The 2026-27 Budget: Judicial Branch

analysis full 2026-27 BUDGET The 2026-27 Budget: Judicial Branch GABRIEL PETEK | LEGISLATIVE ANALYST | FEBRUARY 2026 SUMMARY In this brief, we provide an overview of the proposed funding for the judicial branch in 2026-27. We also analyze the Governor’s budget proposals related to court construction and facility modification projects. Governor Proposes Funding for Ten Court Facility Projects. The Governor’s budget includes $320 million in lease revenue bond authority, $130 million from the General Fund, and reimbursement authority for ten court facility projects. This would support eight existing construction projects, a new project to relocate 24 courtrooms within Los Angeles County, and additional funding to address cost increases for the Orange Central Justice Center (CJC) facility modification project. No Concerns With Requested Amounts… The state’s multiyear deficits means that any new General Fund spending comes at the expense of other programs, meaning new spending must meet a higher bar for approval. However, we find the proposed projects meet this higher bar as they seek to address critical health, safety, and other needs in buildings frequented by the public and their costs and scope seem reasonable. …But Various Factors Raise Questions About Long-Term Plan for Addressing Court Facility Needs. The state’s slow pace at initiating construction projects, as well as increasing costs, raise questions about the long-term plan for fully addressing court facility needs. Delays in initiating projects could result in significant, unexpected costs occurring simultaneously if facilities worsen to the point of needing immediate replacement. As such, it could be reasonable to consider whether the state should concurrently or alternatively prioritize facility modification projects to extend and/or improve the usability of existing facilities. Recommend Legislature Direct Judicial Branch to Report on Long-Term Plan for Facilities Based on Legislative Direction. Given the magnitude of the judicial branch’s facility needs and deficits facing the state General Fund, it cannot fully address such needs in the short run. Accordingly, we recommend the Legislature instead consider how much General Fund to dedicate annually to court facility needs. We also recommend it direct the judicial branch to provide by January 2028 a long-term plan for addressing facility needs. This should include an assessment of how the annual funding amount chosen by the Legislature should be divided between new construction and facility modification projects to maximize the life of existing facilities. Additionally, given the cost and scope changes for the CJC project, we recommend the Legislature consider increasing oversight of facility modification projects receiving one-time General Fund support to help ensure it receives accurate and complete data and that state funds are used cost-effectively. www.lao.ca.gov 1 analysis full 2026-27 BUDGET OVERVIEW increased during this period—from 46 percent in 2016-17 to a high of 59 percent in 2022-23 and Background 2023-24, before decreasing slightly to 56 percent in Roles and Responsibilities. The judicial 2025-26. Since 2019-20, the majority of the judicial branch is responsible for the interpretation of branch budget has been supported by the General law, the protection of people’s rights, the orderly Fund. This growth is due to various reasons, settlement of all disputes, and the adjudication including increased operational costs. of accusations of legal violations. The branch Governor Proposes $5.5 Billion in State consists of statewide courts (the Supreme Court Funds for Judicial Branch. For 2026-27, the and the Courts of Appeal), trial courts in each Governor’s budget includes $5.7 billion from all of the state’s 58 counties, and state entities of fund sources in support for the judicial branch. the judicial branch (Judicial Council, Judicial This amount includes about $5.5 billion from all Council Facility Program, and the Habeas Corpus state funds (General Fund and special funds), an Resource Center). The branch receives support increase of $152 million (2.8 percent) above the from several funding sources including the state revised amount for 2025-26, as shown in Figure 2. General Fund, civil filing fees, criminal penalties and (These totals do not include expenditures from fines, county maintenance-of-effort payments, and local reserves or trial court reserves.) Of this federal grants. amount, about $3.3 billion (60 percent) is from the Majority of Support From General Fund. As General Fund. This is a net increase of $220 million shown in Figure 1, total operational funding for the (7 percent) from the revised 2025-26 General Fund judicial branch has steadily increased from 2016-17 amount. This net increase reflects various changes, through 2025-26. The percent of total operational including increased operational costs and facility funding from the General Fund has also steadily modification costs. Figure 1 Total Judicial Branch Fundingª (In Billions) $6 Local Revenues State Special Funds 5 General Fund 4 3 2 1 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 (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 analysis full 2026-27 BUDGET Figure 