Achieving the Goals of the SB 678 County Probation Grant Program

2023-24 BUDGET Achieving the Goals of the SB 678 County Probation Grant Program GABRIEL PETEK | LEGISLATIVE ANALYST OCTOBER 2023 www.lao.ca.gov 1 AN LAO REPORT Top Left: Courtesy of the County of Sacramento. 2 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Executive Summary State Created Performance-Based Incentive Program for County Probation to Achieve Three Goals. Chapter 608 of 2009 (SB 678, Leno)—also known as the Community Corrections Performance Incentives Act of 2009—established a performance-based incentive grant program intended to achieve three primary goals related to county probation: (1) reduce the rate at which people on felony probation were sent to state prison, (2) create state savings, and (3) improve public safety. In order to achieve these goals, SB 678 required that a portion of the state savings created when fewer people on felony probation are sent to prison be provided to counties through a performance-based formula. It also required the funds be used to support evidence-based practices—meaning practices shown to be effective at reducing criminal offending. Since the enactment of SB 678, the state has awarded a total of over $1 billion to county probation departments. Sentencing Changes Have Impacted Probation, Resulting in Various Modifications to the SB 678 Formula. Since the enactment of SB 678, the state has implemented various sentencing changes that impacted probation in significant ways, such as by changing when people on felony probation can be sent to prison. For example, the 2011 public safety realignment made fewer people eligible for prison by shifting responsibility for lower level offenses from the state to counties. As a result of these sentencing changes, the original SB 678 formula has been frequently modified. These modifications were made in an attempt to prevent county grant awards from changing for reasons unrelated to performance. Unclear on Extent to Which SB 678 Program Is Currently Achieving Its Goals. Our review of the SB 678 grant program indicates that the program appeared to effectively achieve its three goals in the initial years of implementation. However, significant sentencing changes and modifications to the formula over the years have made it unclear whether the program continues to achieve its goals. This is because (1) the effects of SB 678 on the prison population, state savings, and crime are difficult to distinguish from other policy changes; (2) components of the current formula do not align with the original goals of the program; and (3) it is unclear whether counties are actually implementing evidence-based practices, which is important for achieving the goal of improving public safety. We also find that it is more challenging to use state savings to incentivize performance given the various sentencing changes affecting felony supervision. However, there continue to be state benefits from supporting evidence-based practices at the local level. Recommend Creating a New Funding Formula. In view of our findings, we recommend the Legislature establish a new formula for the SB 678 program to better ensure that the program’s goals are achieved. Specifically, we recommend creating a new formula with two portions: (1) a portion based on direct measures of performance and state savings and (2) a portion designed to pay for specific evidence-based practices. This, as well as establishing additional oversight mechanisms of the program, would better ensure the program is effectively reducing failure-to-prison rates for those on county felony supervision, creating state savings, and improving public safety. www.lao.ca.gov 3 AN LAO REPORT 4 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT INTRODUCTION The state has a clear fiscal interest in the failure-to-prison rate, the program is intended to success of county probation because people generate state savings and improve public safety supervised by probation departments can be sent by incentivizing counties to use evidence-based by the courts to state prison. In order to reduce practices—meaning practices shown to be effective admissions into state prison from people on county at reducing criminal offending. Since the enactment probation, the state enacted Chapter 608 of of SB 678, the state has awarded a total of over 2009 (SB 678, Leno) to establish the Community $1 billion to county probation departments to fund Corrections Performance Incentive grant program, evidence-based practices intended to reduce the commonly referred to as the SB 678 grant program. failure-to-prison rate. In this report, we (1) provide The program is a performance-based incentive background on felony sentencing, probation, and grant that awards county probation departments the SB 678 grant program; (2) assess whether for reducing the rate at which people on county the program is currently achieving its goals; and felony supervision are sent to prison, known as the (3) recommend steps to help ensure the program “failure-to-prison rate.” In addition to reducing the achieves its goals. BACKGROUND FELONY SENTENCING • County Jail. People convicted of a felony who have no prior or current convictions There are three types of crimes: felonies, for serious, violent, or sex offenses can be misdemeanors, and infractions. A felony is the sentenced to serve their term in county jail. most severe type of crime. A package of legislation • Split Sentence. Rather than a county jail referred to as “the 2011 public safety realignment” sentence, courts may require people who shifted (or realigned) the responsibility for certain have no prior or current convictions for felony populations from the state to counties. serious, violent, or sex offenses to serve This resulted in the current division of responsibility a “split sentence” with a portion of their for felony populations, which we describe below. sentence being in jail and a portion being in (See the box on the next page for more information the community under “mandatory supervision” on the 2011 public safety realignment.) provided by a county probation officer. Some Felonies Are Classified as Violent • State Prison and Parole or Post-Release and/or Serious Offenses. Existing state law Community Supervision (PRCS). Those classifies some felonies as “violent” or “serious,” convicted of a felony who are ineligible for or both. Examples of felonies currently defined as county jail because of their criminal history violent include murder, robbery, and burglary of an can be sentenced to state prison. Upon occupied residence. While almost all violent felonies release from prison, people with a current are also considered serious, other felonies—such serious or violent offense are supervised in as selling certain illegal drugs to a minor or making the community by state parole agents. The criminal threats of violence—are defined only as remainder of people released from prison are serious. Felonies not classified as violent or serious generally placed on PRCS and supervised by include sale of illegal drugs to adults. county probation officers. Felony Convictions Can Lead to Incarceration and/or Community Supervision. People convicted of felonies are typically sentenced to one of the following: www.lao.ca.gov 5 AN LAO REPORT The 2011 Public Safety Realignment Shifted Certain Felony Populations From State to County Responsibility. The 2011 public safety realignment was a package of legislation that shifted (or realigned) the responsibility for incarcerating and supervising tens of thousands of people convicted of certain felonies from the state to counties. (We note that the public safety realignment was part of a larger 2011 realignment that shifted various responsibilities to the counties, including responsibilities unrelated to public safety.) Prior to the realignment, the state was responsible for all people convicted of felonies, with the exception that county probation departments were responsible for supervising people convicted of a felony crime but placed on felony probation in