The 2025-26 Budget: Judicial Branch

2025-26 BUDGET The 2025-26 Budget: Judicial Branch GABRIEL PETEK | LEGISLATIVE ANALYST | FEBRUARY 2025 SUMMARY In this brief, we provide an overview of the proposed funding for the judicial branch in 2025-26. We also analyze the Governor’s budget proposals to increase discretionary funding to the trial courts and start a capital outlay project to construct the new Tracy Courthouse in San Joaquin County. Consider Trial Court Augmentations in Context of Broader Budget Challenges. The Governor’s budget proposes an $82 million ongoing General Fund augmentation to discretionary trial court operations funding—$42 million for a partial restoration of an ongoing 2024-25 reduction and $40 million for increased costs. On the one hand, the increased trial court funding would likely help improve court service levels—a notable benefit. On the other hand, the multiyear deficits facing the state leave no capacity for new ongoing commitments, meaning any additional funding provided would likely require reduced spending for other existing state programs. As such, the Legislature should weigh this augmentation against its other budget priorities. It should also consider whether it would like to specify priorities for how any provided funding is used. Modify Proposed Budget Bill Language Authorizing Transfer of Unrestricted Trial Court Trust Fund (TCTF) Monies to General Fund. We recommend the Legislature modify the proposed budget bill language authorizing the transfer of unrestricted TCTF fund balance monies to the General Fund to increase legislative oversight and potentially improve the state’s General Fund budget condition. First, we recommend specifying what monies should be considered for transfer or how the transfer should be calculated. Second, we recommend requiring advanced legislative notification of transfers that include information on how the transfer amount was determined. Consider Redirecting Funding for New Tracy Courthouse to Other Trial Court Projects. The Governor’s budget proposes $2.9 million one-time General Fund to start a capital outlay project to construct a new courthouse in Tracy. While this project would benefit residents in San Joaquin County, it would also expand service beyond the court’s existing facilities. Given the extensive unmet judicial branch facility needs at existing locations, the Legislature could consider redirecting the funding to projects that address needs at facilities that are currently in use or pressing deferred maintenance needs. This would focus resources on facilities with the most pressing unsafe conditions for current staff and court users. www.lao.ca.gov 1 2025-26 BUDGET OVERVIEW Background 2015-16 to a high of 59 percent 2023-24, before decreasing slightly to 53 percent in 2024-25. Roles and Responsibilities. The judicial Since 2019-20, the majority of the judicial branch branch is responsible for the interpretation of budget has been supported by the General Fund. law, the protection of people’s rights, the orderly This growth is due to various reasons, including settlement of all disputes, and the adjudication increased operational costs as well as General of accusations of legal violations. The branch Fund resources to backfill decreases in fine and fee consists of statewide courts (the Supreme Court revenue. (These figures do not reflect a Governor’s and the Courts of Appeal), trial courts in each 2025-26 proposal to increase funding for the trial of the state’s 58 counties, and state entities of courts by $42 million annually beginning in 2024-25, the judicial branch (Judicial Council, Judicial which is discussed in greater detail below.) Council Facility Program, and the Habeas Corpus Resource Center). The branch receives support Trial Courts Report $478 Million in Reserves from several funding sources including the state at End of 2023-24. Trial courts have a limited General Fund, civil filing fees, criminal penalties and ability to keep and carry over any unspent funds fines, county maintenance-of-effort payments, and (also known as “reserves”) from one fiscal year to federal grants. the next. Specifically, trial courts are only allowed to carry over funds equal to 3 percent of their Majority of Support From General Fund. As operating budget from the prior fiscal year under shown in Figure 1, total operational funding for the current law. However, certain funds held in the judicial branch has steadily increased from 2015-16 reserve—such as those that are encumbered, through 2024-25. The percent of total operational designated for statutory purposes, or funds held funding from the General Fund has also steadily on a court’s behalf by Judicial Council for specific increased during this period—from 44 percent in projects—are not subject to this cap, meaning they Figure 1 Total Judicial Branch Fundingª (In Billions) $6 Local Revenues 5 State Special Funds General Fund 4 3 2 1 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 (estimated) (proposed) a State law requires excess property tax revenues collected by county offices of education beyond their annual funding allotment be used to offset state General Fund support of trial courts. This chart reflects these revenues as state special funds. 