—projected in 2018 to cost $32 million—that would have been 60,000 necessary to comply with drinking water standards. Current law 40,000 requires the California Correctional Center (CCC) in Susanville to be 20,000 deactivated by June 30, 2023. As of January 2023, all the people who 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 were housed at CCC have already Actual Projected been relocated to other prisons. GOVERNOR’S CDCR also announced plans to deactivate six PROPOSAL individual yards at various prisons in 2023. Figure 3 lists the specific yards that would be closed. Deactivate Two Full Prisons and Six Yards at The department indicates that it chose to deactivate Various Prisons. On December 6, 2022, CDCR yards at six different prisons—rather than one announced plans to deactivate CAC by March 2024 whole prison—because doing so (1) provides the and Chuckawalla Valley State Prison (CVSP) in department with long-term operational flexibility Blythe by March 2025. CDCR indicates that it to meet the changing needs of the incarcerated selected CAC and CVSP for deactivation based on population, (2) likely results in less disruption Penal Code Section (PC) 2067, which requires the to staff and incarcerated people, and (3) helps department to accommodate projected population address staffing shortages. declines by reducing capacity in a manner that maximizes long-term savings, leverages long-term investments, and maintains sufficient flexibility Figure 3 to comply with the federal court order related Six Yards Planned for to prison overcrowding. In determining how to Deactivation in 2023 reduce capacity, PC 2067 requires CDCR to consider certain factors, including operational • Folsom Women’s Facility at Folsom State Prison in Represa cost, workforce impacts, and subpopulation and gender-specific housing needs. In addition, the • Facility C at Pelican Bay State Prison in Crescent City administration indicates it is proposing to deactivate • West Facility at California Men’s Colony in San Luis Obispo CAC given that the term of the lease for the facility • Facility A at California Rehabilitation Center in Norco is nearing its end and the capacity provided by • Facility D at California Institution for Men in Chino the facility is no longer needed to comply with the • Facility D at California Correctional Institution in Tehachapi federal court order related to prison overcrowding. www.lao.ca.gov 5 2023-24 BUDGET Adjust CDCR Funding to Account for Planned source of celled housing, (2) does not appear to fill Deactivations. To reflect the planned deactivations, any unique systemwide roles, (3) is not designated as the Governor’s budget reflects a reduction in 2023-24 an Intermediate Health Care institution, and (4) is one of about $280 million (largely from the General Fund) of the desert institutions that does not house people and 1,602 positions (increasing to $420 million and receiving mental health services due to the interaction 2,301 positions annually beginning in 2024-25). with heat sensitive medications. On the other hand, if The ongoing reductions consist of: the state prioritizes operational cost savings, it might select a different prison. For example, despite housing • $132 million and 777 positions associated with the a fairly similar population, the per capita operational deactivation of CCC. expenditures of the California Rehabilitation Center • $33 million and 166 positions (increasing to in Norco were $68,250 in 2019-20 compared to $136 million and 647 positions by 2024-25) $58,101 at CVSP. Not knowing how CDCR weighted associated with the deactivation of CAC. the different factors that went into its decision makes it • $114 million and 659 positions (increasing to difficult for the Legislature to evaluate whether it agrees $150 million and 877 positions by 2024-25) from with the department’s selections. the six yard deactivations. Number of Empty Prison Beds in We note that the budget maintains about $50 million Operation Projected to Grow to Nearly and 250 positions in base funding for various purposes, such as to support staff associated with 20,000 by 2027 conservation camps and a limited staff at CCC to As discussed above, the Governor’s proposals provide minimal maintenance and security services at would leave about 15,000 empty beds in the near the prison—a practice referred to as “warm shutdown.” term. As shown in Figure 4, the projected long-term The administration plans to submit revised savings decline in the prison population suggests that, after the estimates for CCC, CAC, and the six yard deactivations proposed deactivations are completed, the state could by the May Revision. have nearly 20,000 empty prison beds—comprising Continue Operating Nearly 15,000 Empty Beds. about 20 percent of the state’s total prison capacity. The department indicates that, while it intends to This means that the state could be in a position to continue monitoring the issue, it is not planning further deactivate around five additional prisons by 2027, while capacity reductions at this time because (1) there is still remaining roughly 2,500 people below the federal a need to maintain flexibility within the system, such court-ordered population limit. as having adequate quarantine space to continue Operation of Empty Beds managing COVID-19 within prisons, and (2) population projections are fairly uncertain in out-years. Accordingly, Has Not Been Fully Justified the department plans to continue to operate nearly As discussed above, the state prisons are expected 15,000 empty beds in 2023-24. to have about 15,000 empty beds in the near term, growing to 20,000 by 2027. However, CDCR indicates ASSESSMENT that it is not planning further capacity reductions at this time because (1) there is a need to maintain flexibility Unclear How CDCR Weighted Factors in within the system (such as having adequate quarantine Selecting Prisons for Deactivation space to continue managing COVID-19 within prisons) While CDCR indicates that it used the factors and (2) population projections are fairly uncertain in outlined in PC 2067 to inform its selection of prisons out-years. However, CDCR has not provided any data for deactivation, it is not clear how the department or analysis showing what number of beds is necessary weighted these different factors. Consideration of the for quarantine space. In addition, while there is always same factors weighted in different ways could result some uncertainty in population projections, the in different prisons being selected for deactivation. magnitude of empty beds projected is so large that it For example, if the state prioritizes operational flexibility seems reasonable to assume that actual population for CDCR, CVSP could be a strong candidate for trends will allow for some amount of capacity reduction. deactivation because it (1) does not provide a significant 6 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET population declines—regardless Figure 4 of whether prison capacity is reduced. However, there are many Governor’s Proposals Leave Nearly other types of costs—such as 20,000 Empty Beds in Operation by 2027 most staffing costs—that are only As of June 30 Each Year saved when capacity is reduced. Specifically, when a whole prison 120,000 is deactivated, the state can save Empty Beds Occupied Beds several tens of thousands of dollars 100,000 per capita annually in addition to the population-driven savings. 80,000 Per capita savings associated with yard deactivations are 60,000 generally somewhat less. This is because, while individual yard 40,000 deactivations do allow staffing levels to be reduced, prisons 20,000 have many centralized staffing costs—such as for administration 2022 2023 2024 2025 2026 2027 and perimeter security—that must (Actual) Projected be maintained regardless of the number of yards in operation. As discussed above, after the State Lacks Prison planned deactivations, the state Capacity Reduction Plan is projected to have enough excess capacity to allow for the deactivation of around five additional Absent data and analysis demonstrating a prisons. Deactivation of five prisons could generate compelling need to permanently maintain roughly around $1 billion in annual ongoing operational 15,000 empty beds in the near term and 20,000 by cost savings. We note, however, that deactivating 2027, the state will continue to have a substantial five prisons—or an equivalent amount of capacity amount of excess capacity. Accordingly, it is reduction through a combination of prison and yard reasonable for the state to start planning to reduce deactivations—could take a significant amount of this excess capacity. While CDCR indicates that advanced planning. For example, before the state it will continue monitoring population trends and can deactivate a facility, it might need to relocate capacity needs, it does not have a prison capacity a certain key function to another prison or make reduction plan. Specifically, the department has not plans to mitigate the loss of that function. Without identified the amount of empty beds it requires or a capacity reduction plan, the state risks delaying how it would reduce beds in excess of this amount. deactivations—and the resulting operational As we discuss below, without a capacity reduction savings—or spending hundreds of millions of plan, the state is at risk of incurring unnecessary dollars annually to indefinitely operate empty beds prison operational and infrastructure costs. that have not been fully justified. Unnecessary Prison Operational Costs. As Unnecessary Prison Infrastructure Costs. the prison population declines, the state is able to As discussed above, state prisons have significant spend less in certain types of costs—such as food infrastructure repair needs—many of which must and clothing—that are directly tied to the number be addressed for health and safety reasons. of people that need to be housed in state prisons. Without a capacity reduction plan, it is difficult Specifically, the state saves about $15,000 per for the state to avoid funding projects at facilities year each time one fewer person needs to be that may be deactivated shortly thereafter. housed in a prison. These savings accrue as the www.lao.ca.gov 7 2023-24 BUDGET For example, as discussed in the “Audio-Video CVSP, and the six yards for deactivation. To the Surveillance Systems” section of this brief, CDCR extent the Legislature disagrees with how the had purchased equipment for and was close to department weighted factors, it could direct beginning installation of an audio-video surveillance CDCR to deactivate different prisons and/or yards. system at CVSP when the prison was announced Depending on the prisons or yards the Legislature for deactivation. In addition, CDCR completed ultimately decides to close, it may need to make construction of a new $31 million health care corresponding budget adjustments relative to the facility at CCC in July 2021—about a year and a Governor’s proposal. half before all incarcerated people were relocated Develop Near-Term Capacity Reduction to other prisons. Funding infrastructure projects at Target to Guide 2023-24 Budget Decisions prisons that are deactivated shortly thereafter is not and Additional Deactivations. Given the risks cost-effective. Moreover, it can mean that health associated with the state’s current lack of a and safety issues—at other prisons that the state capacity reduction plan, we recommend that the does ultimately continue to operate—are addressed Legislature develop a near-term capacity reduction later than otherwise. Advanced planning is target for the amount of capacity to be reduced particularly critical given that infrastructure projects in 2023-24 through additional yard deactivations. are costly and can take several years to complete. In order to help guide the development of this Unnecessary Staff Training Costs. CDCR’s target, we recommend that the Legislature take the staffing needs are affected by various factors, following steps: including the number of facilities being operated. • Direct CDCR to Report Data and Analysis Correctional officer staffing needs are particularly Showing Number of Empty Beds Needed important to plan for, given that before these in 2023-24. As discussed above, the state staff can be assigned to a prison they must prison system currently has and is projected to first complete a 13-week correctional officer continue to have a significant number of empty training academy that is paid for by the state. beds. We recommend that the Legislature The Governor’s 2023-24 budget maintains direct CDCR to report in spring budget $140 million General Fund