the community instead of being incarcerated. As a result of the 2011 public safety realignment, counties became responsible for the following populations: • People Convicted of Nonserious, Nonviolent, Non-Sex Offenses With No Prior Convictions for Such Offenses. These people generally serve their terms in county jail or through a split sentence rather than in state prison. (A split sentence is a combination of jail and mandatory supervision in the community provided by county probation officers.) However, courts may continue to place these people on felony probation, as was done prior to realignment. A key difference under realignment is that people on felony probation for crimes no longer eligible for prison who violate the terms of their supervision are not sent to prison—unless the violation is a new prison-eligible crime. • People Released From Prison Whose Current Offense Is a Nonviolent and Nonserious Felony. These people are generally placed on Post-Release Community Supervision and supervised by county probation officers rather than state parole agents. • People Violating the Terms of Their Parole Supervision. These people are generally placed in county jail rather than state prison. The state also realigned certain non-General Fund revenues—namely, a set portion of sales tax—to the counties to help pay for these new responsibilities. Currently, these revenue sources provide the counties roughly $2 billion annually for the above populations. Implemented to Reduce Prison Overcrowding, Create State Savings, and Improve Outcomes. There were three main reasons the state implemented the 2011 public safety realignment. First, the state sought to reduce prison overcrowding by reducing the number of people held in state prison. This was primarily due to a federal court order that declared that overcrowding was the primary reason why the state was unable to provide constitutionally adequate health care to people in prison. Second, the state was in the midst of a significant fiscal crisis and the broader realignment helped the state address its budget shortfall by providing counties with a dedicated revenue stream outside of the state General Fund to pay for the realigned activities, thereby reducing General Fund costs. Finally, it was thought that counties would be able to achieve better outcomes than the state for various reasons. For example, it was thought that counties could more effectively coordinate services—such as behavioral health, which was already largely a county responsibility—for the people they became responsible for. 6 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT • Felony Probation. Instead of sentencing Probation Departments Have Key County those convicted of a felony to the typical Felony Supervision Responsibilities. These term for their crime—such as prison, jail, or a responsibilities include: split sentence as discussed above—a court • Investigations. Probation departments may place someone on felony probation, provide presentencing reports to the courts depending on the person’s criminal history. after a conviction. These reports usually detail People placed on felony probation are typically the relevant history of the person, including assigned to a county probation officer who prior criminal arrests and convictions, supervises them in the community. family circumstances, work experience, and Community Supervision Violations Can Lead educational background. The court uses these to Incarceration. People who violate the terms reports, which frequently include a sentencing of their mandatory supervision, PRCS, or felony recommendation, to make sentencing probation—we refer to these forms of supervision decisions for people who are convicted. collectively as county felony supervision—can be • Supervision. Probation officers are punished in various ways. People on PRCS and responsible for making sure that those on mandatory supervision can be placed in jail for supervision comply with the terms of their violations. People on felony probation who violate supervision. These terms generally include the terms of their supervision can be required to avoidance of criminal activity and other serve the typical term for their crime in prison if requirements such as drug testing, electronic they are on probation for a prison-eligible crime. monitoring, restitution payments, community Otherwise, people on felony probation can be service, and participation in drug treatment required to serve the typical term for their crime in or domestic violence counseling. Probation jail or through a split sentence for violations. People officers typically conduct home visits or meet on all forms of county felony supervision can be people in the probation office, as well as sent to prison if they commit a new prison-eligible review drug test results and progress reports crime. (People on state parole who violate the terms from treatment providers. When people violate of their supervision can also be punished in various ways, including through incarceration.) Figure 1 ROLE OF PROBATION County Felony Supervision Respresents DEPARTMENTS IN COUNTY Majority of Adult Probation Caseload FELONY SUPERVISION Most of the Population Supervised by Total Adult Probation Caseload: 297,000 Probation Departments Are on County Felony Supervision. Probation departments—overseen Mandatory Misdemeanor Probation Supervision by a chief probation officer who, based on local practice, is appointed by either the local presiding judge or the county board of supervisors—are responsible for supervising adults on county felony PRCS supervision and misdemeanor probation, as well as all youths in the juvenile justice system. However, Felony Probation adults make up roughly 90 percent of probation department caseloads statewide. As shown in Figure 1, most of the adult caseload consists of people on county felony supervision. The county felony supervision population totaled about County Felony Supervision 271,000 in 2022. PRCS = Post-Release Community Supervision. www.lao.ca.gov 7 AN LAO REPORT their supervision terms, the probation 19,000 people were entering prison each officer recommends an outcome to the year as a result of a probation failure—about court, which could include continuation on 40 percent of all prison admissions at the time. supervision—perhaps with stricter supervision • Create State Savings. In 2009, the state requirements—or being sent to county jail or faced significant budget challenges due to state prison depending on the crime and type the Great Recession. Accordingly, it was of supervision the person is on. hoped that, by encouraging counties to divert • Program Referrals. The supervising people on probation away from prison, the probation officer typically is responsible for program could create significant state savings referring people to specific program providers to help address the fiscal crisis. For each in the community that are intended to help person diverted from prison, the state could people avoid committing new crimes and avoid paying the associated costs of prison improve their lives. These programs are and parole. usually operated by other county agencies or • Improve Public Safety. Prior to SB 678, through contracts with nonprofits or private, concerns were raised that probation for-profit companies. These programs can departments were not effectively preventing include anger management, sex offense people from committing crimes. This is treatment, or substance use treatment. because many probation departments reported not using or not contracting with SB 678 GRANT PROGRAM providers that use evidence-based practices that research has shown to be effective in Senate Bill 678—also known as the Community reducing recidivism (criminal reoffending). Corrections Performance Incentives Act of 2009— (There was also uncertainty whether established a grant program intended, among other other criminal justice entities were utilizing things, to reduce the number of people on felony evidence-based practices.) As a result, it was probation who are sent to state prison (known as unclear whether the practices they were using the failure-to-prison rate). In this section, we detail to prevent people from committing new crimes the specific goals of the SB 678 grant program and were effective at doing so. (For additional discuss how the funding formula for the program information on evidence-based practices, see has changed due to various sentencing changes the nearby box.) that have been implemented since the program was created. In order to achieve these goals, SB 678 required that a portion of the state savings created by the Program Goals program would be provided to counties—through The SB 678 program was established to achieve the formula we describe below—specifically to three primary goals related to probation: support the use of evidence-based practices. Senate Bill 678 defined evidence-based practices • Reduce Failure-to-Prison Rates. When the as “supervision policies, procedures, programs, program was first established, the state was and practices demonstrated by scientific research facing litigation related to prison overcrowding. to reduce recidivism” among people under local One reason for the overcrowding was because supervision. The legislation also required Judicial counties exercised significant discretion in Council to collect and report data from county sending someone on felony probation to probation related to the above goals. Specifically, prison. Specifically, prior to the 2011 public Judicial Council is required to annually report, for safety realignment, probation officers could each county, failure-to-prison rates, the amount of recommend that courts send anyone on state savings it was estimated to have created, and felony probation to prison if they violated their information on its use of evidence-based practices. terms of the supervision—even if the violation was not a new crime. On average, about 8 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Evidence-Based Practices Definition of Evidence-Based Practices. Broadly speaking, evidence-based practices are specific practices that research has shown to be effective in achieving a particular outcome. In the context of probation supervision practices, this often means practices that are effective at reducing recidivism—or the rate at which people previously convicted of crimes commit new crimes. More specifically, to be evidence based, a practice must be both of the following: • Research Based. Practices that are research based are designed to be similar to practices that have undergone rigorous evaluations showing that they reduce recidivism. • Implemented With Fidelity. A research-based practice that is implemented with fidelity not only is designed to be similar to a proven practice, but is also actually carried out in the same manner as the proven practice. In contrast, a practice that is designed to be similar but fails to actually be carried out in a similar manner on a day-to-day basis would be research based, but not implemented with fidelity. Ensuring that a practice is implemented with fidelity to a research-based model increases the likelihood that it could successfully reduce recidivism. Examples of Evidence-Based Probation Supervision Practices. Some examples of evidence-based probation supervision practices include (1) using assessments to identify a person’s risk of committing new crimes and varying supervision levels based on that assessed risk, (2) having people on supervision complete treatment programs based on their risks and needs, and (3) providing an intervention in an amount that is sufficient and that matches the characteristics of the target population. According to research, these practices have been found to result in more effective supervision, reduced recidivism, better prioritization of limited supervision resources, and reduced incarceration costs. For example, the state of Maryland evaluated its efforts of integrating risk and needs assessments into supervision and found that, when switching to a model where probation and parole officers regularly use risk and needs assessments and track people’s progress towards specific goals (such as completing treatment), the people on supervision were less likely to be rearrested for a new crime. This held true even after researchers accounted for other factors that could explain the lower numbers of crimes, such as prior criminal history. Original SB 678 Funding Formula compared to the number of failures it was expected to have based on its current population and the Formula Initially Tied Funding Closely to baseline felony probation failure-to-prison rate. Performance and State Savings. When SB 678 The baseline for each county was calculated as the was enacted, it included a funding formula county’s average felony probation failure-to-prison designed to tie the amount counties receive rate in 2006 through 2008 (the three-years before closely to (1) their ability to divert people on felony SB 678 was enacted). If the actual number of probation from prison and (2) the amount of state people on felony probation sent to prison in a savings they generated by doing so. The legislation given year was less than the expected number, the specified that the amount of savings was to be county would receive 40 percent to 45 percent of estimated by the Department of Finance (DOF), in the state savings for each person diverted from consultation with other agencies (such as Judicial prison. The state savings of $29,000 per person Council). As shown in Figure 2 on the next page, diverted was based on the marginal cost of prison under the original SB 678 formula, each county’s and parole supervision and average length of stay actual number of felony probation failures was at that time. www.lao.ca.gov 9 AN LAO REPORT a proportionate share, based on Figure 2 their population of adults ages Example of Estimated State Savings Under Original 18 to 25, of 5 percent of the overall SB 678 Formula state savings created by SB 678. (The overall state savings was the County A County B County C sum of the savings created by each Baseline Failure-to-Prison Ratea 15.0% 10.0% 1.3% county.) Counties that chose to Felony Probation Population 5,000 10,500 5,000 receive this award were ineligible Expected Failures to Prison 750 1,050 63 Actual Failure-to-Prison Rate 10.0% 8.6% 1.2% for awards based on the number of Actual Felony Probation Failures to Prison 500 900 60 people they diverted from prison. People Diverted From Prison 250 150 3 Typically, counties chose this option State Savings Createdb $7,250,000 $4,350,000 $87,000 if their baseline failure-to-prison a Calculated as the average felony probation failure-to-prison rate between 2006 and 2008. rates were already so low that it b State savings were calculated at about $29,000 per person diverted from prison and parole. would be difficult for them to divert more people from prison. Higher Performing Counties Received Larger Share of State Savings. Counties could receive a State Distributed an Average of $113 Million higher share of state savings if they had sufficiently Annually Through Original Formula. The low failure-to-prison rates (meaning that they sent legislation specified that the original formula would fewer people on felony probation to prison). Figure 3 sunset in January 2015. However, as we discuss shows the grant amounts that the example counties later, this formula was only used in 2011-12 and in Figure 2 would have received under the original 2012-13. The first payments made under the original SB 678 formula. Counties with failure-to-prison SB 678 formula were in 2011-12 and based on how rates near or below the statewide average—known counties performed in 2010. The average county as Tier 1 counties—received 45 percent of the award was about $1.5 million for a total allocation savings they generated for the state. The remainder of $89 million. In 2012-13—the last year the original of counties that generated savings for the state— formula was used—the average county award was known as Tier 2 counties—received 40 percent $2.4 million for a total allocation