2 LEGISLATIVE ANALYST’S OFFICE 2025-26 BUDGET also can generally be carried over. At the end of of Education (COE). A primary source of funding 2023-24, trial courts reported having $478 million in for COEs is the Local Control Funding Formula reserves. Of this amount, $389 million (81 percent) (LCFF). This formula provides an allotment based is not subject the cap. This amount consists of on (1) the number and size of the school districts in funds that are encumbered ($204 million), statutorily the county and (2) the number of students attending excluded ($118 million), designated for prepayments COE alternative schools. A COE’s annual LCFF or other purposes ($43 million), or held by Judicial allotment is supported first with local property tax Council on behalf of the trial courts for specific revenue (which can fluctuate from year to year), projects ($24 million). This leaves $88 million with the remainder covered by state Proposition 98 (19 percent) in reserves subject to the cap. This is General Fund. Some COEs collect more in property less than the $105.9 million the trial courts could tax revenue than their LCFF allotment. This amount have retained under the current 3 percent cap. collected above the LCFF allotment is known as excess property tax. State law requires any excess Governor’s Proposal property tax be used to offset state General Fund Governor Proposes $5.3 Billion in State support of trial courts in the year after the taxes Funds for Judicial Branch. For 2025-26, the were collected. For example, excess property taxes Governor’s budget includes $5.5 billion from all collected in 2023-24 offset the state’s General fund sources to support the judicial branch. This Fund support of trial courts in 2024-25. The amount includes $5.3 billion from all state funds Governor’s budget estimates that $247.6 million in (General Fund and special funds), an increase of excess property tax will be available to offset state $62 million (1 percent) above the revised amount General Fund support of trial courts in 2024-25 and for 2024-25, as shown in Figure 2. (These totals do in 2025-26. Our preliminary analysis of property not include expenditures from local revenues or trial tax revenues projects less excess property tax court reserves.) Of this amount, about $3.1 billion revenues being available than assumed in the (59 percent) is from the General Fund. This is a net Governor’s budget. Specifically, we estimate that increase of $254 million (9 percent) from the revised roughly $100 million less—about $70 million in 2024-25 General Fund amount. This net increase 2024-25 and at least $30 million in 2025-26—will reflects various changes—including the expiration be available to offset General Fund support of of a one-time reduction in General Fund support trial court operations. Under our estimates, the included in the 2024-25 budget to help address the Legislature would have higher General Fund costs state’s budget problem. than assumed in the Governor’s budget. Our office will review updated property tax data that will LAO Comment become available in the spring and provide updated Administration Likely Overestimates Excess estimates at the time of the May Revision. Property Tax Available for General Fund Offset. Each of California’s 58 counties has a County Office Figure 2 Judicial Branch Budget Summary—All State Funds (Dollars in Millions) Change From 2024-25 2023-24 2024-25 2025-26 Actual Estimated Proposed Amount Percent State Trial Courts $3,840 $3,957 $3,985 $28 0.7% Supreme Court 50 59 57 -2 -3.4 Courts of Appeal 284 291 297 6 2.1 Judicial Council 310 328 292 -36 -11.0 Judicial Branch Facility Program 576 596 662 66 11.0 Habeas Corpus Resource Center 19 20 20 — -0.1 Totals $5,078 $5,251 $5,313 $62 1.2% www.lao.ca.gov 3 2025-26 BUDGET TRIAL COURT DISCRETIONARY FUNDING Background on each court’s workload as measured by various factors, including the number and type of filings the Augmentations to Trial Court Operations court receives. This amount is known as a court’s Funding Provided in Different Ways. The state’s workload formula identified need. The formula annual budget typically designates the bulk of then calculates the level of funding each trial court funding available to fund trial court operations. actually received as a percentage of its workload In recent years, funding adjustments have generally formula identified need. This amount is known as been provided by the state through the approval of the court’s funding ratio. Each court’s funding ratio (1) discretionary (or unallocated) funding increases, is then compared to the statewide funding average. (2) funding to support specific cost increases to Different rules related to the workload formula maintain existing service levels (such as funding for adopted by Judicial Council are then used to increased trial court health benefit and retirement determine the specific allocations of discretionary costs), and (3) budget requests for specific funding to trial courts. For example, trial courts priorities (such as increased funding to implement whose funding ratio is above the statewide funding enacted legislation). average—meaning they are comparatively better Trial Courts Generally Have Discretion in funded than their fellow courts—may receive a How to Use Their Operations Funding. While a smaller proportion of funding increases or a greater portion of trial court operations