for CDCR to continue hearings any available data and analysis operating the academy and delivering other justifying the number of empty beds that are training to peace officers. Without a capacity needed in the budget year. To the extent that reduction plan, the state risks producing more complete data or analysis will not be available correctional officers than needed from a workload in time to inform spring budget hearings, the standpoint. This would not be a cost-effective use administration should report on the steps and of training resources. time line necessary to complete it. • Determine Near-Term Capacity Reduction RECOMMENDATIONS Target. Based on the data and analysis Withhold Action on Budget Adjustments reported by the department, we recommend Associated With Deactivations. Given that CDCR that the Legislature determine a near-term intends to submit revised budget adjustments capacity reduction target. To the extent associated with CCC, CAC, and the six yard that there is significant uncertainty or gaps deactivations by the May Revision, we recommend in the data or analysis provided by the the Legislature withhold action on these proposals. department, this could remain a relatively We will provide recommendations on the revised conservative target. proposals when they are available. • Direct CDCR to Deactivate Additional Yards Direct CDCR to Report on How Criteria for in 2023-24 to Meet Near-Term Capacity Deactivation Decisions Were Prioritized. We Reduction Target. Because full prison recommend that the Legislature direct CDCR deactivations can require significant advanced to report in spring budget hearings on how it planning, we recommend that the Legislature weighted the criteria that it used to identify CAC, direct CDCR to deactivate additional yards in 8 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET the budget year in order to meet the near-term • Determine Long-Term Capacity Reduction capacity reduction target. By deactivating Target. With the report described above, yards, the state will be able to begin achieving the Legislature will be in a better position near-term operational savings while it finishes to determine an appropriate number of developing a long-term plan—discussed empty beds to operate in the long term. below—to deactivate full prisons. Deactivating Based on this, we recommend that the these yards does not preclude the state from Legislature determine a long-term capacity reactivating them in the future as necessary. reduction target. We note that the Legislature would need to • Direct CDCR to Report on Major make corresponding budget adjustments Implications of Deactivating Each relative to the Governor’s proposal to reflect Prison and Costs to Address Them. these additional yard deactivations and We recommend that the Legislature direct achieve General Fund savings. CDCR to submit a report by January 10, 2024 that provides—for each prison or for a subset Direct CDCR to Provide Information to of prisons identified by the Legislature— Guide Future Budget Decisions. To guide future an inventory of any major implications of budget decisions and help the state avoid ongoing deactivation and a description of the options unnecessary spending, it is important to identify for and cost to mitigate those implications. an appropriate long-term capacity reduction For example, a major implication of target, specific prisons to be deactivated, and deactivating FOL would be that the state any planning activities—such as relocating key would have to find an alternative means of infrastructure—that must occur before deactivation producing license plates. Accordingly, the can occur. To guide this process, we recommend report should briefly describe this implication, that the Legislature: and discuss options and costs of mitigating it, • Direct CDCR to Report on Long-Term such as operating the factory with civil service Empty Bed Need. We recommend that staff or relocating it to another prison. With the Legislature direct CDCR to submit a this information, the Legislature would be able report by January 10, 2024 that identifies to weigh the costs and benefits of selecting a long-term empty bed needs and provides key particular prison for deactivation. In addition, information needed to plan for future prison once it selects a prison for deactivation, deactivations. Specifically, the report should the Legislature would be able to plan for include thorough data and analysis supporting any necessary actions to mitigate negative an estimate of the number of empty beds that implications of its deactivation—such as the state will need to maintain in the long term. relocating a key function. In conducting this analysis, the department • Achieve Long-Term Capacity Reduction should consider options—aside from Target Through Prison Deactivation. maintaining empty beds—for how to manage After establishing a long-term capacity unexpected increases in the population. The reduction target, the Legislature would be able options considered should include, but not to estimate the number of prisons that can be limited to, establishing agreements with be deactivated over the next several years. sheriffs to delay transfers from jail to prison, Using information reported by CDCR on the reducing prison terms through credits under implications of deactivating each prison, the the department’s existing authority, and the Legislature could make decisions about which possibility of quickly reactivating yards or implications it is comfortable accepting prisons as necessary. and/or paying to mitigate. Moreover, given that some mitigation strategies (such as relocating www.lao.ca.gov 9 2023-24 BUDGET critical infrastructure) could take time, having maximize the total number of whole prison this information will allow the state to begin deactivations achieved. This is because, planning for future prison deactivations. as discussed above, deactivation of whole In determining how many and which prisons prisons is generally more cost-effective than to close, we recommend that the Legislature similarly sized capacity reductions achieved consider reactivating yards as necessary to through yard deactivations. AUDIO-VIDEO SURVEILLANCE SYSTEMS Background in 2026-27) and 19 positions to (1) install and operate AVSS at the ten remaining prisons not AVSS Recently Installed at Various Prisons currently planned for deactivation where AVSS has to Address Misconduct. Over the past several not been authorized and (2) fund ongoing licensing, years, federal courts and the Office of the software, and equipment replacement costs for Inspector General, which provides external all proposed and previously authorized AVSS and oversight of CDCR, have raised concerns about body-worn camera systems beginning in 2026-27. officer misconduct toward people in prison. For example, in fall 2016, a court monitoring team Proposal to Be Revised to Reflect Recently documented numerous allegations of officer Announced Deactivations. As discussed misconduct, including physical abuse, denial earlier in this brief, CDCR recently announced of food, verbal abuse, tampering with mail and plans to deactivate CVSP, CAC, and yards property, inappropriate response to suicide at six state-owned prisons. At the time this attempts or ideation, and retaliation for reporting announcement was made, CDCR had already misconduct. CDCR has taken various actions in purchased—but not yet installed—AVSS equipment response to these concerns, including installing for CVSP. CDCR indicates that it will be able to fixed camera AVSS and body-worn cameras install this equipment at other prisons. Accordingly, on officers at various prisons. According to the the department plans to submit a revised proposal department, these cameras are also used to deter by the May Revision reflecting this and any other and aid in investigations of other incidents, such changes specifically resulting from the planned as assaults, riots, and contraband trafficking facility deactivations. involving people in prison. In total, the state has Assessment provided funding to CDCR for the installation of AVSS Can Have Benefits, but Results in AVSS at 22 prisons and body-worn cameras at Additional General Fund Cost Pressures. Given 10 prisons. As of November 2022, AVSS has been that AVSS appears to be a useful investigation installed at nine prisons and body-worn cameras tool, we find that it is reasonable to install AVSS have been deployed at nine prisons. Currently, at prisons that the state intends to operate in the there are 11 state-owned prisons that have not long term. However, the proposal has a significant been funded to receive AVSS. We note that one of budget-year cost and would drive General Fund these prisons, CCC, is planned to be deactivated by costs on an ongoing basis. This is notable, given June 30, 2023. the budget problem facing the state. Specifically, Governor’s Proposal the Governor’s budget proposes various budget Install AVSS at Ten Prisons and Establish solutions to address the estimated budget Ongoing Replacement Budget. The Governor’s problem for 2023-24. However, our estimates budget proposes $87.7 million General Fund suggest the budget problem is likely to be larger (decreasing to $7.5 million in 2024-25 and 2025-26 in May. Moreover, even under Governor’s budget and increasing to $14.7 million annually beginning assumptions, the proposed solutions also are 10 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET insufficient to keep the state budget balanced in Recommendation future years, with projected out-year deficits in the Reject Portion of Funding Tied to Expansion $4 billion to $9 billion range. of AVSS at Ten Prisons. Given the budget Not Cost-Effective to Implement AVSS at problem facing the state and the risk of installing Prisons That Could Be Deactivated. As we AVSS at prisons that are deactivated shortly discussed earlier in this brief, the state is expected thereafter, we find that it is not prudent to expand to have significant excess prison capacity. AVSS to new prisons at this time. Accordingly, we Specifically, we estimate that the state could be in a recommend that the Legislature reject the portion position to deactivate around five additional prisons of the proposal—$87.7 million and 19 positions by 2027. However, the administration has not in 2023-24—to install and maintain AVSS at identified specific prisons for future deactivation. ten prisons. When there is greater clarity as to As such, under the Governor’s proposal, there is a which additional prisons will be deactivated, the risk that any of the ten prisons proposed for AVSS administration could submit a request for resources installation would be deactivated shortly after the to install AVSS at additional prisons. We note that installation—thereby the benefits of AVSS at these our earlier recommendation in this brief to gather prisons could barely be realized. key information from the administration related to prison capacity reduction would help guide the identification and prioritization of which specific prisons to deactivate. FREE VOICE CALLS FOR PEOPLE IN PRISON Background numbers from being called. When the contract was first initiated, the state did not pay the company Various Ways for People in Prison to as the company receives payments from users of Communicate With Friends and Family. the communications services. The current six-year In addition to in-person visiting and writing letters, contract, which began in 2021, provides each there are various ways that people in prison can person in prison with 15 minutes of voice calling maintain contact with friends and family through every two weeks before any charges are levied. electronic communication. These include voice Under the contract, charges are levied for all calls, video calls, and electronic messages. electronic messages. Voice calls can be made from standard, hardwired telephones located at all prisons and portable Charges for Time Beyond 15 Minutes tablet devices that are currently being distributed Previously Paid by Friends and Family. Any to people in prison. According to CDCR, everyone time above 15 minutes is charged at a rate of in prison will receive a tablet by June 2023. 