of $138 million. of the savings. Alternatively, counties with very Over these two years, the program distributed a low failure-to-prison rates—more than 50 percent total of about $227 million in grant awards. below the statewide average—could each receive Figure 3 Example of County Award Amounts Under Original SB 678 Formula County A County B County C Grant Type Eligibilitya Tier 2 Tier 1 Tier 1 or High Performanceb Tier Grant Amountc $2,900,000 $1,957,500 $39,150 High Performance Grant Amountd Ineligible Ineligible $50,000 County Award Amount $2,900,000 $1,957,500 $50,000 a Counties with failure-to-prison rates up to 25 percent above the statewide failure rate were eligible for Tier 1. All other counties that diverted people from prison were eligible for Tier 2. Counties with failure-to-prison rates more than 50 percent below the statewide average were eligible for high-performance grant awards. b Counties cannot receive both a tier grant and a high-performance grant, they choose one. c Tier 1 counties receive 45 percent of state savings they create. Tier 2 counties receive 40 percent of state savings they create. d High-performance grants are estimated as 5 percent of statewide savings divided between high-performing counties based on their proportionate share of the population of adults 18 to 25. 10 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Sentencing Changes Affecting different ways. On the one hand, the reduction in Probation Following SB 678 the size of the felony probation population could have artificially reduced grants by reducing the Since the enactment of SB 678, the state has number of people probation departments could implemented various sentencing changes that divert from prison. On the other hand, it could impacted probation in significant ways. The most have artificially increased grants. For example, notable changes were the 2011 public safety if the remaining people on felony probation had realignment and Proposition 47 (2014). As we higher rates of success, county grant rates would discuss in the subsequent section, the original have artificially increased. Either case would be SB 678 formula was modified to account for the problematic as award amounts would be changing expected impacts of these sentencing changes. for reasons unrelated to county performance. 2011 Public Safety Realignment Reduced Eligibility for Prison. The 2011 public safety SB 678 Formula Modified to Account for realignment made fewer people eligible for prison Sentencing Changes by shifting responsibility for lower level offenses The SB 678 formula has been frequently modified from the state to counties. Specifically, as a result of since it was first implemented in response to the realignment, generally only people with current various sentencing and policy changes, such as the or prior felony convictions for serious, violent, or sex 2011 public safety realignment and Proposition 47. offenses could be admitted to prison. This meant These changes were made in an attempt to prevent that people on felony probation could only be sent county grant awards from changing for reasons to prison for violating the terms of their supervision discussed above unrelated to performance. Below, if they were on felony probation for a prison-eligible we discuss those modifications and the funding that offense and/or committed a new prison-eligible has been distributed under the modified versions of offense while on probation. the SB 678 formula. Impact of Realignment on SB 678 Grant Formula Temporarily Modified for 2013-14 Formula. The 2011 public safety realignment’s and 2014-15. In an attempt to adjust for the effects limit on who can be placed in prison was expected of the 2011 public safety realignment, legislation to artificially increase SB 678 grants to counties was enacted to modify the original SB 678 formula beginning in 2013-14, the third year of the formula’s for 2013-14 and 2014-15 to (1) reflect that fewer implementation. This would be problematic people on felony probation could now be sent as the increase would have been unrelated to to prison and (2) reward counties when they county performance. successfully send fewer people on felony probation Proposition 47 Converted Various Felonies to prison and jail (rather than just to prison as in the to Misdemeanors. Proposition 47, which was original formula). Separate legislation also changed approved by voters in November 2014, changed the amount of funding awarded to counties for certain crimes from felonies to misdemeanors and each person diverted from prison or jail to about allowed for the resentencing of people currently in $27,000 beginning in 2014-15 to reflect the costs state prison for crimes affected by the measure. of contract beds the state was using at the time As a result, Proposition 47 made fewer crimes to house some people in prison. The original eligible for prison and fewer people eligible for formula used $29,000 for each person diverted felony probation. Because Proposition 47 reduced which reflected the state cost of housing people in the total population of people on felony probation, state-operated prisons and associated parole costs it reduced the number of people probation rather than contract beds. departments could divert from prison. Formula Permanently Modified in 2015-16. Impact of Proposition 47 on SB 678. The Due to (1) the original formula sunsetting in changes made by Proposition 47 were expected January 2015 and (2) the major sentencing changes to affect the SB 678 grant allocations in 2015-16, affecting probation that were implemented since the fifth year of the formula’s implementation, in the enactment of SB 678, the Legislature passed www.lao.ca.gov 11 AN LAO REPORT Chapter 26 of 2015 (SB 85, Committee on Budget failure-to-prison rates higher than 7.9 percent and Fiscal Review). Specifically, SB 85 modified would not receive funding under this first the formula by incorporating the new county felony component. This component is intended to supervision populations created by the 2011 (1) incentivize counties to reach a rate that public safety realignment (PRCS and mandatory is below this baseline and (2) ensure that a supervision) and creating a new methodology county that is already below the baseline will for allocating funds to counties, while attempting continue to receive funding even if it is not to preserve the incentive for counties to reduce able to further reduce its failure-to-prison rate. prison commitments. Under the SB 85 revisions, • Component 2: Funding for Reducing the formula now has three key components but is County Felony Supervision still generally referred to as the SB 678 formula. Failure-to-Prison Rate Below Prior Year. Similar to the original formula, DOF and Judicial The second funding component compares Council are required to annually analyze the data a county’s most recent annual county felony collected from probation departments to establish supervision failure-to-prison rate with its rate county payments. The new formula consists of the from the previous year. If the failure-to-prison following three components: rate is lower than the previous year, the • Component 1: Funding for Reducing county receives 35 percent of the estimated County Felony Supervision state savings associated with that reduction, Failure-to-Prison Rate Below Baseline. which was estimated to be $36,600 per The first funding component compares a person diverted, based on the state’s annual county’s felony supervision failure-to-prison costs to incarcerate people in a contract rate (meaning the rate that people on felony facility at the time. (The cost of contract beds probation, PRCS, and mandatory supervision was used because, at the time, increases are sent to state prison) to the statewide or decreases in the prison population average felony probation failure-to-prison rate resulted in increases or decreases in the between 2006 to 2008, which is 7.9 percent. number of contract beds used by the state.) Depending on how the county’s rate compares Figure 4 to this baseline rate, the county will receive between Component 1 Provides County Awards 40 percent and 100 percent Based on Current Performance and Previous of the highest payment Highest Grant Award Amount received between 2011-12 Percentage of Previous Highest Grant Amount Received and 2014-15. For example, as shown in Figure 4, if a 100% county’s felony supervision failure-to-prison rate is below 70% 1.5 percent, the county 60% will receive 100 percent of 50% its highest prior payment. 