California  Spending Plan 2001-02 Chapter 3 Part 2

Health

General Fund support for health programs in 2001-02 totals $13.6 billion, an increase of 9.8 percent over the prior year. This growth in expenditures is the result of caseload increases, settlement of a lawsuit, continuing implementation of a ballot measure approved by the voters, and various program augmentations. These changes and several other significant aspects of the budget plan are discussed below.

Figure 6 (see next page) summarizes the changes in expenditures in the major health programs.

Tobacco Settlement Fund

New Special Fund Established. Budget legislation enacts, with some modifications, the Governor's proposal to establish a new special fund, the Tobacco Settlement Fund, made up of revenues received by the state from the settlement of tobacco-related litigation. About $402 million is deposited into the fund in the budget year and appropriated for recent and newly enacted expansions of health care programs summarized in Figure 7. No reserve was established for the Tobacco Settlement Fund. The remaining payments anticipated in the budget year—about $73 million—would be deposited in the General Fund. Budget legislation specifies that all settlement payments received by the state in 2002-03 and subsequent years shall be deposited in the Tobacco Settlement Fund.

Medi-Cal Program

The budget provides about $9.5 billion from the General Fund ($26.4 billion all funds) for local assistance provided under the Medi-Cal Program. This General Fund total reflects a technical shift for budget display purposes (with no implication for the level of program activity) of $607 million from the General Fund from the Medi-Cal budget to the budget of the Department of Developmental Services.

Caseload Adjustments. The budget plan adopts the administration's Medi-Cal estimates reflecting an increase of about $500 million from the General Fund ($2.2 billion all funds) over the prior fiscal year. The increase in spending will accommodate an estimated additional 800,000 Medi-Cal eligibles, about a 15 percent increase in program caseload over the level anticipated for the current year.

The major factors driving up the Medi-Cal caseload in the budget year are policy decisions to expand program eligibility made in previous years. This includes decisions to provide continuous eligibility for medical benefits to children 19 years of age and younger and persons leaving the California Work Opportunity and Responsibility to Kids (CalWORKs) program, as well as the elimination of quarterly status reporting for parents.

Caseloads are also growing because of the prior decision to expand eligibility for families with children in the so-called 1931(b) category with income at or below 100 percent of the federal poverty level (FPL), as well as the decision to provide Medi-Cal benefits without a share of cost to aged, blind, and disabled persons with current income equivalent up to 133 percent of FPL. The budget pays for these latter two program expansions from the Tobacco Settlement Fund.

Settlement of Hospital Litigation. The 2001-02 spending plan provided for a lump-sum payment of about $191 million from the General Fund to settle longstanding litigation in the case of Orthopaedic Hospital v. Belshe' relating to Medi-Cal payment rates for hospital outpatient services. In order to comply with the proposed settlement terms, the budget also provides about $80 million from the General Fund to provide an ongoing 30 percent increase in hospital outpatient rates. (Under the agreement, rates are to be increased 3.3 percent annually in the following three years.)

Los Angeles Medicaid Demonstration Project. The budget adopted the Governor's proposal to contribute $30 million annually from the General Fund over a five-year period (beginning in 2000-01) as part of a larger financial package of federal, state, and county support for the reform of Los Angeles County's medical "safety net" programs. In addition to providing state funding for cost-based reimbursement for services provided at eligible county-affiliated clinics, the budget provided $7 million in federal Workforce Investment Act funds for retraining of local health workers displaced by the reform effort. Budget legislation also requires that reports monitoring the county's progress in carrying out health care system reforms be provided to the Legislature.

Long-Term Care Programs. The budget includes the Governor's proposal for about a 2 percent increase in rates for nursing facilities at a General Fund cost of about $46 million. The spending plan provides an additional $7 million from the General Fund for a supplemental reimbursement for freestanding long-term care facilities that guarantee wage increases for their workers. Budget legislation also authorizes nursing facilities that are a part of publicly operated hospitals to receive, at no state cost, supplemental reimbursements of about $20 million in federal funds.