2.5 cents per minute for domestic calls and 7 cents The department regulates the use of telephones per minute for international calls, plus applicable and tablets among the prison population, such as surcharges and taxes. Historically, these charges the times of day when calls can be made. were paid by those receiving the calls from people in prison, such as their friends and family. However, Communications Contract Provides 15 as discussed below, the state has recently begun Minutes of Voice Calling at No Charge. paying these charges. CDCR contracts with a company to provide communications services to the prison population. Between July 2021 and December 2022, As a part of this contract, the company operates State Paid for Additional 60 Minutes. The the telephones and tablets, which include certain 2021-22 Budget Act provided $12 million General security features, such as enabling correctional Fund to pay for an additional 60 minutes of staff to monitor calls and restrict certain phone voice calling every two weeks, as well as 60 free www.lao.ca.gov 11 2023-24 BUDGET electronic messages per month, for each person actual minute usage data. The remaining funding in prison. This allowed each person to use a total would be used to support two new IT positions to of 75 minutes of voice calling every two weeks address growing workload driven primarily by the before their friends or family incurred any charges. introduction of tablets and increased demand for Ultimately, about $2.2 million of the funding was communication services generated by Chapter 827. spent in 2021-22, with the remaining $9.8 million Beginning in July 2023, the department would reappropriated in the 2022-23 Budget Act for the no longer pay for 60 electronic messages per same purposes. CDCR estimates that for the first month. As a result, users would pay charges for part of 2022—specifically between July 2022 and these messages at the contract rate of five cents December 2022—state costs for voice calling and per message. electronic messages totaled about $1.5 million. Provisional Language to Allow the Accordingly, the department estimates that Department of Finance (DOF) to Adjust 2023-24 about $8.3 million (of the $12 million originally Funding Amount. The Governor proposes appropriated in 2021-22) remained available as of provisional language that would allow DOF to January 1, 2023. augment or reduce the 2023-24 appropriation Beginning January 2023, State Paying for based on actual or estimated expenditure data. All Additional Minutes. Chapter 827 of 2022 The department indicates that it believes this (SB 1008, Becker) specifies that CDCR shall authority is needed given the uncertainty about how provide accessible, functional voice calls free many calling minutes will be used. of charge. On January 1, 2023, CDCR began Annual Budgeted Amount Modified Through implementing this requirement by paying all charges a Technical Adjustment. The Governor intends accrued for voice calls. Though CDCR does not to adjust annual baseline funding for calling directly limit the number of minutes people can use, charges as needed through a technical adjustment. it does continue to restrict when calls can be made Accordingly, these adjustments would not be for operational reasons. CDCR intends to continue presented to the Legislature through budget providing 60 free electronic messages per month change proposals. through June 2023. Assessment Governor’s Proposal Proposed Funding Appears Reasonable, $5.6 Million General Fund to Pay Charges but Is Based on Limited Data Currently From January 2023 Through June 2023. CDCR Available. Based on calling usage data through estimates that charges for voice calling and the September 2022 and analysis provided by 60 electronic messages from January 2023 through CDCR, the funding amounts proposed to pay for June 2023, will total $13.9 million. The Governor calling charges in 2022-23 and 2023-24 appear requests $5.6 million General Fund—on top of reasonable. We also think that the proposed two the $8.3 million identified above—to pay for these IT positions appear reasonable, given the growing charges over the six-month period. The department communications-related workload. However, by the indicates that it might adjust the amount it is May Revision, the department will have additional requesting at the May Revision based on actual months of calling usage data. Most notably, it will minute usage data. have calling usage data from after January 1, 2023 $30.7 Million General Fund to Pay Charges when Chapter 827 went into effect. Accordingly, it and Provide Information Technology (IT) is possible that the estimated funding levels could Support Annually. The Governor proposes change by the May Revision. $30.7 million ongoing General Fund and two Provisional Language Is Unnecessary and positions to support voice calling. Of this amount, Limits Oversight. We agree that the annual funding $30.4 million is expected to pay for voice calling amount needed for calling charges is subject to charges. The department indicates that it might uncertainty, particularly in the near term given that adjust this amount at the May Revision based on Chapter 827 only recently went into effect and 12 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET tablets are still being distributed. However, the affected by discretionary decisions made by the annual budget act already includes the ability to department, such as a decision to renegotiate the augment funding for departments for unexpected communications services contract. As such, the costs. Specifically, Item 9840-001-0001 includes Legislature will want to ensure it has the opportunity $40 million to augment departments’ General to review the above changes and decisions. Fund budgets upon approval of the Director of Population Budget Adjustments Provide an DOF no sooner than 30 days after notification to Alternative Approach. In contrast to the technical the Joint Legislative Budget Committee (JLBC). adjustment process, CDCR currently uses a This budget item is maintained in the Governor’s population budget adjustment process to propose proposed budget for 2023-24. In the event that annual adjustments to various aspects of CDCR’s this $40 million is used for other contingencies and budget that are tied to the size of the prison is unavailable to support higher than anticipated population or its subpopulations. Through this calling charges, we note that Item 9840-001-0001 process, the administration submits documentation outlines a process through which the administration showing the methodology and data sources used to can request a supplemental appropriation. support the proposed adjustments, which creates Accordingly, we find that the proposed provisional transparency on the proposed adjustments. language is unnecessary. Recommendations We also note that the proposed provisional language would severely limit legislative oversight, Withhold Action on Proposed Funding and as it does not require legislative notification or Require Updated Data. While the proposed approval. In contrast, augmentations through Item funding levels appear reasonable given currently 9840-001-0001 require notification to JLBC and available data, the department indicates it supplemental appropriations require approval by might adjust the proposed funding levels at the the Legislature. May Revision based on updated data. Accordingly, we recommend the Legislature withhold action on Annual Technical Adjustment Process Lacks Transparency. We agree that the level of the proposal until that time. In addition, to ensure that the Legislature is well-positioned to base its funding budgeted for calling charges may warrant decision on recent data that was gathered after adjustment from year to year to reflect more Chapter 827 went into effect, we also recommend current usage estimates. However, we find that directing the department to submit updated calling the proposed technical adjustment process lacks usage data at the May Revision. transparency. This is because, under the typical technical adjustment process, the administration Reject Proposed Provisional Language. does not submit documentation supporting the Given that the proposed provisional language proposed budget adjustment. Accordingly, it would is unnecessary and limits legislative oversight, be difficult—without seeking additional information we recommend that the Legislature reject it. from the department—for the Legislature to As noted above, the budget already includes Item identify what discretionary decisions were made, 9840-001-0001 to account for unanticipated whether the funding adjustment is justified, and to funding needs. conduct oversight of prison voice communications Direct CDCR to Annually Adjust Funding more broadly. Level Through Population Budget Adjustment Going forward, it would be important for the Process. We recommend that the Legislature Legislature to ensure that the level of funding direct the department to adjust the level of funding provided annually is aligned to actual costs, which for calling charges through the department’s annual could be impacted by various factors, including population budget adjustment process. Through changes in (1) the size of the prison population, this process, the department would submit to the (2) CDCR policies concerning when calls can be Legislature its proposed budget adjustment along made, and (3) per-minute costs as well as taxes with the methodology used to calculate it. and surcharges. Moreover, these factors could be www.lao.ca.gov 13 2023-24 BUDGET For example, the department could develop a the budget year. This transparency would enable methodology that uses actual calling data from the Legislature to better assess if the proposed the prior year, the current per-minute costs as adjustments are warranted and to provide well as taxes and surcharges, and projections of ongoing oversight of prison voice communication the size of the prison population for the coming more broadly. year to estimate the amount of funding needed for MIGRATION OF BUSINESS INFORMATION SYSTEM TO UPDATED SOFTWARE PLATFORM Background Alternatively, it is possible that third-party vendors could provide adequate temporary support for CDCR Business Information System (BIS) the system. In addition, we note that information Supported by SAP Software Platform. CDCR published by SAP suggests that CDCR may be able uses a system of interconnected IT applications— to contract with SAP to provide temporary extended called BIS—to track and report data on various maintenance past 2027. aspects of its operations. The type of software platform that the department uses to support BIS is State Centralizing Financial IT Systems Within enterprise resource planning (ERP) software and is Financial Information System for California made by the company SAP. (ERP is an industry term (FI$Cal). Since 2005, the state has been in the for software that integrates processes to help a process of replacing its aging and decentralized business better manage its activities. For instance, financial IT systems with one new system—FI$Cal, in the case of a financial system, an ERP will which integrates state government processes for enable the process of approving a purchase order accounting, budgeting, cash management, and to also create an accounting transaction that procurement. In addition to eliminating the need encumbers the funds in one step.) When CDCR for over 2,500 department-specific applications, began using SAP’s ERP software in 2011, BIS FI$Cal is intended to automate manual processes, primarily included financial applications, which improve tracking of statewide expenditures, provided functions like accounting, budgeting, provide greater transparency into the state’s and procurement. Over time, CDCR has added financial data and management, and standardize nonfinancial applications to BIS that provide various state financial practices. FI$Cal is managed by the other functions, such as those related to employee Department of FI$Cal. health and safety, armory tracking, and allegations CDCR Required to Transition to FI$Cal by of staff misconduct. CDCR currently maintains BIS 2032. Currently, all but 20 state entities have with annual funding of $24 million General Fund transitioned to FI$Cal. Ten of these entities, such as and 61 positions. the University of California, have received statutory SAP Ending Mainstream Support for authority to use systems other than FI$Cal for Current ERP Software Beginning in 2027. their financial management on an ongoing basis. In 2027, SAP is scheduled to stop providing The other ten state entities, including CDCR, are mainstream support for the version of its ERP currently considered deferred from FI$Cal. This currently used by CDCR, which is called ERP means that they are currently allowed to continue Central Component (ECC) 6.0. This is because the using financial IT systems other than FI$Cal but company is offering a new ERP software called are statutorily required to transition to FI$Cal to the S/4HANA. The loss of support services could extent possible by July 1, 2032. cause security vulnerabilities or loss of functionality in BIS. To prevent this from happening, the department could migrate BIS to S/4HANA by 2027. 