40% However, if a county’s felony supervision failure-to-prison rate is above 6.1 percent but not higher than 7.9 percent, the county will receive 7.9% 6.1% 5.5% 3.2% 1.5% 0% 40 percent of its highest (Statewide Baseline) prior payment. Counties with County Felony Supervision Failure-to-Prison Rate county felony supervision 12 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT For example, in 2020-21, a county with a • Reduced Probation Terms Under failure-to-prison rate lower than the previous Chapter 328 of 2019 (AB 1950, Kamlager). year received about $12,800 for each Chapter 328 reduced maximum probation additional person diverted relative to the terms from five years to two years. The change previous year under this component. This likely affected probation failure-to-prison second component is intended to incentivize rates. In particular, data show that people on counties to continue to reduce their felony felony probation generally become less likely supervision failure-to-prison rates each year. to be sent to prison over time and, by reducing The funding that counties receive under maximum probation terms, Chapter 328 Component 2 is in addition to the amount removed people from felony probation who received under Component 1. are less likely to be sent to prison while • Component 3: Funding to Guarantee retaining people who are more likely to be sent $200,000 Minimum Award. The third funding to prison. Absent the temporary hold, grant component guarantees that each county awards could have been artificially reduced receives at least $200,000. If the total amount because people on felony probation that are that a county receives under Components more likely to fail would remain in the caseload 1 and 2 is less than $200,000, the county driving up failure-to-prison rates. will receive funding under Component 3 Due to concerns that the pandemic and to increase the total amount to $200,000. Chapter 328 would continue to impact grant This third component is intended to ensure all awards for reasons unrelated to performance, the counties receive a minimum amount of state 2022-23 and 2023-24 budgets continued to place funding for evidence-based practices. a temporary hold on the SB 678 formula and, New Formula Temporarily Put on Hold instead of reverting to the new formula, provided From 2021-22 Through 2023-24. From 2015-16 counties the same amount of funding they received through 2020-21, the state implemented the new in 2021-22. Absent any changes, the formula would SB 678 formula. However, as part of the 2021-22 have allocated $59.4 million (48 percent) more in budget, the formula was temporarily put on hold. 2021-22, $11.5 million (9 percent) less in 2022-23, Specifically, each county received their highest and $9.7 million (8 percent) less in 2023-24. SB 678 grant award from the prior three fiscal In 2024-25, the temporary hold on the formula will years (2018-19, 2019-20, or 2020-21), irrespective expire and the new formula will once again become of their performance. This action was taken due operative barring any further changes. to a concern that grant awards would fluctuate for State Distributed Average of $118 Million reasons unrelated to county performance. The two Annually Through Modified Formulas. major reasons this was a concern were: As shown in Figure 5 on the next page, starting in 2013-14, counties began receiving grant awards • COVID-19 Pandemic. Various policies under modified versions of the SB 678 formula. adopted in response to the COVID-19 Between 2013-14 and 2023-24, county probation pandemic could have artificially affected grant departments received $1.3 billion through awards. For example, many people on county SB 678, an average of $118 million annually. felony supervision were not admitted to The average county award over this time period was prison despite committing new prison-eligible $2 million annually. crimes because intake to prisons was halted to prevent the spread of the virus during the pandemic. This resulted in reduced county felony supervision failure-to-prison rates, which in turn would have artificially increased grant awards under the new SB 678 formula. www.lao.ca.gov 13 AN LAO REPORT Figure 5 Total Funding Provided to Counties Through SB 678 Grants (In Millions) $160 140 120 100 80 60 40 20 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 (Budgeted) Original SB 678 Modified Versions of SB 678 Formula Formula on Hold Formula ASSESSMENT Our review of the SB 678 grant program indicates SB 678 Initially Appeared to that the program appeared to effectively achieve its Achieve Its Goals various goals in the initial years of implementation. Prison Population and Crime Declined, However, we find that this might not still be the Resulting in State Savings in Initial Years. case. This is because (1) the effects of SB 678 on As previously mentioned, funding was first the prison population, crime, and state savings are provided to counties in 2011-12 based on their difficult to distinguish from other policy changes; performance in 2010. Thus, SB 678 provided (2) components of the current formula do not align an incentive for counties to reduce their felony with the original goals of the program; and (3) it is probation failure rates beginning in 2010. This is unclear whether counties are actually implementing notable as, following the implementation of SB 678, evidence-based practices, which is important the state prison population and crime declined. for achieving the goal of improving public safety. Specifically, the state prison population was about We also find that it is more challenging to use 168,000 in June 2009 compared to 162,000 in state savings to incentivize performance given June 2011 (a few months before the 2011 public the various sentencing changes affecting felony safety realignment). In addition, the violent crime supervision. However, there continue to be state rate in 2009 was about 470 violent crimes per benefits from supporting evidence-based practices 100,000 people and the property crime rate was at the local level. over 2,700 property crimes per 100,000 people, compared to about 410 violent crimes and 2,600 property crimes per 100,000 people in 2011. It is reasonable to think that SB 678 partially contributed 14 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT to these reductions. For example, data suggest New Formula Undermines Goal of Creating that SB 678 successfully diverted thousands of State Savings and Reducing Failure-to-Prison people from prison in the initial years. This not only Rates. The changes made to the SB 678 grant helped reduce the prison population but also could formula by SB 85 conflict with some of the key mean the people diverted from prison committed goals of the original program. Specifically, they fewer crimes than they otherwise would have. conflict with the program’s goals of achieving state Additionally, Judicial Council estimates that the savings and reducing prison commitments. This is diversion of these people from prison generated due to the following factors: hundreds of millions in state savings during this • Grants Through Component 1 Based on time period. Previous Grant Awards Instead of People Notable Increase in Reported Use of Diverted From Prison. As discussed earlier, Evidence-Based Practices. As previously Component 1 awards grants to counties mentioned, a key aspect of the SB 678 program based on a percentage of the county’s highest was to support evidence-based practices. Counties payment between 2011-12 and 2014-15. self-certify each year to Judicial Council that they There is little reason to