General Fund Reductions. Because of the state's fiscal constraints, the Legislature eliminated a proposed 2 percent cost-of-living increase for Medi-Cal managed care rates at an estimated General Fund savings of $25 million. The budget assumes that the state will achieve about $25 million in additional savings from stepped-up antifraud activities than was reflected in the Governor's budget plan, and further assumes that the state will save almost $24 million more by recovering drug rebates owed the state than the administration had estimated.

Healthy Families

The budget provides about $128 million from the General Fund ($656 million all funds) for the operation of the Healthy Families Program during 2001-02. This reflects an overall increase of about $260 million (all funds) in annual spending for the program. General Fund support for Healthy Families would decrease by $13 million in the budget year because a share of base program costs would be shifted to the Tobacco Settlement Fund. The overall increase in program expenditures is driven primarily by projected caseload growth of about 250,000 eligibles—almost a 60 percent increase over the anticipated 2000-01 level of participation in the program.

Program Expansion to Parents. The budget includes $62 million from the Tobacco Settlement Fund to implement legislation enacted last year directing the Managed Risk Medical Insurance Board to seek a federal waiver to expand the Healthy Families Program to uninsured parents of children eligible for the program. The Governor proposed to cover parents of children eligible for the program with incomes up to 200 percent of FPL, but the final version of the budget provides coverage to parents with incomes up to 250 percent of FPL beginning October 1, 2001. Of the total projected caseload growth in the program, about 150,000 newly eligible parents are expected to enroll during 2001-02. The new program is subject to federal approval which remained pending at the time this publication was prepared.

Breast and Cervical Cancer Treatment Programs

About 1,000 newly eligible women are expected to participate in new state breast and cervical cancer treatment programs that will be established during the budget year.

Enhanced Medi-Cal Coverage. The 2001-02 budget includes $9.5 million ($5.3 million Tobacco Settlement Fund and $4.2 million federal funds) to phase in a new federal option to provide breast and cervical cancer treatment services for women with incomes up to 200 percent of the FPL who were previously ineligible for the Medicaid program (known as Medi-Cal in California). Under the new federal program, the state will receive enhanced federal matching funds equal to about 66 percent of the projected cost of these services.

State-Only Treatment Program. In addition, the budget provides $9 million from the Tobacco Settlement Fund to provide treatment for uninsured and underinsured women who do not qualify for the new Medi-Cal benefit. Finally, in an effort to make Medi-Cal and the Breast Cancer Treatment Program (BCTP) more comparable, the Legislature expanded the existing BCTP to add cervical cancer treatment to the breast cancer services already provided under the program.

Public Health Programs

New Public Health Programs. The budget approves without change two public health program initiatives proposed by the Governor. The measure appropriates $20 million from the Tobacco Settlement Fund for youth smoking prevention programs. This money would be spent on grants for youth coalitions and local agencies to engage in antitobacco education efforts, local enforcement of the law prohibiting tobacco sales to minors, and studies of youth tobacco use trends. Another $20 million was allocated from the Tobacco Settlement Fund to provide treatment for prostate cancer for low- income uninsured men. This funding level doubles the amount of funding provided for this purpose in 2000-01.

Community Health Clinics. As passed by the Legislature, the budget included a total of $16 million in augmentations from the General Fund for grants to health clinics providing indigent health care. This sum included an additional $10 million for the Expanded Access to Primary Care (EAPC), $2 million for Rural Health Services Development grants, $2 million for the Seasonal Agricultural and Migrant Workers program, and $2 million for the Indian Health Clinics program. The Governor signed into law the increase in funding for EAPC but vetoed the other augmentations.