14 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Analysis to Inform CDCR Transition Expected Key Information Needed to Determine Costs to Be Completed by End of 2023. As a part of the of Delaying Migration. In order to determine planning process for transitioning a department to whether it is cost-effective to delay the migration FI$Cal, the Department of FI$Cal works with the to S/4HANA, the Legislature would need to know transitioning department to conduct a “fit-gap” the cost and potential trade-offs of contracting with analysis. The purpose of a fit-gap analysis is to SAP or a third-party vendor to temporarily provide identify the transitioning department’s existing extended maintenance for the ECC 6.0 software business functions, processes, and data systems currently supporting BIS. However, it is unclear to used for financial management; any gaps in the what extent CDCR evaluated such options given ability of FI$Cal to meet those needs; and potential that it did not provide information on the costs and options for addressing such gaps. The Department potential trade-offs associated with them. Without of FI$Cal indicates that it engaged with CDCR this key information, it is difficult for the Legislature to conduct a fit-gap analysis in 2020-21 but the to determine whether to approve the department’s analysis was only partially completed by CDCR. proposal or delay the transition to S/4HANA. FI$Cal currently expects the analysis to be Moreover, we note that if the administration has not completed by the end of 2023 and indicates that made efforts to assess options to delay migration to the specific time line to transition CDCR to FI$Cal S/4HANA, it raises concerns that the administration can be evaluated at that time. is not putting the necessary effort into moving CDCR onto FI$Cal. Governor’s Proposal Recommendation $8.1 Million in 2023-24 to Begin Migrating BIS to S/4HANA. The Governor proposes limited-term Withhold Action and Direct CDCR to Report General Fund support of $8.1 million in 2023-24, Key Information. We recommend that the $9.3 million in 2024-25, and $7.8 million in 2025-26 Legislature direct CDCR to report in spring budget based on CDCR’s intention to migrate BIS from hearings on (1) the annual costs to contract with ECC 6.0 to S/4HANA over three years. Specifically, SAP to continue providing maintenance, (2) the the department intends to initiate migration in estimated annual costs to provide maintenance 2023-24 in order to complete it before 2027 when through a third-party vendor, and (3) any potential mainstream SAP support for ECC 6.0 is scheduled challenges associated with these options and to end. CDCR indicates that, pending the results of strategies to mitigate them. This information would the fit-gap analysis, it would subsequently transition allow the Legislature to evaluate whether the the financial applications to FI$Cal. benefits of delaying migration are worth the costs. Until it receives this information, we recommend Assessment the Legislature withhold action on the Governor’s Initiating Migration to S/4HANA in 2023-24 proposal. We will review information provided by Appears Premature. Under the Governor’s the department and make recommendations to the proposal, the financial applications within BIS would Legislature after the information is available. be migrated to S/4HANA and—pending the results of the fit-gap analysis—subsequently transitioned to FI$Cal at some point before 2032. In other words, the state would eventually be paying for both the migration to S/4HANA and the transition to FI$Cal, which does not seem cost-effective. However, as discussed above, the state may be able to contract with SAP or a third-party vendor to provide extended maintenance for the ECC 6.0 software supporting BIS. This would allow CDCR to delay migration to S/4HANA. Accordingly, it appears premature to begin migration at this time. www.lao.ca.gov 15 2023-24 BUDGET THE JOINT COMMISSION ACCREDITATION Background The federal court has outlined a specific process for delegating care at each prison back to the state. CDCR’s Provision of Mental Health Care Specifically, each prison must first be inspected Under Federal Court Oversight. In 1995, a by the Office of the Inspector General (OIG) to federal court ruled in the case now referred to as determine whether the institution is delivering an Coleman v. Newsom that CDCR was not providing adequate level of care. The Receiver then uses constitutionally adequate mental health care to the the results of the OIG inspection—regardless of prison population. As a result, the court appointed whether the OIG declared the prison’s provision a Special Master to monitor and report on CDCR’s of care adequate or inadequate—along with other progress towards providing an adequate level of health care indicators to determine whether the mental health care. The Special Master continues level of care is sufficient to be delegated back to monitor and issue recommendations to CDCR to CDCR. To date, 20 out of the 33 state-owned for the care delivered to the prison population and operated prisons have been delegated back participating in an in-prison mental health program, to the state. However, the Plata v. Newsom court which is about one-third of the total population. and the OIG continue to monitor and audit the The Special Master also appoints experts to review delegated institutions. mental health delivery processes and compliance with court-ordered recommendations, such as Health Care Accreditations Can Provide experts who regularly perform in-person audits of External Oversight. Health care accreditations CDCR’s suicide prevention practices. The federal can provide insight into whether an organization court in the case will decide when care has providing care is achieving a minimum standard of improved to the point where oversight through the care. The accreditation process uses an external, Special Master can end. However, the court has not independent body that applies standardized provided the state with specific benchmarks that criteria to ensure that organizations provide care must be met for court oversight to end. consistent with the criteria. This is typically done by preparing an organization for the review process CDCR’s Provision of Medical Care Under and then performing an unannounced audit of the Federal Court Management. In 2006, after organization’s procedures based on standardized finding the state failed to provide a constitutional criteria. Once accredited, an organization must level of medical care to people in prison, a federal continue to meet the quality standards every audit court in the case now referred to as Plata v. cycle to maintain its accreditation. Various agencies Newsom appointed a Receiver to take control provide different types of accreditations designed over the direct management and operation of for the specific health care service being delivered, the state’s prison medical care delivery system such as medical and mental health accreditations. from CDCR. The Receiver’s mandate is to bring The Joint Commission (TJC) is one agency that the department’s medical care program into accredits about 80 percent of U.S. hospitals for compliance with federal constitutional standards. various types of health care services. For example, Unlike a Special Master, a Receiver has executive TJC issues accreditations in Behavioral Health and authority in hiring and firing medical staff, entering Human Services (covering mental health care), contracts with community providers, and acquiring Ambulatory Health Care (focusing on emergency and disposing of property. medical care), and Nursing Care Center. CDCR In order for the state to regain control of the indicates that four prisons obtained at least one delivery of prison medical care, the state must TJC accreditation and two prisons are preparing demonstrate that it can provide a sustainable for Behavioral Health and Human Services TJC constitutional level of care at every prison. accreditation in 2023-24 using existing resources. 16 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Governor’s Proposal Accreditations Are a Laudable Goal, but Exiting Court Oversight Should Be Prioritized. Resources for Accreditations. The Governor’s Attaining accreditations for CDCR’s prison health budget proposes $3.2 million General Fund and care system could have merit in the future, but 15 positions in 2023-24 (increasing annually to achieving compliance with current court standards $6.1 million and 38 positions in 2027-28 and in order to exit court oversight should be a higher ongoing) to obtain and maintain TJC accreditations priority. This is because the state has not yet in Behavioral Health and Human Services, been able to fully demonstrate to the courts that Ambulatory Health Care, and Nursing Care Center adequate care is being provided at all prisons. for all state-owned and operated prisons over a We acknowledge accreditations could indirectly five-year period. The resources would support help in achieving court standards, such as if accreditation fees, training of staff, and ongoing achieving accreditations requires improvements positions dedicated to preparing prisons for the that the courts have ordered. However, the state accreditation audits. is already aware that it needs to make these Assessment improvements. Moreover, to the extent that Accreditations Not Required to End Court achieving the accreditations requires improvements Oversight. Neither the Coleman v. Newsom or that are not ordered by the courts, it would Plata v. Newsom courts have ordered the state demand resources and effort that should instead to obtain accreditations as a way to demonstrate be prioritized for court compliance. Dedicating care has improved to a desired level or as a resources and staff effort to address specific court condition of exiting court oversight. Nor have orders or concerns should remain the priority the courts selected a specific accreditation as until court compliance is achieved. We note that the most appropriate for the delivery of care in accreditation would be of greater value when the prisons. Instead, each court establishes its own state has control over medical care as a way to requirements to determine whether care has help ensure the state maintains adequate care after improved to the point where court oversight is no federal court oversight ends. longer necessary. As such, it is unclear whether Recommendation achieving accreditations will address specific Reject Proposal. In view of the above, we recommendations or remedial plans ordered recommend the Legislature reject the Governor’s by the courts. proposal to provide CDCR resources to obtain and Proposed Accreditation Could Unnecessarily maintain TJC accreditations at all state-owned and Duplicate Oversight of Health Care. We also find operated prisons. We find that it is more appropriate that the Governor’s proposal to dedicate resources for the state to prioritize its resources and efforts to obtain TJC accreditations at each prison could for ending court oversight rather than pursuing unnecessarily duplicate oversight already provided these accreditations. We note this proposal could by the courts, court-appointed experts, and OIG be considered in the future if achieving these in the Plata v Newsom and Coleman v. Newsom accreditations is ordered by the courts or to ensure cases. The state, through the OIG and state the quality of care is maintained once the state exits payments to court appointed experts, already court oversight. The General Fund resources that dedicates resources for oversight of prison health are “freed up” under our recommendation would be care. It is likely that TJC would find the same available for other legislative priorities. deficiencies already captured by existing oversight entities, thereby not providing much additional value regarding the delivery of health care in California’s prisons. www.lao.ca.gov 17 2023-24 BUDGET INTEGRATED SUBSTANCE USE DISORDER TREATMENT PROGRAM Background helps change negative patterns of behavior) with medications designed to reduce the likelihood of ISUDTP Treats Substance Use Disorder people relapsing while undergoing SUD treatment. (SUD) as a Medical Need. ISUDTP, initiated as Prior to 2019-20, CDCR had operated MAT pilot part of the 2019-20 budget, provides a continuum programs at three prisons. Under ISUDTP, MAT was of care to people in prison to address their SUD made available at all