think that the amount are spending their SB 678 funds on evidence-based of savings counties are currently creating for practices. These responses imply probation the state through their probation practices departments are implementing evidence-based is related to the grant amounts distributed practices statewide at substantially higher rates between 2011-12 and 2014-15. As such, it is than previously. Much of the increase in the use possible the state is paying some counties of these practices occurred in the initial years more than the state is saving through the of the formula’s implementation. For example, program by not directly awarding counties Judicial Council data show that the percentage of based on the actual number and rate of counties reporting use of evidence-based practices people a county diverted from prison. We find increased in all areas measured by the survey from that this prevents the state from maximizing 2011 to 2013. the program’s goal of achieving state savings. • Component 1 Baseline Rate Inconsistent Unclear on Extent to Which Program Is With Program Goals. The baseline Currently Achieving Its Goals failure-to-prison rate of 7.9 percent used Difficult to Distinguish Effects of SB 678 on in Component 1 is based on the average Prison Population, Crime, and State Savings probation failure-to-prison rates between From Other Policy Changes. The prison 2006 and 2008 when counties could revoke population and (in most years) crime continued to felony probationers to prison regardless decline after the initial implementation of SB 678. of whether they committed a new crime. However, because of the sentencing changes that However, since people on county felony were implemented—most notably the 2011 public supervision often can only go to prison for safety realignment—it is difficult to determine new, prison-eligible crimes, it no longer the extent to which the SB 678 grant program makes sense to compare current county contributed to these outcomes. For example, it felony supervision failure-to-prison rates to is difficult to assess whether reductions in the this probation failure rate. Typically, county number of people on county felony supervision felony supervision failure-to-prison rates sent to prison are the result of improvements in stay within 3 percent—much lower than the county supervision practices or simply the result historical probation failure-to-prison rates of fewer people being eligible for prison due to the used to calculate the baseline. This means 2011 public safety realignment and Proposition 47. counties with relatively poor performance can Given the challenge of disentangling the effects of still qualify for payment through Component 1. the SB 678 grants from the effects of other factors, We find that this is inconsistent with the goal the actual amount of state savings SB 678 currently of reducing prison commitments. In addition, creates is unclear. this prevents the state from maximizing state www.lao.ca.gov 15 AN LAO REPORT savings as it can result in the state paying Unclear Whether All Practices Adopted by some counties more than what they are Counties Are Evidence Based. While Judicial actually saving. Council’s surveys show initial increases in reported • Estimated Savings of Component 2 use of evidence-based practices, Judicial Council No Longer Reflective of State Savings. does not monitor whether counties are actually Counties currently receive $12,800 for each using evidence-based practices. In addition, person diverted from prison—35 percent of there are no required audits or assessments of the $36,600 DOF estimates the state saves the practices counties are using. This makes it for each person diverted. However, based on difficult for the Legislature to assess whether limited data on marginal costs and average counties that report funding evidence-based length of stay in prison and on parole, we practices and programs are in fact doing so. This is estimate the state saves about $73,000 for concerning given one of the goals of the program is each person diverted from prison, which could to improve public safety by incentivizing the use of translate to $25,500 in savings passed on to these practices. counties at rate of 35 percent. This suggests Using State Savings to Incentivize that the state may be paying counties less Performance Is More Challenging Given than originally intended because the full amount of state saving including parole costs Recent Policy Changes are not included in the calculation, which Performance-Based Funding Creates could be weakening the incentive for counties an Incentive for Success. Generally, basing to reduce their failure-to-prison rate. allocations to county probation departments • Component 3 Disconnects Actual on performance is a worthwhile goal when the State Savings From Performance. The performance can be accurately measured and minimum guarantee of $200,000 to counties there are minimal outside factors affecting the undermines the goal of generating state outcomes. In such cases, performance-based savings and reducing prison commitments. funding can affect the behavior of departments in This is because a county could continue to ways that benefit the state. For example, county receive SB 678 funds despite not diverting probation departments historically responded to anyone from prison. This disconnects actual the incentives created by SB 678 by finding ways state savings from performance, thereby through evidence-based practices to reduce providing little incentive for improvement for the rate at which people commit new crimes some counties with lower performance. and are sent to prison, such as by conducting risk and needs assessments to effectively target Expansion in Evidence-Based Practices rehabilitation programs at those most in need of Has Stalled. As discussed above, reports them. This resulted in improvement in outcomes indicate that county probation departments which provided counties with additional resources initially expanded their use of evidence-based to make further improvements while also creating practices. However, in recent years, increases savings for the state. in the reported use of evidence-based practices Policy Changes Can Affect Grant Awards have stalled. For example, the reported percent in Problematic Ways. A drawback of a use of validated risk and needs assessments—a performance-based formula for the SB 678 key evidence-based practice—only increased by program is that policy changes (such as 7 percentage points between 2014 and 2021 and Chapter 328 or the 2011 public safety realignment) some counties were not using such assessments can cause fluctuations in grant amounts for reasons for all of their supervised population as of 2021. unrelated to performance. This is problematic This suggests that the program may no longer be because it undermines the goals of the program effectively incentivizing counties to expand their use in various ways. First, it undermines a county’s of evidence-based practices. incentive to improve its failure-to-prison rate 16 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT because its grant award may increase or decrease State Benefits by Continuing to Provide despite there being no corresponding change in Funding for Evidence-Based Practices performance. Second, if grant amounts increase Evidence-Based Practices Support Positive for reasons unrelated to performance, it means Outcomes. For a program to be evidence-based, it the state is paying counties regardless of whether must be shown in an evaluation that the intervention their actions create savings for the state. Finally, improved outcomes of various metrics, which if grant amounts decrease for reasons unrelated can include crime or recidivism. That means that to performance, counties receive less funding evidence-based practices are supported by the for evidence-based practices to sustain their best information available on what works to improve performance. A reasonable way to still achieve outcomes. In the case of probation programs, these the benefits of