funding is provided proportion of funding reductions than those below for specific programs or purposes (such as court the statewide funding average. interpreters), a significant portion of the funding TCTF Is the Primary Special Fund Supporting is provided on a discretionary basis with little Trial Court Operations. The TCTF is the major to no restrictions on its use. Upon receiving its special fund supporting trial court operations. allocation, each trial court has significant flexibility It receives revenues from various sources— in determining how its share of discretionary including the state General Fund, civil filing fees, funding from the state is used. This can result in criminal penalties and fines, as well as county significant difference in the programs or services maintenance-of-effort payments—for various offered and the level of service provided across purposes. For example, one specific allocation is trial courts. For example, some trial courts may a General Fund backfill to address declines in fine choose to use a greater proportion of their funding and fee revenue deposited into the fund in order to to increase employee compensation, while others maintain trial court funding levels. This backfill has might allocate more funding to provide additional been provided annually since 2014-15. The specific services, such as self-help services. backfill amount varies annually, but is typically Judicial Council Generally Determines How calculated by comparing each year’s revenue to Allocate Operations Funding to Trial Courts. against the amount collected in 2013-14. Another Absent state direction on the allocation of funding, example is General Fund provided to support the Judicial Council—the policymaking and governing cost of trial court judge salaries. body of the judicial branch—is responsible for Some Unspent TCTF Funds Are Restricted allocating funding to individual trial courts. Judicial to Certain Uses. In some cases, when TCTF Council has developed various methodologies to funds go unspent, they do not remain in the allocate such funding. One common formula— TCTF fund balance. For example, the budget bill known as the “workload formula”—is typically includes specific language directing unspent funds used for the allocation of discretionary funding associated with $30 million General Fund provided changes. This workload formula calculates how to increase the number of court reporters in family much funding Judicial Council believes each trial and civil law cases revert to the General Fund. In court should receive. This estimated need is based other cases, certain unspent TCTF funds—such as 4 LEGISLATIVE ANALYST’S OFFICE 2025-26 BUDGET unspent court interpreter funds—remain in the fund 2024-25 budget did not include a discretionary balance, but are restricted to the purpose for which funding increase to help address growth in the funds were originally provided. operational costs. (However, as in past years, the Unrestricted TCTF Fund Balance Monies Can state provided separate General Fund support Be Used in Various Ways. All other unspent funds specifically to cover increased trial court health and that remain in the TCTF balance are unrestricted. retirement benefit costs.) While the trial courts are Examples of such funds include salary savings not entitled to a discretionary funding increase to associated with trial court judges and excess address increased operational costs, the state has General Fund backfill dollars that are unneeded provided such funding in 2021-22 (a 3.7 percent when fine and fee revenues deposited into the increase), 2022-23 (a 3.8 percent increase), and TCTF are higher than originally estimated. Statute 2023-24 (a 3 percent increase). generally requires that these funds remain in the Governor’s Proposal TCTF fund balance unless used for the benefit of the trial courts. For example, the budget bill Provides $82 Million Discretionary Funding authorizes the Department of Finance (DOF) to Increase. The Governor’s 2025-26 budget includes two proposals that increase trial court discretionary use these funds to augment the amount available funding. The two proposals are as follows: for trial court operations funding, if additional resources are available in the fund, subject to • $42 Million Ongoing Funding Restoration. 30-day notification to the Joint Legislative Budget As noted above, the 2024-25 budget Committee (JLBC). Additionally, the state can use included an ongoing $97 million reduction unrestricted TCTF fund balance monies to benefit in General Fund support for trial court the General Fund to a certain extent. For example, operations. The Governor’s 2025-26 budget the 2024-25 budget package decreased proposes to provide a $42 million ongoing General Fund support for trial court operations funding restoration—beginning in 2024-25— by $100 million on a one-time basis and used effectively making the ongoing reduction unrestricted TCTF fund balance monies to fully $55 million. The administration proposes to offset this reduction. use unrestricted TCTF fund balance monies to 2024-25 Enacted Budget Included pay for the restoration in 2024-25. The General Reductions to Trial Court Operations Funding. Fund would then pay for the restoration in To help address the state’s budget problem, the 2025-26 and ongoing. These