The AIDS Programs. The Legislature augmented the AIDS Drugs Assistance Program (ADAP) by $15.3 million from the General Fund to address a projected deficiency in the amount of funding available for the program to provide drugs to eligible HIV-infected persons (primarily individuals with incomes up to 400 percent of the FPL). A deficiency otherwise was likely to result from caseload changes, increases in drug costs, and a shortfall in federal funding for the program. While the Governor accepted this funding increase as part of the budget he signed, he vetoed from the budget $4 million from the General Fund for AIDS-related education and prevention programs.

The CHDP. The state Child Health and Disability Prevention (CHDP) program pays health care providers for completing health screens and immunizations of low-income children who are uninsured. The budget shifts about $63 million of the cost for support of the program to the new Tobacco Settlement Fund. This funding takes the place of General Fund revenues allocated to the program in the prior year.

As passed by the Legislature, the budget included $6.7 million from the General Fund and $1.9 million in federal funds to raise the standard of preventive care for children in CHDP to the level currently available in Medi-Cal. However, this funding was vetoed by the Governor.

Other Vetoes of Public Health Program Funding. The Governor used his veto authority to reduce by $5 million (General Fund) the budget for media campaigns to prevent teen pregnancy. He also vetoed $2 million from the General Fund for subventions for local public health programs, $2.6 million from the General Fund for maternal and child health services, and a $2 million legislative augmentation from special funds to strengthen local enforcement of laws to prevent lead poisoning of children, among other actions.

Department of Developmental Services

The budget provides nearly $1.9 billion from the General Fund ($2.7 billion all funds) for services provided to individuals with developmental disabilities residing in developmental centers and in the community. As noted earlier, the General Fund appropriation reflects a technical shift for budget display purposes of $607 million from Medi-Cal to the Department of Developmental Services.

Community Programs. The 2001-02 budget includes a total of $1.5 billion from the General Fund ($2.1 billion all funds) for community services for the developmentally disabled, an increase of $189 million over the prior fiscal year after taking into account the technical funding shift discussed above. Of this increase, $175 million from the General Fund is allocated to Regional Centers to provide services for an additional 9,535 persons with developmental disabilities (a 5.9 percent increase in caseload) and to offset cost increases for these community-based services.

More than $7 million from the General Fund was allocated in the budget passed by the Legislature for an enhanced system for reporting abuse, neglect, and exploitation of persons with developmental disabilities; the Governor used his veto authority to reduce that amount by $1.7 million. The Governor also vetoed a $2.6 million legislative augmentation that had been provided for rate increases for in-home and out-of-home respite workers and certain day program providers, as well as $2.6 million initially proposed in the Governor's budget to increase clinical staffing in Regional Centers for the Early Start Program.

Developmental Centers. The budget provides a total of $322 million from the General Fund for operations of the developmental centers ($600 million all funds). The General Fund amount reflects a reduction of $105 million from the prior fiscal year after adjusting for the technical funding shift from Medi-Cal. The General Fund amount is lower than last year because of a projected decline in the population of developmental centers (a decrease of 160 residents or a 4.1 percent drop in caseload); increased federal support for the Agnews and Sonoma developmental centers, and two new facilities— Canyon Springs and Sierra Vista; and the inclusion in last year's budget of significant onetime funding for special repairs and other projects.

Department of Mental Health

The budget provides about $1 billion from the General Fund ($2.1 billion all funds) for mental health services provided in state hospitals and in various community programs.

Community Programs. The 2001-02 budget includes a total of $487 million from the General Fund ($1.5 billion all funds) for local assistance for the mentally ill, an increase of $65 million in General Fund monies over projected prior-year expenditures. The budget provides for a $134 million increase (all funds) in expenditures for mental health services for children provided under the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program, not counting a further $18 million increase (all funds) for therapeutic behavioral services for EPSDT clients. The budget also includes an additional $10 million from the General Fund to further expand services for homeless mentally ill adults.

Among the actions affecting General Fund expenditures, the Governor vetoed a $2 million legislative augmentation to provide respite care for mentally ill, $5 million for supportive housing programs, $5 million to provide a 3 percent cost-of-living increase for managed care programs, $6 million for crisis intervention and stabilization assistance teams, $2 million for the children's system of care, and a $350,000 legislative augmentation for a new state commission to advocate for improved mental health care.