2 Judicial Branch Budget Summary—All State Funds (Dollars in Millions) Change From 2025-26 2024-25 2025-26 2026-27 Actual Estimated Proposed Amount Percent State Trial Courts $3,885 $4,037 $4,090 $53 1.3% Supreme Court 53 58 57 -1 -2.5 Courts of Appeal 283 298 312 14 4.8 Judicial Council 281 283 280 -4 -1.3 Judicial Branch Facility Program 585 654 743 89 13.6 Habeas Corpus Resource Center 18 20 20 — 0.2 Totals $5,105 $5,350 $5,502 $152 2.8% Trial Courts Report $405 Million in Reserves facilities. In a November 2019 assessment of its at End of 2024-25. Trial courts have a limited facilities, the judicial branch identified a need for a ability to keep and carry over any unspent funds total of 80 construction projects—56 new buildings (also known as “reserves”) from one fiscal year to and 24 renovations—totaling $13.2 billion. These the next. Specifically, trial courts are only allowed projects were categorized into five groups— to carry over funds equal to 3 percent of their and ranked within each group—in the following operating budget from the prior fiscal year under descending priority order: 18 immediate need current law. However, certain funds held in the projects ($2.3 billion), 29 critical need projects reserve—such as those that are encumbered, ($7.9 billion), 15 high need projects ($1.3 billion), designated for statutory purposes, or funds held 9 medium need projects ($1.6 billion), and 9 low on a court’s behalf by Judicial Council for specific need projects ($100 million). Additionally, in August projects—are not subject to this cap, meaning they 2024, the judicial branch identified 22,396 deferred also can generally be carried over. At the end of maintenance projects totaling around $5.4 billion. 2024-25, trial courts reported having $405 million in Of this estimated cost, the state would be reserves. Of this amount, $310 million (76 percent) responsible for around $4 billion (74 percent). is not subject to the cap. This amount consists of (The remaining amount would generally be the funds that are encumbered ($152 million), statutorily responsibility of counties that share space in excluded ($124 million), designated for prepayments court facilities.) or other purposes ($16 million), or held by Judicial Existing Construction Account Insolvent. Council on behalf of the trial courts for specific State law authorizes Judicial Council to construct projects ($18 million). This leaves $95 million trial court facilities and established a state special (24 percent) in reserves subject to the cap. This is fund—the State Court Facilities Construction less than the $106 million the trial courts could have Fund (SCFCF) to support construction and other retained under the current 3 percent cap. facility-related expenses. (A second construction account was consolidated into the SCFCF in COURT FACILITIES 2021-22.) The SCFCF is used to support both the construction and maintenance of court facilities Background and is mainly supported by criminal and civil fines Judicial Branch Has Extensive Facility Needs. and fees. The amount of revenue deposited into The judicial branch currently manages around 430 the fund steadily declined over the past years, facilities across all 58 counties. Its facility program resulting in expenditures routinely exceeding is responsible for various activities including revenues. Additionally, since 2009-10, nearly maintaining these facilities, managing leases, and $1.7 billion has been transferred from the judicial constructing new courthouses to replace outdated branch’s construction accounts to the General www.lao.ca.gov 3 analysis full 2026-27 BUDGET Fund or to support trial court operations. These “beyond rated life but serviceable”). Annual funding transfers were originally made to help address the typically is used to address projects in the highest fiscal difficulties then facing the state. This led to two priority categories, such as major flooding or the fund becoming insolvent and required various substantial roof damage. Any unaddressed projects actions be taken—most notably the cancelation essentially add to the judicial branch’s deferred and suspension of projects supported by the maintenance list. In recent years, some one-time construction account. Currently, the fund remains funding has been also provided from the General insolvent and is estimated to require a General Fund Fund to support specific, larger facility modification backfill in the tens of millions of dollars annually projects. These are typically higher-priority projects through 2036-37 to maintain existing facility-related whose costs would have otherwise required a activities and to pay the debt service for completed significant portion of the discretionary funding construction projects. in one or more years. Such projects typically go New Construction Supported by the General through the annual budget review process as an Fund. For a period, the SCFCF’s insolvency operations request rather than a capital outlay halted the judicial branch’s construction program. request. In other words, these projects do not However, after the fiscal difficulties facing the necessarily undergo the same review as the new state subsided, the state shifted support for construction projects. For example, some of these the