prisons to targeted groups and other rehabilitative needs. Prior to ISUDTP, starting in 2019-20. CDCR generally assigned people to SUD treatment based on whether they had a “criminogenic” Toxicology Testing Used When Receiving need for the program—meaning the person’s MAT. Toxicology testing is the process of collecting SUD could increase their likelihood of recidivating samples from a person to test for the presence of (committing a future crime) if unaddressed through toxins, poisons, or substances, including illegal rehabilitation programs. In contrast, ISUDTP is substances. Regular testing is important for those designed to transform SUD treatment from being receiving MAT. Toxicology results can be used for structured as a rehabilitation program intended to various purposes, such as to determine a baseline reduce recidivism into a medical program intended level of toxins in the body before people receive to reduce SUD-related deaths, emergencies, and MAT, monitor their adherence to treatment, adjust hospitalizations. For example, as part of ISUDTP, the dosage level of medications, and determine each person leaving prison receives two doses of whether people are continuing to use substances. naloxone, a medication that can help reverse the ISUDTP Expanded in 2022-23. ISUDTP was effects of an opioid overdose. In addition, people expanded through the 2022-23 budget, which who are part of ISUDTP are assigned to SUD brought total current funding for the program to treatment based on whether they are assessed $291.4 million General Fund and 740.6 positions, to have a medical need for such treatment. increasing to $327.9 million in 2023-24. As part of For example, when people are admitted to the ISUDTP expansion, the department indicated prison, Licensed Clinical Social Workers (LCSWs) that it would annually propose both current- and determine the appropriate level of care for those budget-year population-driven adjustments to identified as having a potential SUD with the the program’s resources. This means the level National Institute on Drug Abuse Quick Screen. of funding would be adjusted based on changes Similarly, for those within six months of release from in the population affecting ISUDTP workload, prison, LCSWs administer an SUD assessment such as changes in the MAT patient population. that identifies other needs necessary to facilitate Population-adjusted resources include those for transition into the community. medications used for MAT and toxicology tests. ISUDTP Expanded Availability of Medication They also include adjustments to staffing levels for Assisted Treatment (MAT). People who are various classifications, such as LCSWs as well as addicted to certain substances (such as opioids Licenses Vocational Nurses (LVNs), Pharmacists, or alcohol) can develop a chemical dependency. and Pharmacy Technicians involved in dispensing This can result in strong physical cravings, MAT medications. Accordingly, the $291.4 million in withdrawal that interferes with treatment, the 2022-23 budget and the planned $327.9 million and/or medical complications. MAT is intended to for 2023-24 would be adjusted to account for combine SUD treatment services (such as cognitive population changes. behavioral therapy, a type of therapy which 18 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Governor’s Proposal MAT medications for ISUDTP and other medications not part of ISUDTP. Given that The Governor proposes a net decrease of the MAT patient population is projected to be $28.6 million in 2022-23 and $51 million in the below 17,717 in both the current and budget 2023-24 for ISUDTP relative to the planned year, the department proposes to retain amount when the 2022-23 budget was adopted. 139.8 LVN positions in both years. This reflects This would bring total funding for ISUDTP to a reduction in both the current and budget $262.8 million in 2022-23 and $276.8 million in years of 62 LVN positions. We note that the 2023-24. These changes are the net effect of department indicated that it might revise this (1) various population-driven adjustments based budgeting methodology in the spring. on existing methodologies and (2) a proposed increase in funding for toxicology testing based on • Adjustments Based on MAT Patient a newly proposed methodology. As a part of the Population and Other Factors. Some of the May Revision, the department will update these ISUDTP adjustments are based both on the budget requests based on updated spring 2023 number of MAT patients and other factors. population projections. For example, the number of Pharmacists and Pharmacy Technicians is adjusted based on Population-Driven Adjustments Based on calculations incorporating the MAT patient Existing Methodologies. The Governor proposes population and other factors, such as the various population-driven adjustments to ISUDTP MAT inventory (referred to as Omnicell based on existing methodologies that result in a Count). Based on changes in these factors, decrease in funding of $41.6 million General Fund the department is requesting an increase and 51.6 positions in 2022-23 and $65 million of 2.3 additional Pharmacists in the current General Fund and 105.4 positions in 2023-24. year and 1.9 Pharmacists in the budget year. These changes consist of: In addition, the department is requesting to • Adjustments Based on MAT Patient reduce the number of Pharmacy Technicians Population. Most of the adjustments are due by 6.5 in the current year and 10.2 in the to the MAT patient population being projected budget year. to be about 15,500 in the current year and • Adjustments Based on Factors Other about 16,600 in the budget year rather than Than the MAT Patient Population. Several 25,500, as was previously projected for both adjustments are based on factors other than years. For example, the department proposes the MAT patient population. For example, reducing funding for MAT medications by the level of funding for naloxone and the $16.6 million in current year and $23.1 million number of LCSWs is based on the historical in the budget year. number of admissions to and releases from • Adjustment to LVNs Based Partially on prison each month. Specifically, based on MAT Patient Population. The LVN positions an assumption that there will be an average are only partially adjusted based on the of 3,000 monthly prison admissions and MAT patient population. Specifically, the releases, the department is proposing department receives 1.77 LVNs per 225 MAT an increase of 13.5 LCSWs in the current patients unless this adjustment would result in year and a reduction of 0.5 LCSWs in the the department receiving less than 139.8 LVN budget year. However, the department is not positions, in which case the number of LVNs proposing a change in funding for naloxone remains at 139.8—equivalent to the number of in either year as its existing funding for the LVNs required to distribute MAT medications medication is sufficient, despite changes in to 17,717 patients. The department indicates prison admissions and releases. that it must retain these 139.8 positions even if the MAT patient population is below 17,717 in order to effectively distribute both www.lao.ca.gov 19 2023-24 BUDGET Resources for Toxicology Testing Based For example, it is unclear why, despite a decrease in on New Methodology. The 2022-23 budget the number of MAT patients and MAT medications, provided sufficient resources to conduct ten there would be an increase in the need for toxicology tests per MAT patient per year. However, Pharmacists. Accordingly, it is unclear whether the the administration is proposing to change the number of Pharmacists and Pharmacy Technicians methodology to increase the number of toxicology proposed is justified. tests per MAT patient to 14 per year going forward Request for LCSWs and Naloxone to reflect actual testing data. Accordingly, the Inconsistent With Recent Data on Admissions budget proposes an increase of $13 million General and Releases. As discussed above, the need for Fund in 2022-23 and $13.9 million General Fund LCSWs and naloxone is based on a projection in 2023-24 to provide ISUDTP with sufficient that there will be 3,000 monthly admissions and resources to conduct 14 toxicology tests per releases in both the current and budget year. This is MAT patient annually on a permanent basis. roughly consistent with the number of admissions According to the department, the permanent and releases that have occurred historically. 14 toxicology tests rate per MAT patient is However, this assumption is inconsistent with necessary given that the MAT program has been more recent data. For example, data from the ramping up significantly, which has resulted in a department indicates that in 2022, an average of corresponding increase in toxicology testing being 2,400 people were admitted and 2,700 people were observed. Moreover, CDCR indicates that a higher released from prison each month. This is 600 fewer number of toxicology tests per MAT patient have admissions (or 20 percent) and 300 fewer releases been used because more testing is necessary in (or 10 percent) than assumed in the Governor’s the initial stages of treatment. proposal. This suggests that the department is requesting more resources than it needs in the Assessment current and budget year for LCSWs and naloxone. LVNs Requested Not Solely Based on Budgeting Toxicology Testing Based ISUDTP Workload. Under the department’s on Current Frequency Could Be Flawed in current methodology for budgeting LVNs, LVNs the Future. Given that data on the number of positions are not reduced despite the MAT patient toxicology tests used per MAT patient suggests population being less than 17,717. According to the the department needs to be budgeted for 14 rather department, this is because LVNs have to distribute than 10 tests annually, we do not have concerns both MAT-related medications for ISUDTP and other with increasing funding for such tests in the medications not part of ISUDTP. This suggests current and budget year. However, we find that it that LVN positions budgeted through ISUDTP have could be problematic in the future. Although the workload outside of ISUDTP. This is problematic current rate of toxicology testing for those on MAT because LVN workload outside of ISUDTP is already is higher than anticipated, it is possible that, as funded elsewhere in the health care budget— patients spend more time in the MAT program, the resulting in the department receiving more funds need for toxicology testing could decrease as the than necessary to complete the workload. department indicates patients in the initial stages Unclear Justification for Adjustment of treatment need more testing. Accordingly, the Proposed for Pharmacy Positions. The Governor assumption that the average MAT patient needs proposes to adjust the number of Pharmacists 14 toxicology tests annually could be flawed in and Pharmacy Technicians based on calculations future years. incorporating the MAT patient population and various other factors, such as the Omnicell Count. Recommendations However, the department has not provided Withhold Action. Given that the department sufficient information on how these factors are indicates it will update the proposed funding for used to calculate the number of positions needed. ISUDTP at the May Revision, we recommend that 20 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET the Legislature withhold action until that time. We Direct the Department to Provide Sufficient will advise the Legislature on the revised proposal Justification for Pharmacy-Related Positions. when it is available. We recommend that the Legislature direct the Direct Department to Make Specific Changes department to provide sufficient information to Methodology Used for Revised and Future explaining and justifying its budgeting methodology Proposals. Based on our analysis, we recommend for Pharmacists, and Pharmacy Technicians at that the Legislature direct the department to make budget hearings. This information would help the specific changes to the budgeting methodology for Legislature to review the revised spring proposal LCSWs, naloxone, and LVNs both for the revised when it becomes available and to determine spring proposal and future proposals. Specifically, whether the budgeting methodology for these we recommend the department (1) base requests positions needs to be revised. for LCSWs and naloxone on either updated Annually Adjust Resources for Toxicology projections of or recent data on the number of Testing Based on Actual Usage and MAT admissions and releases each year rather than a Projections. We recommend that the Legislature historical