State Hospitals. The budget provides a total of $435 million from the General Fund for state hospital operations ($586 million all funds). The state hospital budget was reduced by $10.5 million from the General Fund by the Legislature to adjust for actual patient population trends, but does provide funding for a projected increase of 166 patients during the budget year. The Governor vetoed $2.6 million from the General Fund for security improvements at several state hospitals, leaving $5 million in the budget for this purpose, but proposed to restore the funding in the 2002-03 fiscal year.

Department of Alcohol and Drug Programs

The budget provides $243 million from the General Fund ($635 million all funds) for drug and alcohol treatment programs, an increase of about $50 million from the General Fund over the prior fiscal year.

Proposition 36 Funding. The increase in the General Fund budget for the department is primarily the result of the $120 million appropriation mandated by voter approval last November of Proposition 36, which mandated substance abuse treatment for certain offenders convicted of nonviolent drug possession offenses. The budget does not include a proposal by the Governor to provide $8.4 million in federal funds for drug testing of Proposition 36 offenders because the Legislature decided to provide that funding in separate legislation addressing the drug-testing issue.

Vetoes to Reduce Treatment Services. The budget passed by the Legislature included $5.7 million for drug and alcohol treatment services for youth which the Governor had proposed to delete in the May Revision. Subsequently, the Governor vetoed this funding as he signed the budget. The Governor had also proposed an $8.5 million reduction in Drug Court programs. That reduction was rejected by the Legislature. The Governor later used his veto authority to reduce Drug Court funding by a lesser amount of $3 million.

Health Insurance Portability and Accountability Act

Some Funding in Separate Bill. The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that, among other provisions,
establishes national standards and requirements for the transmission, storage, and handling of certain electronic health care data. The budget provides about $24 million from the General Fund ($92 million all funds) to support state efforts to comply with HIPAA. Roughly half of the funding is appropriated in the 2001-02 Budget Act, with the remainder to be appropriated in SB 456 (Speier), pending policy legislation that will establish a statutory framework for the state's HIPAA compliance activities. The allocations of HIPAA funds are summarized in Figure 8.

Social Services

In this section, we describe the major features of the social services funding in the state spending plan. General Fund support for social services programs in 2001-02 totals $8.3 billion, an increase of 7.2 percent over the prior year. This growth in expenditures is primarily due to funding caseload growth, cost-of-living adjustments (COLAs), and In-Home Supportive Ser vices (IHSS) wage and benefit increases. Figure 9 shows the changes in expenditures in the major social services programs.

CalWORKs

The budget includes $2 billion from the General Fund in the Department of Social Services (DSS) budget for the California Work Opportunity and Responsibility to Kids (CalWORKs) program in 2001-02, which is an increase of 6.6 percent over 2000-01.

The CalWORKs Grants. The budget includes $138 million (combined General Fund and federal Temporary Assistance for Needy Families [TANF] block grant funds) to provide a 5.31 percent COLA pursuant to current law. Effective October 1, 2001, the maximum monthly grant for a family of three in high-cost counties will increase by $34 to a total of $679, and grants in low-cost counties will increase by $33 to a total of $647 (See Figure 10).

County Performance Incentives. As an additional incentive for counties to move CalWORKs recipients into employment, the CalWORKs legislation provided that savings resulting from increased earnings and employment may be paid to the counties as performance incentives. Through 1999-00, counties had earned approximately $1.2 billion in performance incentives. Beginning in 2000-01, payments for incentives are now subject to annual budget appropriations and counties are prohibited from earning new incentives until the obligation owed for previously-earned incentives ($97 million) is paid. The budget reduces county performance incentives by a net amount of $230 million (in federal TANF funds) by (1) eliminating the $250 million 2000-01 appropriation and (2) including $20 million in 2001-02 towards payment of the $97 million arrearage. No funding is included for new incentives earnings.