higher costs are 2024-25 budget package assumed that ongoing not currently reflected in the budget materials General Fund state operations expenditures submitted to the Legislature—such as the for many state agencies would be reduced by budget bill or the detailed judicial branch up to 7.95 percent beginning in 2024-25. How budget display. Our understanding is that it such reductions were to be achieved—and the will be incorporated during the May Revision. actual amount achieved—were generally left to • $40 Million Ongoing General Fund departments and DOF through a process laid out Discretionary Funding for Increased Costs. in Control Section 4.05. Support for trial court The Governor’s budget proposes a $40 million operations is considered local assistance rather ongoing increase in discretionary funding from than state operations. Accordingly, it was not the General Fund to help pay for increased trial covered by Control Section 4.05. However, to be court operation costs beginning in 2025-26. consistent with the statewide reduction, the budget (This augmentation is reflected in the budget package included a $97 million (or 7.95 percent) materials submitted by the administration.) ongoing General Fund reduction to trial court Unlike prior years in which such funding was operations to be implemented at the judicial provided, a specified percentage increase branch’s discretion. However, unlike the Control (such as a 3.8 percent increase in 2022-23) Section 4.05 reductions, there was no discretion was not used to determine the amount of to adjust the size of the reduction. Additionally, the this augmentation. www.lao.ca.gov 5 2025-26 BUDGET Proposes Budget Bill Language for Transfer fully restore staffing levels. Such increased costs of Unrestricted TCTF Monies to General Fund. could also constrain the ability of courts to pay for The Governor’s proposed 2025-26 budget includes infrastructure, IT, or other fixed costs that could budget bill language to authorize DOF to transfer improve the delivery of court services. any unrestricted TCTF fund balance monies to the Administration and Judicial Branch Already General Fund in consultation with Judicial Council. Implementing 2024-25 Funding Restoration... The administration and judicial branch are already Assessment in the process of implementing the restoration Restoration Likely to Improve Court Service of $42 million in trial court operations funding in Levels… The ongoing $97 million reduction has 2024-25. The restoration initially moved forward been operationalized by trial courts in various as the judicial branch believed that the provisions ways. These include hiring freezes, furloughs, and of Control Section 4.05—namely the ability for reduced phone and public service counter hours, state entities to work with DOF to determine as well as delayed infrastructure and information the final reduction amount—applied to the trial technology (IT) expenditures. For example, the court reduction. Additionally, the judicial branch judicial branch reports that 27 courts are holding an wanted to mitigate the impacts of the reductions estimated 580 positions vacant and 13 courts have on court users by distributing the funding as implemented furloughs. While the actions taken by quickly as possible and had sufficient excess individual trial courts vary broadly, these actions TCTF expenditure authority to do so. Its internal generally reduce service to court users—such as committees acted in January to recommend by causing longer wait times, inability to access Judicial Council restore the funding by revising self-help or other services, and backlogs. As such, the $97 million reduction downward to a a partial restoration of the ongoing reduction would $55 million reduction. This revised reduction was likely improve court service levels. For example, the recommended to be allocated to the trial courts Riverside Superior Court announced that it plans using the workload formula and methodology that to cancel limited service or furlough days between February and June 2025—in part due to the Figure 3 proposed partial restoration of funding. Ongoing Discretionary Changes to Trial …But Some Impacts Likely to Remain. Court Funding by Budget Year Provided Despite the proposed restoration, court service (In Millions) levels are still likely to be impacted. This is because the trial courts will still need to operationalize an Unallocated Changes for ongoing $55 million General Fund reduction. While Fiscal Year Changesa Increased Costsb trial courts could use the proposed $40 million 2013-14 $60 — ongoing General Fund augmentation for increased 2014-15 86 — operational costs to further offset this reduction, 2015-16 91 — it would still leave a net reduction of $15 million. 