rate and (2) develop a methodology—that direct the department to adjust the level of funding does not include other workload that is not ISUDTP to administer toxicology tests in future years based related—to base the number of LVNs requested for on the projected MAT patient population and the ISUDTP. To the extent the recommended changes average testing rate in the most recently completed result in insufficient LVNs for other workload, the prior year. For example, for the 2024-25 fiscal department could present a separate proposal year, this means basing funding for toxicology justifying the need for such LVNs. These changes testing on the 2024-25 projected MAT population would better tie the level of resources requested to and the average number of tests per MAT patient the department’s actual workload. administered in 2022-23. COMPREHENSIVE EMPLOYEE HEALTH PROGRAM Background Under state law, the Occupational Safety and Health Standards Board is authorized to develop Federal Law Lays Out Workplace Standards additional occupational safety and health standards for Safety and Health. The federal Occupational for California employers that may clarify or exceed Safety and Health Act of 1970 provides that federal standards. Cal/OSHA’s role includes employers—including state departments—have a enforcing both federal and state occupational safety general duty to provide their employees with a place and health standards, which it does by inspecting of employment that is free from recognized hazards workplaces and issuing fines when violations are that are likely to cause death or serious harm. found. For example, CDCR indicates that in the past Under the act, the federal Occupational Safety and five years it has accumulated about $1 million in Health Administration is responsible for setting workplace violations and citations from specific standards related to workplace safety and Cal/OSHA, with most fines related to the prevention health and has authority to inspect workplaces and of aerosol transmitted diseases (diseases enforce these standards. Federal law provides that transmitted through the air). states may, with federal approval and oversight, optionally assume responsibility for enforcement of Employee Health Program (EHP) Established federal occupational safety and health standards. to Mitigate COVID-19 Transmission. In In California, the Division of Occupational Safety October 2022, CDCR started EHP to mitigate and Health (Cal/OSHA) within the Department COVID-19 transmission among CDCR staff by of Industrial Relations administers the state’s providing education, conducting contact tracing, responsibilities for occupational safety and health. administering vaccines, and reporting positive www.lao.ca.gov 21 2023-24 BUDGET tests to staff. The federal Receiver—appointed by between people held in prison and staff. While the the Plata v. Newsom court to take control over the department has not provided specific data on direct management and operation of the state’s how effective EHP has been in minimizing the medical care—oversees EHP, which is primarily spread of the virus among staff, it is reasonable operated by medical staff. The 2022-23 Budget to think that the program can help achieve this Act provided $22.8 million from the California goal through contact tracing, tracking employee Emergency Relief Fund and 157 positions on a vaccination requirements, and supporting testing one-time basis for the program to operate at each efforts. EHP would not only help protect staff and prison. This funding was provided as part of a people held in prison, the program could also larger $240.1 million one-time CDCR proposal generate other benefits for the state. For example, for COVID-19 direct response costs approved by EHP could reduce medical costs, the overtime the Legislature. costs associated with other employees filling in for sick employees, and lockdowns due to COVID-19 Governor’s Proposal in prisons. Provide Ongoing Funding for EHP and Unclear Whether Additional Resources for Expand Focus to Other Diseases. The Governor’s Other Diseases Needed. While it could make budget proposes $22.7 million General Fund sense for the department to dedicate resources to and 148 positions in 2023-24 (decreasing to minimize the transmission of diseases other than $22.3 million annually in 2024-25) to maintain COVID-19 among prison staff, the appropriateness EHP at every prison on an ongoing basis. Under of the level of proposed resources and the benefits the proposal, EHP would begin to focus on to be achieved are unclear. For example, the mitigating diseases in addition to COVID-19, department has not provided information on how such as tuberculosis, Hepatitis B, and influenza. prevalent these other diseases are within state The administration proposes redirecting to EHP prison staff, as well as what needs are not being $2.8 million in existing General Fund support that met with the existing $2.8 million for tuberculosis CDCR currently uses for contracts to provide testing and Hepatitis B and influenza vaccinations. tuberculosis testing as well as Hepatitis B and In addition, under the Governor’s proposal, it is influenza vaccinations. The redirected funds would unclear how much of the proposed $22.7 million in continue to be used for the same purpose, but the budget year would be dedicated to diseases would now be funded through EHP—and overseen other than COVID-19. by medical staff—instead of CDCR’s operations Unclear Whether Proposed Level of budget. According to CDCR, expanding the focus Resources Needed in the Future. It is also of EHP to include other diseases would help the unclear whether the ongoing level of resources department reduce the spread of these disease proposed is justified. This is because it is unclear to staff, as well as workplace citations and fines how much COVID-19-related workload will persist associated with noncompliance with workplace beyond the budget year and how much workload safety regulations. related to diseases other than COVID-19 exists. Given the Governor’s proposal to expand Moreover, as noted above, the department has the focus of EHP, the proposed resources are not been able to provide information on the not included in the department’s request for actual benefits of the program for the Legislature $141.8 million one-time General Fund for COVID-19 to determine what level of resources should be direct response in 2023-24. provided (if any) in the future. Assessment Recommendations Requested Resources Appear Reasonable Approve Additional Resources on a While COVID-19 Remains a Concern. Minimizing One-Time Basis. Given the ongoing presence the transmission of COVID-19 is particularly of COVID-19 in the state’s prisons, we find it is important in prisons because it can spread easily reasonable to maintain EHP during the budget year. 22 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET However, because data is not available on to report by January 10, 2023 on (1) the amount how effective this program is and it is unclear of EHP workload associated with COVID-19; whether these resources are needed in the future, (2) the amount of EHP workload associated with we recommend the Legislature approve the diseases other than COVID-19; and (3) estimates $22.7 million proposal on a one-time basis (rather of the benefits generated by EHP, such as than on an ongoing basis as proposed by the avoided infections, overtime reductions, citation Governor). We note that approving these resources reductions, and any other outcomes that capture on a one-time basis appears to be sufficient the benefits of the program. This information would for the department to continue its COVID-19 allow the Legislature to be better positioned to mitigation efforts and start its efforts of mitigating weigh the merits and cost-effectiveness of EHP the transmission of other diseases among when considering whether to approve ongoing CDCR employees. resources—as well as the level of resources to Direct CDCR to Report on the Program. In provide—for the program as part of its deliberations order to assess the ongoing need for the program, on the 2024-25 budget when funding would expire we recommend that the Legislature direct CDCR for EHP under our recommendation. RESOURCES TO IMPLEMENT RECENTLY ENACTED LEGISLATION RELATED TO PAROLE AND PRISON HEALTH CARE Background Chapter 826 of 2022 (SB 990, Hueso) will change the above processes. Specifically, SB 990 Expands Ability of People on Parole starting January 1, 2024, CDCR will be required to Travel and Transfer to Different Counties. to approve all the requests of people on parole Under existing law, people exiting prison are to travel outside their counties of residence to generally released into the county of their last legal locations where they have education, employment, residence. However, they can request CDCR to or treatment opportunities if the travel does not transfer their release to a different county. Once represent a threat to public safety. Under the on parole, they are not allowed to travel outside legislation, the department must also approve all of the county they are placed in without obtaining requests to transfer residency to other counties in special permission from the department. Similarly, cases where requestors have (1) postsecondary people on parole wanting to transfer their residency educational, vocational training, housing, to a different county must receive prior approval treatment, or employment opportunities or (2) their from CDCR. For both travel and transfer requests, families located in the other counties, unless the the department must complete an investigation to transfers would represent a threat to public safety. ensure the requests meet specific criteria, such The department is also required to provide a written as being in the interest of the requestor (like when response to transfer and travel requests within the requestor has an educational or employment 14 calendar days. opportunity) and not representing a threat to public safety. However, the department has discretion SB 1139 Expands Notifications When Prison on approving or denying the request and is not Hospitalizations Occur. Under current CDCR required to provide a written response on the practice, when a person in prison is hospitalized, results of the final decision. CDCR indicates that it the department limits the number of people who are completes these investigations about 5,000 times a informed. Specifically, the department only notifies year, which is equal to about 11 percent of the total the single person listed on the patient’s next of kin parole population. form. The person can receive additional information www.lao.ca.gov 23 2023-24 BUDGET (such as the current condition of the patient) only if Additional Resources for SB 1139 the patient has (1) listed the person on a release of Workload. The Governor’s budget for 2023-24 medical information form or (2) granted the person proposes $1.1 million ongoing General Fund and medical power of attorney (meaning the person 11.5 positions for CDCR to process the anticipated is responsible for making medical decisions in workload increase associated with SB 1139. the event the patient is unable to do so) through a The level of resources requested is based on (1) an medical power of attorney form. The department assumption that the number of people that the is not required to notify other people who might department will be required to notify per person be listed on the release of medical information hospitalized will increase from one to an average of or medical power of attorney forms of the four people, (2) the total number of hospitalizations hospitalization. Under current practice, the forms that happened at each prison between October for next of kin, medical release of information, and 2021 and September 2022, and (3) the number of medical power of attorney are updated only in requests a staff member can currently process a certain cases, such as when a patient requests an month. The requested funding would be directed on update or receives healthcare services. an ongoing basis to the 12 institutions projected to Chapter 837 of 2022 (SB 1139, Kamlager) have highest increases in workload. CDCR expects removes the limit on the number of people that that the number of people needing to be notified can be notified when a patient is hospitalized. each year will remain constant in the future. Specifically, the legislation requires the department, Assessment after the patient is hospitalized, to notify all people listed on the patient’s release of medical information Updated Population Projections Could form in addition to