construction program to the state General projects may not go through formal review by Fund. Specifically, the 2018-19 budget included Department of Finance (DOF) staff that focus on $1.3 billion in lease revenue bond authority backed capital outlay. by the General Fund—rather than the SCFCF— Governor’s Proposal to finance ten previously planned projects. This The Governor’s budget includes $320 million commitment effectively backfilled the $1.4 billion in lease revenue bond authority, $130 million from transferred from the SCFCF to the General Fund to the General Fund, and reimbursement authority for help address the state’s budget condition between ten courthouse facility projects. These projects are 2009-10 and 2017-18. The 2021-22 budget formally described in more detail below. shifted support for the construction of any future courthouses to the General Fund. When proposing Existing Construction Projects. The budget new projects, the administration generally follows proposes $320 million in lease revenue bond the ranked project priority list identified in the authority for the design-build phase of the new judicial branch’s 2019 assessment of facility needs. San Luis Obispo Courthouse project. (While this Since 2021-22, the construction or renovation of would not result in immediate General Fund costs, 12 of the highest ranked immediate need projects the lease revenue payments will come from the have commenced. General Fund.) In addition, it proposes $47.6 million one-time General Fund for the continuation of the Some Facility Modification Projects following construction projects: Supported by General Fund. In addition to construction projects, the judicial branch manages • $18.1 million reappropriation of funds for the smaller facility modification projects. These performance criteria phase of the New Fresno are projects that involve physical changes to a Courthouse project, which had been delayed facility (or its building components) that improve due to an extended site selection process. its designed level of functionality. The judicial • $14.1 million for the construction phase of branch currently receives about $80 million projects to build out two courtrooms to annually—$65 million from the SCFCF and accommodate new judgeships in Kings and $15.4 million from the General Fund—for use at Sutter Counties. Judicial Council’s discretion. Judicial Council • $6.4 million for the working drawings and maintains a list of modification projects and construction phase of a project to build categorizes them into one of six priority categories out one courtroom to accommodate a new (such as “immediately or potentially critical” or judgeship in San Joaquin County. 4 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET • $5.1 million reappropriation of funds for greater scrutiny and must meet a higher bar for the performance criteria phase of the New approval as it would reduce General Fund spending Solano Hall of Justice project, which had elsewhere. Such a higher bar can include spending been delayed due to an extended site to address critical infrastructure issues. We find that selection process. the identified projects meet this higher threshold • $2.3 million for the performance criteria phase as they seek to address critical health, safety, and of the New Quincy Courthouse project in other facility needs in buildings frequented by the Plumas County. public. Additionally, the costs and scopes of these identified projects generally seem reasonable. • $1.5 million for the performance criteria phase The existing construction projects were largely of the New Nevada City Courthouse project in selected based on the judicial branch’s 2019 ranked Nevada County. list of facility project needs and require funding Relocation of Los Angeles Spring Street to continue moving forward. The projects related Courtrooms. The budget proposes $11 million to the relocation of the Los Angeles Spring Street one-time General Fund to relocate 24 courtrooms courthouses are also necessary as the landlord is out of leased space in Los Angeles County. The terminating the state’s lease of space. Without this lease will not be extended as the building is funding to build or modify space to relocate the expected to be sold. Of this amount, $4.6 million courtrooms into existing courthouses, service levels would be used to relocate 17 courtrooms into six would be impacted. Finally, the Orange CJC project existing courthouses. The remaining $6.3 million is already in progress and addresses key safety would be used for the preliminary plans and issues in a building with large numbers of people working drawings phase of a project to renovate visiting on a daily basis. the existing Chatsworth Courthouse to build out …But CJC Proposal Raises Questions About six courtrooms. Appropriate Oversight. While the CJC project Additional Funding for the Orange Central is necessary, the project’s cost has more than Justice Center (CJC). The budget includes doubled. Specifically, prior budgets included $71 million limited-term General Fund ($36 million $64.1 million for this project, which was estimated in 2026-27 and $35 million in 2027-28) and to cost a total of $70.2 million, with the county $7.1 million SCFCF reimbursement authority covering the remaining