performance-based funding improved outcomes often provide benefits to the despite the policy changes affecting probation state either directly or indirectly, such as reductions is by establishing a new formula with a baseline in crime or spending on prisons. Spending on that reflects the changes. For example, this could evidence-based practices can also ensure the state be done by comparing current county felony is spending funds in ways that are cost-effective supervision failure-to-prison rates to a new baseline instead of investing resources into practices that based on county felony supervision failure-to-prison may not yield any benefits. However, these benefits rates that occurred after the policy changes took can only be achieved if the practices supported effect. This would reduce the extent to which the are actually evidence based. Accordingly, it is also measure of a county’s performance is affected by important for the state to ensure that the programs the policy changes. counties support with their funds are in fact Constantly Adjusting Formula to Account for evidence-based practices. Policy Changes Can Be Problematic. The heavy Reducing Funding for Evidence Based reliance on performance measures that fluctuate Practices Could Increase State Costs. As for reasons unrelated to performance creates the discussed above, one way of addressing many need to constantly modify the funding formula, of the weaknesses of the existing SB 678 grant such as by putting the formula on hold or changing formula is by establishing a new formula with a the formula in a way that accounts for a new policy baseline that reflects the various policy changes impacting the county felony supervision population. affecting probation. However, SB 678 grant This can be problematic as it makes it difficult for awards would likely decline significantly with such counties to know how grants will be calculated in a change. This is because the failure-to-prison the future. As a result, counties can be reluctant rate of people on county felony supervision is now to invest in evidence-based practices that require lower than the years prior to the implementation ongoing funding since they lack the ability to of SB 678, meaning counties may not be able to predict how such spending will affect future grant further reduce the number of prison commitments amounts or whether funding for those programs to generate significant award amounts. This in will continue to be available when policies change turn could reduce the funding available for their performance and grant awards. It also has evidence-based practices. To the extent counties the potential to weaken the incentive for counties are using SB 678 grants to fund evidence-based to reduce prison commitments as counties do practices that successfully reduce prison not know how prison commitments will affect commitments, reductions in this funding could their grant allocations if the formula is subject to be problematic. This is because reductions in constant change. funding for evidence-based practices could lead to increased crime and state costs if probation departments are no longer able to fund practices that successfully prevent crime and reduce prison commitments. Such an increase in state cost would also run counter to the program’s goal of creating state savings. www.lao.ca.gov 17 AN LAO REPORT RECOMMEND NEW FUNDING FORMULA In view of our above findings, we recommend that fully reflect all of the policy changes that the Legislature establish a new formula for the have impacted the county felony supervision SB 678 program to better ensure that the program’s failure-to-prison rate and do not reflect goals—reducing the county felony supervision other factors that could have temporarily failure-to-prison rates, creating state savings, affected the rate for reasons unrelated to and improving public safety—are achieved. performance (such as the effects of the Specifically, we recommend creating a new COVID-19 pandemic). One option is choosing formula with two portions: (1) a portion based on an average of the county felony supervision direct measures of performance and state savings failure-to-prison rates that occur in 2022 and (2) a portion designed to pay for specific and 2023 as the baseline, if no additional evidence-based practices. policy changes are implemented that would significantly affect the supervision First Portion of Formula: failure-to-prison rate. The rationale for Provide Funding Directly Tied to these two years is that the effects of County Performance Chapter 328 would likely be fully reflected and the COVID-19 pandemic would likely Award Counties for Reducing County Felony no longer be significantly affecting county Supervision Failure-to-Prison Rate. First, felony supervision failure-to-prison rates. we recommend awarding grants to counties for The Legislature could choose to update the diverting people on county felony supervision baseline to account for any significant policy from prison, similar to the way the original SB 678 changes affecting probation in the future. formula awarded counties for diverting people The Legislature could determine whether this on felony probation from prison. Specifically, is necessary on a regular basis. based on a county’s baseline felony supervision failure-to-prison rate and its county felony • Decide What Percentage of State Savings supervision population, an estimate of the number to Transfer to Counties. There is a trade-off of people the county is expected to send to prison to consider in deciding what percentage of each year would be calculated. If the actual number state savings to transfer to counties. A higher of people sent to prison in a given year is less than percentage provides greater incentive and this estimate, the county would receive a portion resources to the counties to reduce prison of the state savings for each person diverted from commitments but reduces the amount of prison. State savings would be based on annual state savings achieved. A lower percentage estimates of the cost of state prison and parole, does the opposite. Determining how much which we currently estimate to be about $73,000. of the state savings should be shared with This approach would allow the state to more the counties ultimately depends on how the effectively achieve the program’s goals of reducing Legislature weighs the goal of achieving state the failure-to-prison rate, creating state savings, savings versus reducing prison commitments. and improving public safety. Historically, the percentage of state savings that has been passed on to counties has been Key Steps for Implementation. To implement between 35 percent and 45 percent. this portion of the formula, the Legislature will want to take the following steps: • Establish Baseline. In selecting a new baseline rate, a key consideration is what year or years should be used. We recommend that the new baseline be based on years 18 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT Second Portion of Formula: Provide for them. Counties that have not done so Additional Grants for Specific would need to adopt them to continue to receive funding. This would make it more Evidence-Based Practices likely that counties are using the funds in Ensuring Sustainable Funding to Reduce ways that improve public safety, reduce Prison Commitments. If the state only provides prison commitments, and yield net benefits funding based on performance as we recommend to the state—consistent with the goals for the first portion, then SB 678 grant awards of the SB 678 program. We note that the would likely decline significantly. This is because Board of State and Community Corrections the new baseline would be based on current (BSCC) regularly convenes groups of county felony supervision failure-to-prison rates criminal justice experts to make grant that tend to be around 3 percent—much lower than allocation recommendations. Accordingly, we the historical felony probation failure-to-prison recommend that the Legislature task BSCC rate baseline of 7.9 percent—meaning counties