the person listed on the next of Identify Different Resources Need. We find the department’s assumption that SB 990 will increase kin form. The legislation also directs CDCR to offer travel and transfer requests from about 11 percent every person in prison an opportunity to update to 25 percent of the total parole population to their next of kin, release of medical information, be reasonable. However, the proposed level of and medical power of attorney forms at least resources for 2023-24 is based on projections once a year. Senate Bill 1139 specifies that the of the size of the parole population completed above changes only take effect when funds are in fall 2022. These projections, along with all of appropriated to support their implementation. the department’s population projections, will be Governor’s Proposals updated this spring. Accordingly, the proposed level Additional Resources for SB 990 of resources to implement SB 990 in the budget Workload. The Governor’s budget for 2023-24 year might need to be updated at that time based proposes $2.3 million ongoing General Fund on the spring projections. and 10.4 positions for CDCR to process the Similarly, we find it reasonable to assume that anticipated workload increase associated with SB 1139 will cause the number of notifications SB 990. Specifically, CDCR anticipates that the per hospitalization to increase from one to four number of people submitting transfer and travel in the budget year. However, unlike SB 990, the requests will increase from about 11 percent of the methodology used by the department to estimate total parole population to 25 percent of the total the number of total hospitalizations—and thus parole population annually when the legislation the level of resources needed—is not based on becomes operational. Although the provisions of projections of the number of hospitalizations SB 990 are not operative until January 1, 2024, that will occur in the budget year. Rather, the CDCR is requesting resources for the full budget department assumes that the same number of year (rather than for only the first six months— hospitalizations that occurred between September from January 1, 2024 through June 30, 2024) to 2021 to October 2022 will occur from July 1, 2023 train new staff, develop and implement policies to June 30, 2024. As noted above, the department and procedures, and prepare for the increased is expected to provide updated population workload starting in 2024. projections this spring, including for the medical 24 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET patient population (people in prison who are at Similarly, we recommend that the Legislature risk of requiring medical attention). The resources adjust the budget-year funding for SB 1139 provided to the department for SB 1139 should be to be consistent with the projections of the calculated based on these projections and the most medical patient population updated in the recent hospitalization rate of medical patients. spring. Specifically, we recommend that the Proposed Resources in Out -Years Not Tied Legislature provide a level of resources sufficient to Changes in Population. The department’s for the department to notify four people for workload for both SB 990 and SB 1139 after the each hospitalization projected to occur in the budget year will depend on annual changes to budget year, with the number of hospitalizations the size of correctional populations they impact. calculated based on the projections of the medical Specifically, the workload for SB 990 will vary with patient population. changes in the size of the parole population, while Annually Adjust Resources for SB 990 and the workload for SB 1139 will vary with changes SB 1139 in Out-Years. We recommend that in the size of the medical patient population. the Legislature direct the department to adjust However, under the Governor’s proposal, the level the level of funding to support the workload of requested funding for SB 990 and SB 1139 associated with the implementation of SB 990 and workload would not change in the out-years based SB 1139 annually based on the changes in the on changes in these populations. Instead, funding correctional populations they impact. Specifically, for this workload would remain the same on an we recommend the Legislature direct CDCR to ongoing basis. This means that even if both the annually base future funding requests for: parole and medical patient population were to • SB 990 workload on (1) the parole population decrease in the future—as currently projected— projections and (2) the percent of the parole and in turn reduce the workload for SB 990 and population making transfer and travel requests SB 1139, the funding for the workload would remain in the prior year. at the base level proposed by the Governor— • SB 1139 workload on (1) the projections of leaving the department with excess resources. the population of medical patients and (2) the Alternatively, an increase in the parole and medical number of notifications per patient required in patient populations at some point in the future the prior year. would leave the department with insufficient resources to meet the increased workload for These adjustments can be incorporated into SB 990 and SB 1139. the department’s annual population budget adjustment process. Recommendations Tie Budget-Year Funding for SB 990 and SB 1139 to Updated Population Projections. In view of the above, we recommend that the Legislature adjust the budget-year funding for SB 990 to be consistent with the projections of the parole population updated in the spring. Specifically, we recommend that the Legislature provide a level of resources sufficient for the department to process travel and transfer requests for 25 percent of the parole population. www.lao.ca.gov 25 2023-24 BUDGET DIVISION OF JUVENILE JUSTICE CLOSURE Background certain sex offenses) and (2) had a transfer request to adult court filed in their cases by Juvenile Courts Decide Where to Place a prosecutor. (As we discuss below, DJJ is Youths. Youths accused of a crime that occurred scheduled to close at the end of the current before they turn 18 years of age start in juvenile fiscal year.) To assist counties with their courts. If the court determines the youth committed increased responsibility, the state provides the crime, it then determines where to place the funding to counties—in addition to the funding youth based on statute, input from the defense, provided from SB 81—which is estimated to county probation, and prosecutors, as well as be $122 million in 2022-23 and reaching over factors such as the youth’s offense and criminal $200 million annually by 2024-25. history. Depending on the circumstances of the case, the juvenile court currently can take several Most Youths Placed With Counties. Youths possible actions including placing the youth under placed under county supervision are typically county supervision or in DJJ. In 2022, a total of allowed to remain with their families with some 2,706 youths were either held in a DJJ or county level of supervision from county probation officers. facility, which is about 5,600 fewer youths than However, some youths—typically those who have the 8,320 youths held in 2012. In addition, the committed more serious crimes—are housed in court may choose to transfer certain youth cases county juvenile facilities, such as juvenile halls or to adult court if a transfer request is filed with the camps. In 2022, there were roughly 2,146 youths court by a prosecutor in cases where youths have housed in county juvenile facilities. While counties committed very serious crimes. have typically served a greater portion of youths Responsibility and Funding for Certain Youth than the state, realignment resulted in a further Has Shifted From the State to Counties. Various increase in the county share of responsibility. pieces of legislation have significantly reduced the Small Number of Youths Placed in DJJ Until number of youths eligible for placement in DJJ. June 30, 2023. Consistent with the realignment In particular, two keys pieces of legislation shifted, discussed above, existing state law specifies or “realigned,” responsibilities for certain youth from that DJJ shall close on June 30, 2023 and that the state to the counties by limiting which youths no placements to DJJ may occur after that date. could be sent to DJJ. Specifically: As of January 2023, there were about 390 youths housed in DJJ’s four facilities, which include • Chapter 175 of 2007 (SB 81, Committee on N.A. Chaderjian Youth Correctional Facility, Budget and Fiscal Review) restricted the O.H. Close Youth Correctional Facility, Ventura type of youths that juvenile courts could Youth Correctional Facility, and Pine Grove Youth place in DJJ to only those who committed Conservation Camp. Counties are currently certain significant crimes listed in statute. responsible for paying the state an annual rate The state currently provides over $200 million $125,000 or about $340 per day for the time the annually to counties for costs associated with youths are housed in a DJJ facility. supervising youths that might otherwise have been placed in DJJ. DJJ Facilities to Close by July 2023. DJJ’s facilities will close by July 1, 2023. However, as • Chapter 337 of 2020 (SB 823, Committee we discuss below, Pine Grove Youth Conservation on Budget and Fiscal Review) realigned Camp will become a camp operated by CDCR responsibility for most remaining youths from to train justice-involved youth in wildland the state to the counties. Since July 1, 2021, firefighting skills. Youths still housed in DJJ youths can only be placed in DJJ if they at that time—including those housed at Pine (1) committed certain significant crimes listed Grove—will be transferred to county jurisdiction. in statute (such as murder, robbery, and 26 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET As part of the process of transitioning youths to At the time of this analysis, we were still waiting for county responsibility, CDCR staff are currently information from the department on the costs of completing individualized transition plans for each these positions. These include: youth that notifies the county of the youth’s needs, • Staff to Complete Closure. The Governor’s participation in programs, and security concerns. proposal includes funding to keep Following the closure of DJJ, CDCR (rather than 111 positions between one and six months to DJJ) will operate Pine Grove to train justice-involved complete the DJJ closure. These positions youth in wildland firefighting skills through a consist of various staff to document inventory, state-local partnership. Specifically, CDCR is deactivate facilities, and move equipment authorized to enter into contracts with counties and records out of DJJ facilities, as well as to accept into Pine Grove youths who are under supervisors for this temporary staff. the jurisdiction of the juvenile court for a serious • Staff to Help Transition Youth to Counties. crime and are at least 18 years old, as well as other The Governor’s proposal also includes funding eligibility criteria established by the department. to keep 13 positions between 6 and 12 months Similar to other placements, juvenile courts, with to help transition youth. The positions consist input from defense as well as county probation of two Parole Agents that would provide and prosecutors will be responsible for deciding counties with subject matter expertise on whether to place youths that meet the eligibility gangs, one Teacher and Superintendent to criteria at Pine Grove. provide counties with support related to DJJ education, and eight Psychologists and one Governor’s Proposal Chief Psychologist to create a mental health The Governor’s budget for 2023-24 proposes transition team that will support counties. various adjustments related to the closure of DJJ. In total, the Governor’s proposal reduces DJJ’s Eliminates Some Related Funding From budget from $258 million (largely from the General CDCR’s Non-DJJ Budget. The Governor’s budget Fund) in 2022-23 to about $3 million in 2023-24. also eliminates $3.9 million and 24 positions The Governor’s budget also proposes a net from CDCR that are not part of DJJ’s budget, but increase of $22.8 million annually to CDCR (outside currently support DJJ workload. For example, the of DJJ’s budget) for ongoing workload related to the proposal would eliminate accounting positions from closure and the continued operation of Pine Grove. CDCR’s Fiscal Services unit that are dedicated to Below, we provide more detail on these proposals. DJJ workload. Eliminates Most Resources From DJJ’s