balance. The judicial ($3.6 million in 2026-27 and $3.5 million in 2027-28) branch estimates that an additional $71 million will for a previously approved facility modification now be necessary to complete the project due to project at the Orange CJC. (The reimbursement various factors that were unidentified at the start authority would allow the state to accept payment of the project, including unanticipated asbestos from Orange County for its portion of the project remediation and the need to address new issues costs as this is a shared facility.) This project identified by the Office of the State Fire Marshall generally addresses fire and egress safety issues. (OFM). However, construction is currently only This funding would be in addition to $64.1 million 25 percent complete and discussions with the one-time General Fund provided in prior budgets. OFM continue. This means that additional issues could be identified that drive further cost increases. Assessment The sizeable increase in funding raises questions No Concerns With Requested Amounts… on whether sufficient oversight was in place to As discussed in our January budget publication, appropriately assess the scope of work and costs The 2026-27 Budget: Overview of the Governor’s before the project began. Sufficient oversight would Budget, the state faces serious multiyear deficits ensure the Legislature has the information it needs that will need to be addressed. This means the as it weighs court facility projects against its other state lacks the necessary revenues to sustain priorities. This is particularly important in tough current expenditure levels. As such, any proposals budget times with scarce General Fund resources. that require new General Fund support require www.lao.ca.gov 5 analysis full 2026-27 BUDGET Total Costs of Court Facility Projects …Raising Questions About Long-Term Plan Continue to Increase… As noted above, the for Addressing Court Facility Needs… The judicial branch’s 2019 assessment estimated a slow pace in initiating construction projects, as total of $13.2 billion would be needed to address well as the increasing costs, raises questions 80 projects. Of this amount, about $6.1 billion was about the long-term plan for fully addressing court associated with 17 projects in Los Angeles County. facility needs. Delays in initiating projects means In April 2024, the Los Angeles Superior Court that the facilities on the list could worsen to the completed a reassessment of its facilities needs point where the state has no option but to replace based on its operations. The estimated costs of them immediately. This could result in significant, these 17 projects increased to around $14 billion. unexpected costs occurring simultaneously. Similarly, while most of the remaining projects on For example, if multiple courthouse projects— the 2019 list have not been reassessed, the costs including some large, multistory courthouses— of projects in other parts of the state are likely needed to be started at the same time, it could increasing. For example, the 2019 assessment require hundreds of millions of dollars in General estimated the new Fresno Courthouse project Fund annually to pay for pre-construction costs would cost $483 million. This project is currently or debt service. Under such a circumstance, in the middle of pre-construction activities, the judicial branch and the state’s capacity to which has resulted in an updated cost estimate appropriately conduct oversight of such projects of $965 million—double the original estimate. In could be strained. At the same time, the condition combination, as shown in Figure 3, it makes it of other facilities could worsen resulting in the likely that at least $21 billion could be needed to need for new construction, facility modification, or complete the list of 80 projects. These costs will deferred maintenance projects. As General Fund is likely continue to increase over time due to inflation a major source of supporting these costs, it would and various other factors. be prudent to have a long-term plan or strategy to …And Pace of New Construction Projects Is address these needs while balancing other state Slow… As shown in Figure 3, the state has only General Fund priorities. initiated 12 (or 15 percent) of the construction …And Whether More Funds Should Be projects identified in 2019. Additionally, the state’s Dedicated to Facility Modification Projects. current plan is to initiate one new project a year. Given the current plan of starting one new Absent any changes, this means the last immediate construction each year, it could be reasonable to need project would be initiated in 2030-31. consider whether the state should concurrently or Continuing at this pace means that it would take alternatively prioritize facility modification projects decades to fully address the list. During this time, it to extend and/or improve the usability of existing is likely that the condition of the facilities on the list facilities. This could prevent facility conditions from will worsen and additional facilities could be added worsening—thereby delaying the need for a new to the list. replacement courthouse or full-scale renovation. It could also enable the state to Figure 3 more slowly build new courthouses Status of Trial Court Construction Projects and avoid a surge of unpredictable facility costs. Finally, such an Beginning in 2019-20a approach could distribute the Number of Estimated Project Number monies across more facilities Priority Group Projects Costs (in Billions) Initiated throughout the state—thereby Immediate Need 17 $2.0 12 increasing the number of people Critical Need 26 10.6 — High Need 17 4.7 — benefiting from improved facilities. Medium Need 10 3.5 — Low Need 10 0.2 — Totals 80 $21.0 12 a Reflects data from 2019 facility assessment, adjusted to include updated data from 2024 reassessment of Los Angeles facilities. 