2016-17 20 — 2017-18 — — Furthermore, as shown in Figure 3, the trial courts 2018-19 123 — did not receive a discretionary funding increase to 2019-20 — — address growth in costs in 2024-25 and the amount 2020-21 -177 — proposed for 2025-26 is about half of what was 2021-22 177 $72 2022-23 100 84 provided in prior years. This means that trial courts 2023-24 — 74 will need to manage their budgets to address any 2024-25 -97 — increased employee compensation, contractual, 2025-26 (proposed) 42 40 or other costs. This could constrain the extent to a Funding in certain years may have been provided for a specific purpose. For example, some funding was designated for promoting which service levels may be restored. For example, fiscal equity among the trial courts. However, the provided funding was increased employee compensation costs for unallocated and subject to Judicial Council’s discretion. b Does not include funding provided specifically for increased trial court existing employees could limit a court’s ability to health and retirement benefits as the state covers such costs in full. 6 LEGISLATIVE ANALYST’S OFFICE 2025-26 BUDGET was used for the $97 million reduction. Specifically, Provides Judicial Council With Full Allocation trial courts within 4 percent of the statewide funding Discretion. Both components of the Governor’s average would generally be required to take a proposed augmentation provide Judicial Council reduction proportional to their share of overall trial with complete discretion over (1) what the funds court funding. Trial courts (excluding the state’s are used for and (2) how the funds are allocated smallest trial courts) more than 4 percent above to the trial courts. As noted above, it appears that the statewide funding average would take additional the workload formula will be used to allocate the reductions; while those more than 4 percent $42 million ongoing funding restoration. However, below the statewide funding average would take it is unclear at this time how the $40 million for lesser reductions. increased costs will be allocated. Providing Judicial ...Despite Not Receiving Direction From the Council with full discretion on the allocation of Legislature. The 2024-25 budget package did such funds limits the Legislature’s ability to ensure not include budget bill or other language directly that the funding is in line with legislative priorities. providing the administration flexibility to adjust the For example, the Legislature could prioritize using $97 million reduction. As such, in our view, any the funding to specifically restore phone or counter restoration—which would be a change from the hours over filling all vacant positions. enacted 2024-25 budget package—should require Proposed Budget Bill Language Is Vague, legislative review. Ultimately, the judicial branch and Limiting Legislative Oversight. The proposed DOF recently submitted a JLBC letter requesting budget bill language authorizing the transfer of to implement the 2024-25 restoration by increasing unrestricted TCTF fund balance monies to the the amount available for trial court operations General Fund is a reasonable proposal as such funding using unrestricted TCTF fund balance monies would be available for other budget monies. As discussed above, this is allowed under priorities. However, the language is vague as the the different budget bill language permitting DOF exact amount would be determined by DOF in to augment the amount available for trial court consultation with Judicial Council. First, it does operations funding by $42 million with unrestricted not specify what monies are being considered for TCTF fund balance monies. However, the transfer. For example, it is unclear whether only administration and the judicial branch undertook excess General Fund backfill monies accumulated the process of seeking legislative approval after from prior years would be considered for transfer, beginning to implement the change. or if General Fund savings from judicial salaries Requires Trade-Off With Other Budget or other areas will be considered. This makes it Priorities. In total, the Governor’s budget proposes difficult for the Legislature to determine whether an $82 million augmentation to ongoing General it agrees with what monies are being considered Fund spending compared to what was agreed for transfer back to the General Fund. Second, upon in the 2024-25 budget agreement. As the proposed language does not include any discussed above, these additional funds would requirements for legislative notification. As a result, likely help improve court service levels. However, if a transfer is made (even with more detailed this approach comes with significant trade-offs for guidance from the Legislature on what should other parts of the state budget. Given the state’s be considered as part of the calculation), the current fiscal position—with a budget that is roughly Legislature lacks the opportunity to review how balanced in 2025-26 and notable deficits projected the specific amount was calculated and whether in the out-years—the state does not have capacity the calculation met its desired parameters. This for new ongoing commitments. As a result, in future makes it difficult for the Legislature to ensure that years, this proposed ongoing spending will likely the maximum amount it desires is being transferred require trade-offs with other areas of spending and back to the General Fund to be used for its budget potentially require even further budget solutions, priorities. The need for such oversight is even more such as reduced spending for other existing critical given the multiyear deficits facing the state. state programs. www.lao.ca.gov 7 2025-26 BUDGET Recommendations hours or self-help services. Such priorities could be documented in budget bill language and would Direct Judicial Branch To Report on Process ensure that the