Augments CDCR’s Non-DJJ Budget for Budget. Although DJJ will be closed to youth Ongoing Workload Associated With Closure. in 2023-24, the Governor’s proposal would not The Governor proposes to augment CDCR’s completely eliminate DJJ’s budget. As discussed budget outside of DJJ on an ongoing basis below, the administration is proposing to maintain with $19.8 million and 27 positions for workload some DJJ staff in 2023-24 for temporary workload associated with DJJ’s closure. This includes staff associated with DJJ closure and transitioning and resources for: youth. According to the administration, it might • Workers’ Compensation Claims need to make further technical adjustments to ($15.3 Million). The workers’ compensation eliminate additional funding from the DJJ budget as system provides benefits to employees for part of the May Revision. work-related injuries or illnesses. These Maintains Limited-Term DJJ Resources for benefits may include medical treatment, Temporary Workload Associated With Closure payments for lost wages, and payments and Transitioning Youth. The Governor proposes that compensate the injured employee for to maintain about 124 positions for temporary having a permanent impairment or limitation. workload associated with closure activities and The obligation to pay these costs for former activities to transition youth to the counties. DJJ employees will remain after the closure. www.lao.ca.gov 27 2023-24 BUDGET Accordingly, the Governor’s proposal includes the camp (or about 7 percent), given it can hold two permanent positions for processing such a maximum of 100 youth. As discussed above, claims and $15 million to pay for the claims. youths must meet certain criteria set in statute and • Warm Shutdown of Facilities ($3.4 Million). established by CDCR to be eligible for placement. When CDCR facilities are deactivated, their These include that youth must be under the basic infrastructure is often maintained to jurisdiction of a juvenile court, at least 18 years of ensure it does not deteriorate while the age, have a high school diploma or equivalent, and facility is unused—a practice referred to as must not have a sex or arson offense. warm shutdown. The Governor’s proposal Assessment provides 15 positions for CDCR to place all DJJ facilities—with the exception of Pine Some Temporary Staff to Complete Closure Grove—on warm shutdown. These positions Could Be Unnecessary. As previously mentioned, the Governor’s budget proposal includes funding will be funded on an ongoing basis to conduct to keep 111 positions on a temporary basis in the pest control, safety maintenance, and other budget year to complete the DJJ closure. We note, preventive care. however, that it is possible that the workload • Administrative Workload ($900,000). associated with some of these positions could be The Governor’s proposal provides six completed in the current year ahead of the closure. positions for administrative workload, such as Some of the requested 111 temporary positions and ongoing recordkeeping and maintenance of associated workload that could be completed prior transcripts as well as processing of transcript to closure includes: two Chaplain positions for one requests. CDCR expects that this workload month to archive records and inventory property, will continue permanently. two Pharmacists and two Pharmacy Technicians • Automotive Maintenance for California for one month to inventory medications, two Health Care Facility ($200,000). Because Lieutenants for two months to process contraband the California Health Care Facility (CHCF) does and take inventory of various correctional officer not have an in-house automotive repair shop, equipment, and ten Case Records Technicians the adult prison staff must take the CHCF for at least two months to help transition DJJ files vehicle fleet off-site for repair. The Governor’s to the counties. Given that the administration’s proposal requests resources to use the request is based on estimates for the amount of existing DJJ automotive facilities, which are temporary workload to remain post-closure as of located in close proximity to CHCF, to service last fall, revised estimates this spring on the amount the CHCF vehicle fleet. Included in the request of workload remaining could show that some or are two automotive mechanic positions that all of the above positions are not necessary on a would service the CHCF fleet. workload basis. Provides CDCR Resources for Operation of Temporary Staff to Help Transition Youth Pine Grove. The Governor proposes $6.9 million Unnecessary. Given that each youth transitioning and 27.6 positions ongoing for CDCR to maintain to county jurisdictions from DJJ will have an operations of Pine Grove. The administration has individualized transition plan that notifies the county indicated that CDCR entered into contracts with of the youth’s needs, participation in programs, five counties that would send youth to Pine Grove, and security concerns, we find the 13 temporary and expects to add 19 additional counties. Under staff to help transition youth post-closure seem the proposed contracts, the state would pay most unnecessary. Although DJJ staff indicate that of the costs associated with Pine Grove operations. these positions could help address concerns from However, counties would be responsible for paying counties, they also indicated that counties have not a rate of $81 per day that a youth is in training and requested this specific support. $10 per day otherwise—or a maximum of about $4,600 per year. This means counties would cover—at most—around $460,000 of the costs of 28 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET Proposed CDCR Resources for Workload the resources needed to operate Pine Grove. This is Associated With Closure Appear Justified because most of the expenses of the staff and other for 2023-24, but Some Positions Likely overhead will occur regardless of how many youths Unnecessary on Ongoing Basis. We find that are in the camp at any given time. the permanent positions and associated funding Proposed Pine Grove Contracts Inconsistent proposed for CDCR for workload associated with With Realignment. As previously mentioned, the closure appear needed in the budget year. under the current contracts and the Governor’s However, some of the proposed resources are likely proposal, the state would be responsible for at to be unnecessary in the future as some of the least 93 percent of the cost of the camp, with workload will decline. For example, as DJJ workers’ counties paying fees supporting only 7 percent compensation claims close in the future and no new of the costs. We find that this is inconsistent with workers’ compensation claims are filed because underlying goal of realignment to make juvenile of the closure, the workload necessary to process justice solely a county responsibility. Moreover, the remaining open claims will decline. Similarly, the contracts would result in the state effectively the administrative workload related to maintaining double paying counties that choose to send and processing DJJ files will likely decline over the realigned youth to Pine Grove. This is because years. For example, as former DJJ youth age, there the state already provides funding to counties for are likely to be a declining number of transcript these youth through the grant programs created by requests. Accordingly, the resources could be SB 81 and SB 823. unnecessary in the future. Recommendations Funding for Automotive Maintenance for Nearby CHCF Not Justified. As previously Approve Reductions Associated With mentioned, the administration indicates that Closure. We have no concerns with the proposed it will be more efficient for CHCF to service its reductions to the DJJ budget. Accordingly, we vehicle fleet by using the existing DJJ positions recommend the Legislature approve the reductions. and automotive facilities rather than taking the If the administration proposes further reductions fleet to be serviced off-site as is currently done. in the spring—as it has indicated could be However, while the Governor’s budget proposes necessary—we will advise the Legislature on such $200,000 to support the DJJ automotive facilities, proposals at that time. the budget does not eliminate the funding that is Withhold Action and Direct Department currently being used to pay the costs of taking to Report on Need for Temporary Staff to the fleet to be serviced off-site—resulting in an Complete Closure. As discussed above, it increase in total costs rather than savings. As a is possible that some of the workload for the result, we find the funding requested for the two temporary staff requested for the closure will positions unnecessary, as it appears that CDCR be completed before 2023-24. The department could redirect the existing resources it is using to will have better information in the spring as service the CHCF fleet off-site to support the cost to the amount of workload remaining and the of servicing it at the DJJ automotive facilities. corresponding number of temporary staff it will Permanent CDCR Staff for Pine Grove need. Accordingly, we recommend the Legislature Operations Appears Reasonable. The requested withhold action on this part of the proposal and resources to staff Pine Grove appear justified since direct CDCR to provide in spring budget hearings the proposed staffing package is similar to the updated estimates of the workload remaining to existing staffing package used by DJJ. For example, complete the closure. in recent years Pine Grove’s existing annual budget Reject Temporary Positions to Help was between $6 million and $7 million. While it is Transition Youth. We recommend the Legislature unclear how many counties will send youths and reject the proposed temporary positions to help how many youths will be at the camp, the number counties transition youth. We find these staff to of youths in the camp will not significantly impact be unnecessary because each youth will have a www.lao.ca.gov 29 2023-24 BUDGET county transition plan to inform counties of their Require Department to Charge Counties specific needs. Moreover, the department indicates a Fee That Minimizes State Costs for Pine that counties have not directly requested this type Grove. We recommend the Legislature require of support. CDCR to charge counties a fee that covers a Modify Resources for Ongoing Workload larger share of the costs of operating Pine Grove. Associated With Closure. We recommend For example, an annual fee of about $70,000, or the Legislature modify the proposed ongoing about $192 per day, would roughly cover all of the resources for CDCR associated with closure of DJJ. costs of Pine Grove assuming the camp operates Specifically, we recommend: at full capacity. This would ensure counties remain fiscally responsible for most of the costs of youth • Approving the $15.3 million and two positions in the juvenile justice system, as well as minimize to process workers’ compensation claims and the extent to which the state would effectively be $900,000 and six positions for administrative paying counties twice for realigned youth. workload on a two-year, limited-term basis as Monitor Continued Need for Pine Grove. the need for these resources is likely to decline We recommend the Legislature monitor the in the future. We note the department can continued need for operating Pine Grove. request to retain these resources in the future For example, if it becomes unviable to operate if the need for them persists. Pine Grove because few counties place youths in • Approving the two automotive maintenance the camp, then the Legislature could reconsider positions to provide repair and maintenance the cost-effectiveness of maintaining Pine Grove. services to the CHCF vehicle fleet, but However, to the extent it remains a legislative rejecting the requested $200,000 as CHCF priority, the Legislature could consider taking steps should have sufficient resources for these to encourage counties to place youth there, such positions within its existing budget from the as reducing the county share of costs in the future if funding freed up from servicing the CHCF fleet cost is the primary factor preventing counties from at DJJ facilities. placing youths in the camp. • Approving the proposed $3.4 million and 15 positions requested for warm shutdown. 30 LEGISLATIVE ANALYST’S OFFICE 2023-24 BUDGET www.lao.ca.gov 31 2023-24 BUDGET LAO PUBLICATIONS This report was prepared by Caitlin O’Neil and Orlando Sanchez Zavala, and reviewed by Drew Soderborg and 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, California 95814. 32 LEGISLATIVE ANALYST’S OFFICE