6 LEGISLATIVE ANALYST’S OFFICE analysis full 2026-27 BUDGET Recommendations dollars—or slightly more—depending on what the Legislature asks for the reassessment to include. Consider How Much General Fund to Such a reassessment could also include direction Dedicate to Court Facilities. Given the magnitude to reconsider existing operations—such as the of the judicial branch’s facility needs and deficits impact of increased remote proceedings—and facing the state General Fund, it is not possible for whether existing projects should move up or the state to fully address such needs in the short down in the prioritization list. As costs seem to run. Accordingly, we recommend the Legislature be significantly increasing, having more recent instead consider how much General Fund it would information could provide the Legislature with more like to dedicate annually to address court facility accurate information on how much the full list of needs. A stable commitment of funding would allow construction projects will cost as well as which the state and judicial branch to make short- and projects are the most pressing. long-term plans to maximize use of these funds. For example, this would allow the judicial branch to Consider Additional Oversight of Facility make choices between new construction or facility Modification Projects Receiving One-Time modification projects. The specific amount would Funding. We recommend the Legislature consider depend on its other General Fund priorities. This is increasing oversight of facility modification because increased and consistent facility funding projects receiving one-time General Fund support. would come at the expense of other General Fund As noted above, these project costs typically would priorities given the multiyear deficits facing the use a significant portion of the judicial branch’s state. If it is comfortable with the level of funding discretionary funding if they were not funded proposed for facilities in 2026-27, we recommend it separately. The doubling of the Orange CJC project approve the Governor’s proposals. If the Legislature from initial estimates, with the potential for even would like to dedicate a different level of funding, more future costs as the project is only 25 percent it could work with the judicial branch to prioritize complete, raises questions about whether state how to use whatever level of funding the Legislature oversight of such larger or more complex projects deems appropriate. is sufficient. It is possible that the Orange CJC project faces unique factors based on the specifics Direct Judicial Branch to Report on of its existing condition that will not be an issue Long-Term Plan for Facilities Based on in other facility modification projects. However, Legislative Direction. We recommend the if the state prioritizes more General Fund for Legislature direct the judicial branch to report by facility modification projects, it becomes critical January 2028 on a long-term plan for addressing to ensure appropriate oversight is in place to facility needs based on the Legislature’s direction ensure the Legislature has sufficient information. on the amount of annual General Fund that would At a minimum, this information should include an be prioritized for court facilities. This plan should accurate assessment of the existing condition of include an assessment of how the funding should a facility, the scope of the project, and the costs be divided between new construction and facility to complete it. One way to accomplish this would modification projects to maximize the amount of be for the Legislature to require that such projects time existing facilities may be safely used. It could undergo review in the budget process by DOF in also consider innovative ways to use the funding a manner similar to new courthouse facility capital to finance new construction or facility modification outlay projects. This would mean that similar projects. To enhance the plan, the Legislature could construction expertise is applied by DOF in its also consider whether it should provide funding for assessment and monitoring of these larger facility the judicial branch to reassess the total estimated modification projects. This could help ensure the costs of the construction project list—excluding Legislature receives accurate and complete data to Los Angeles facilities which were reassessed in inform its decision-making and that state funds are 2024. We estimate this could cost several million used cost-effectively. www.lao.ca.gov 7 analysis full 2026-27 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. 8 LEGISLATIVE ANALYST’S OFFICE