funding is used consistent with for Seeking Midyear Adjustments. While the legislative priorities. judicial branch eventually sought legislative input before moving ahead with implementing the Modify Proposed Budget Bill Language restoration of the $42 million reduction in 2024-25, Authorizing Transfer of Unrestricted TCTF it is concerning that it had first moved to act without Monies to General Fund. We recommend the legislative oversight. Accordingly, we recommend Legislature modify the proposed budget bill the Legislature direct the judicial branch to report language authorizing the transfer of unrestricted at budget hearings on its process for making TCTF fund balance monies to the General Fund in midyear budget adjustments and how it will ensure two key ways to increase legislative oversight. First, the Legislature has had the opportunity to weigh in we recommend the Legislature modify the language on them. to provide guidance on which specific unrestricted TCTF fund balance monies it believes should be Consider Trial Court Augmentations in considered for transfer or how the calculation Context of Broader Budget Challenges. The should be determined. For example, the language proposed $82 million augmentation comes with could specify that any excess General Fund backfill significant trade-offs that the Legislature will monies be returned to the General Fund. This need to weigh. On the one hand, the increased would be reasonable as the funding was provided trial court funding would likely help improve court specifically to maintain trial court operation levels service levels, which is a notable benefit. On if insufficient fine and fee revenue was deposited the other hand, the multiyear deficits facing the into the TCTF. Accordingly, if sufficient fine and state in the coming years leave no capacity for fee revenue is available, the excess General Fund new ongoing commitments. This means that any monies should be immediately available for other approved ongoing funding would likely require legislative priorities. This same rationale could the Legislature to reduce spending on other also apply to savings from General Fund provided existing state programs or activities. As such, the for specific purposes (such as trial court judge Legislature should carefully consider the degree salaries). Second, we recommend the Legislature to which it prioritizes this funding over its other modify the language to require that notification budget priorities. For any additional funding that be provided to JLBC 30-days before a transfer is is ultimately provided, the Legislature should also made and that such notification include information consider whether it has certain priorities for how on how the final transfer amount was determined. such funding is used. This is particularly important if These changes would enhance legislative oversight any ongoing reduction must still be operationalized. and potentially benefit the General Fund, which will For example, the Legislature could determine that be particularly important given the multiyear deficits the increased General Fund support should be facing the state. prioritized for the restoration of phone and counter SAN JOAQUIN COUNTY NEW TRACY COURTHOUSE Background replace outdated facilities. In a November 2019 assessment of its facilities, the judicial branch Judicial Branch Has Extensive Facility identified a need for a total of 80 construction Needs. The judicial branch currently manages projects—56 new buildings and 24 renovations— around 435 facilities across all 58 counties. Its totaling $13.2 billion. These projects were facility program is responsible for various activities categorized into five groups—and ranked within including maintaining these facilities, managing each group—in the following descending priority leases, and constructing new courthouses to 8 LEGISLATIVE ANALYST’S OFFICE 2025-26 BUDGET order: 18 immediate need projects ($2.3 billion), 2009-10 and 2017-18. The 2021-22 budget formally 29 critical need projects ($7.9 billion), 15 high need shifted support for the construction of any future projects ($1.3 billion), 9 medium need projects courthouses to the General Fund. When proposing ($1.6 billion), and 9 low need projects ($100 million). new projects, the administration generally follows Additionally, in August 2024, the judicial branch the ranked project priority list identified in the identified 22,673 deferred maintenance projects judicial branch’s 2019 assessment of facility needs. totaling around $5.2 billion. Of this estimated Since 2021-22, the construction or renovation of cost, the state would be responsible for around about a dozen of the highest ranked immediate $3.8 billion (74 percent). (The remaining amount need projects have commenced. would generally be the responsibility of counties Governor’s Proposal that share space in court facilities.) Existing Construction Account Insolvent. Fund Performance Criteria Stage of San State law authorizes Judicial Council to construct Joaquin County New Tracy Courthouse Project. The Governor’s 2025-26 budget proposes to trial court facilities and established a state special provide $2.9 million one-time General Fund to fund—the State Court Facilities Construction support the Performance Criteria phase of the Fund (SCFCF) to support construction and other