with this responsibility. may not be able to further reduce the number of • Estimate Level of Savings and Award prison commitments to generate significant award Amount for Each Evidence-Based Practice. amounts. Moreover, this reduction would be even Only paying for the evidence-based practices more difficult to achieve for counties that have that generate savings for the state from already successfully implemented evidence-based people diverted from the prison system is practices as such counties could have little room ideal. However, it is difficult to know the direct for improvement. Such a reduction in funding could impact of an evidence-based practice on each be problematic if it results in counties that have person diverted. Estimating the state savings relied on the SB 678 funding for evidence-based of each practice or program is the next best practices spending less on such practices that alternative. Therefore, we suggest providing successfully reduced prison commitments. a county funding for each evidence-based As such, we recommend also providing counties practice based on a portion of the expected with funding for using specific evidence-based savings the practice would generate for the practices likely to generate net savings for the state. We note that research on the fiscal state. This second portion of our proposed funding effect of numerous evidence-based practices formula would provide sustainable funding to is already available from a variety of sources, probation departments to support such practices. such as the Pew-MacArthur Results First Key Steps for Implementation. When Initiative. (For more on the Pew-MacArthur developing the second portion of the new formula, Results First Initiative, see the box on the next the Legislature will want to take the following steps: page.) We recommend the Legislature direct • Identify Practices to Be Funded. We BSCC to collaborate with experts to use such recommend that a group of experts, such research to estimate the amount of savings as criminal justice academic researchers likely to be created by each evidence-based and staff at county probation departments practice identified in the previous step. successfully implementing and evaluating The Legislature could then determine what evidence-based practices, be convened portion of the cost of the practice would to identify evidence-based practices that be covered through the grant by weighing are likely to reduce the number of prison its preference for expanding the use of commitments from the county felony evidence-based practices against its interest supervision population. Only these identified in creating state savings. evidence-based practices would be eligible • Establish Total Amount for Grant and for funding through this portion of the grant. Determine Allocation. The Legislature would Counties that have already adopted these need to establish the total amount it is willing practices would continue to receive funding to spend on additional grants for specific www.lao.ca.gov 19 AN LAO REPORT Pew-MacArthur Results First Initiative Results First Identifies Cost Savings Associated With Evidence-Based Practices. The Pew-MacArthur Results First Initiative works with states and other governmental entities to identify cost-effective government practices, including those in criminal justice, such as probation supervision practices. For example, the Results First Initiative has developed an inventory of practices that have been evaluated in various states and cities and have been shown to reduce recidivism. Results First uses these evaluations to calculate the potential fiscal effects of implementing the practice in the jurisdictions it works with. These estimates (1) assume the practices will have the same effect on recidivism in the jurisdiction as they did when implemented elsewhere and (2) estimates the potential costs and benefits of each practice based on how much it costs and the jurisdiction-specific costs associated with recidivism (such as prison and jail operational costs). Some California Probation Departments Have Already Partnered With Results First. Some probation departments in California have already partnered with Results First to complete some of this work. Notably, the Santa Cruz County Probation Department partnered with Results First between 2014 and 2018 and was able to calculate estimated savings of the different programs it could offer to people on supervision. As a result, the county has made decisions on which programs would yield the most benefits. This led the department to rebid its contracts for community-based services and include language in the contracts that prioritized funding for effective evidence-based programs. evidence-based practices and determine a compliance with the selected evidence-based county allocation formula. The Legislature practices and to ensure outcomes at could consider setting this amount such the local level are regularly evaluated. that the two portions of the grant would This could include conducting site visits be roughly similar to the amount provided and assessments of fidelity, ensuring in the past three budget years—roughly counties devote funds to evaluating the $120 million annually—in order to ensure effectiveness of those practices implemented, counties do not need to reduce funding for providing technical assistance, as well as evidence-based practices. One option for making recommendations to the county for a formula allocation would be to base each improvement. Given its existing responsibilities county’s maximum share of funds on the in working with county probation departments, overall county felony supervision population. BSCC is well positioned to take on this role. A county would then receive an award for each The BSCC budget would have to increase evidence-based practice it has implemented, to account for its new duties related to the up to the maximum award amount. grant. We estimate that this could require a • Establish Oversight on Use of few million dollars annually. We note that this Evidence-Based Practices. To improve amount could be paid from the state savings oversight of the program, we recommend created by the program. the Legislature require BSCC, which is Under our recommended formula, funding responsible for promoting effective state and awarded would remain stable so long as counties local corrections efforts, to have an oversight maintain the same evidence-based practices. role of the program. Specifically, BSCC would be required to audit counties to ensure 20 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT CONCLUSION The Legislature established the SB 678 program on hold, it will revert to a formula that appears to to reduce failure-to-prison rates for those on county run counter to the program’s goals. This presents felony supervision, create state savings, and an opportune time for the Legislature to revisit improve public safety. Under the program, these the formula entirely. As such, we recommend goals would be achieved by distributing a portion of the Legislature establish a new formula which state savings to support the use of evidence-based would (1) award funding to counties based on practices. However, significant changes to direct measures of performance and the level of probation and modifications to the formula over the state savings they create and (2) award funding to years have made it unclear whether the program counties for their use of specific evidence-based continues to achieve those goals. For example, practices. This, as well as establishing additional as a result of pandemic-related and other policy oversight mechanisms of the program, would better changes, the formula has been put on hold until ensure the program is effectively achieving its 2024-25. Moreover, once the formula is no longer intended goals. www.lao.ca.gov 21 AN LAO REPORT 22 LEGISLATIVE ANALYST’S OFFICE AN LAO REPORT www.lao.ca.gov 23 AN LAO REPORT LAO PUBLICATIONS This report was prepared by 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. 24 LEGISLATIVE ANALYST’S OFFICE