San Joaquin County New Tracy Courthouse. facility-related expenses. (A second construction The proposed funding would start this capital account was consolidated into the SCFCF in outlay project to construct a new two-courtroom 2021-22.) The SCFCF is used to support both the courthouse. This new courthouse would replace construction and maintenance of court facilities four existing, vacant court facilities and is estimated and is mainly supported by criminal and civil fines to cost $65 million. and fees. The amount of revenue deposited into the fund steadily declined over the past years, resulting Assessment in expenditures routinely exceeding revenues. The Proposed Project Generally Reasonable… state contributed to this structural fund imbalance The selection of the new Tracy courthouse is by redirecting over $1.5 billion from the fund to the generally reasonable as it is the next project General Fund or to support trial court operations. in line to be funded when following the judicial This led to the fund becoming insolvent and branch’s 2019 ranked list of facility project required various actions be taken—most notably needs. This project is an immediate need project the cancelation and suspension of projects (highest-priority category) that would replace four supported by the construction account. Currently, vacant, outdated, and unsafe facilities. Additionally, the fund remains insolvent and is estimated to the identified scope and cost of the project require a General Fund backfill in the tens of millions seem reasonable. of dollars annually for at least a decade to maintain existing facility related activities and to pay the debt …But Would Expand Service Back to Tracy… service for completed construction projects. During the Great Recession, trial courts—along with other state entities—received budget reductions. New Construction Supported by the General Trial courts took various actions to operationalize Fund. Absent any state action, the SCFCF’s the budget reductions, including closing insolvency halted the judicial branch’s construction courtrooms or courthouses as well as reimagining program. This led the state to shift support for the how to deliver services (such as centralizing certain construction program to the state General Fund. services). The judicial branch indicates that all Tracy The 2018-19 budget included $1.3 billion in lease branch facilities have been closed since 2011 due to revenue bond authority backed by the General budget constraints from the recession and the poor Fund—rather than the SCFCF—to finance ten condition of the existing facilities. Because services previously planned projects. This commitment are not currently being provided in Tracy, approval effectively backfilled the $1.4 billion transferred of this new construction project would effectively from the SCFCF to the General Fund to help be expanding service back to Tracy. The San address the state’s budget condition between www.lao.ca.gov 9 2025-26 BUDGET Joaquin Superior Court indicates that it estimates deferred maintenance needs to address unsafe $1.2 million would be needed annually to operate conditions faced by current staff and court users the new courthouse and believes it has the budget in such facilities. A new Tracy courthouse could be capacity to do so. The new courthouse would funded instead at a later date. provide a benefit to people in San Joaquin County Recommendations by improving court access for those living in Tracy and shifting workload from other courthouses back Consider Redirecting Funding to Other to Tracy, which could reduce wait times for services Trial Court Projects. The proposed new Tracy in other parts of the county. courthouse is next in line to be funded according to the judicial branch’s ranked priority list of …Rather Than Addressing Needs at facility need and would be provide benefits to Currently In-Use Facilities. As noted above, those in San Joaquin County. However, service the judicial branch has extensive need for new or is not currently being provided in the area. Given renovated trial court facilities as well as for deferred the extensive unmet facility needs elsewhere, the maintenance projects. Despite the benefits of a Legislature could consider whether the proposed new Tracy courthouse, there are no facilities in funding should be redirected to projects that are the immediate needs category that are currently next in line to be funded and that address needs being actively used in San Joaquin County. In at facilities that are currently in use—rather than contrast, there are still other facilities elsewhere in expanding service back to Tracy—or to address the state—such as in Kern and Placer Counties— pressing deferred maintenance needs. This would that are being used despite their condition being focus resources on facilities with the most pressing so poor that they have projects in the immediate unsafe conditions for current staff and court users. needs category. It would be reasonable to consider redirecting this funding to such projects or pressing 10 LEGISLATIVE ANALYST’S OFFICE 2025-26 BUDGET www.lao.ca.gov 11 2025-26 BUDGET LAO PUBLICATIONS This report was prepared by Anita Lee, and reviewed by Drew Soderborg and Ross Brown. 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. 12 LEGISLATIVE ANALYST’S OFFICE