Welfare-to-Work Matching Funds. Under the Welfare-to-Work block grant program, the federal government provides funds to serve low-income persons with specific barriers to employment. For every $2 in block grant funds, states must spend $1 in matching funds. California's matching funds are appropriated to county welfare departments as part of the CalWORKs program. Because recent federal legislation extended California's deadline for expending its federal funds, the budget reduces the appropriation of state matching funds by $59.6 million, to $29 million. The remaining obligation ($59.6 million) must be paid by July 2004.

Child Care. Under Proposition 10, revenues generated from tobacco-product taxes are deposited into the California Children and Families Trust Fund, which supports early childhood development programs. The budget assumes $25 million in Proposition 10 funds will be dedicated for CalWORKs Stage 1 child care. However, Proposition 10 funds are controlled by the California Children and Families Commission, and may not be appropriated by the Legislature. If approved by the commission, the $25 million in Proposition 10 funds would be countable towards the state's maintenance-of-effort (MOE) requirement. The budget, therefore, reduced General Fund spending in CalWORKs by the same amount. We note, however, that the commission voted to reject the child care funding proposal. Given the state's MOE requirement, this development may result in a General Fund shortfall of $25 million.

Employment Training Fund (ETF). The Employment Training Panel supports employment training programs with revenues from an employer tax. The budget includes $61.7 million in ETF funds for CalWORKs employ ment services, an increase of $31.7 million compared to the prior year. General Fund spending is reduced by the same amount, since ETF funds are countable towards the state's MOE requirement.

Parental Eligibility. The budget permits counties to continue to provide employment services for up to 180 days to parents whose children have been removed from the home if (1) the children are likely to reunify with the parents and (2) services are determined necessary for reunification. Under prior law, CalWORKs eligibility continued for only one month after a child's absence, regardless of the likelihood of reunification. The budget includes no appropriation for these changes and we estimate the net fiscal cost to be approximately $2 million annually.

Tracking Time Limits. Generally, adult CalWORKs recipients are limited to 60 months of grant payments and up to 24 months of employment services. The Welfare Data Tracking Implementation Project (WDTIP) was implemented in 1999 in order to track recipients' time on aid. Although most counties have completed WDTIP implementation, some have not. Budget legislation specifies that counties are (1) required to provide specified information in order to track time on aid and (2) subject to financial penalties if failure to provide information results in incorrect grant payments.

Budgeting Methodology. The budget legislation makes two changes to the CalWORKs budgeting methodology. Specifically, the budget requires DSS to (1) establish a process whereby underfunded counties may seek additional county block grant funds for employment services in 2001-02 and
(2) work with stakeholders to develop a new overall budgeting methodology for CalWORKs beginning in 2002-03.

Food Stamps Program

Permanent Expansion of State-Only Program for Legal Noncitizens. With respect to noncitizens, current federal law generally limits food stamp benefits to legal noncitizens who immigrated to the U.S. prior to August 1996 and are under the age of 18 or were at least 65 years old as of August 1996. In response to these federal restrictions, the California Food Assistance Program (CFAP) was created in 1997 to provide state-only funded food stamp benefits to pre-August 1996 legal immigrants who are ineligible for federal benefits. In 1999 and again in 2000, CFAP eligibility was temporarily expanded to also include post-August 1996 legal immigrants. The budget legislation eliminates the sunset of benefits for post-August 1996 immigrants (scheduled for October 1, 2001), and includes $5 million associated with this expansion.

Vehicle Resource Rules. Recent federal changes exempt certain low-value vehicles from the asset test for the purpose of determining food stamp eligibility, thereby making more persons eligible for food stamp benefits. Because state law links the CalWORKs and CFAP asset tests to food stamp rules, these federal changes result in higher food stamp, CalWORKs, and CFAP caseloads. The budget includes $35.8 million (combined TANF and General Fund) for costs associated with these changes.

Supplemental Security Income/
State Supplementary Program

The budget includes $2.8 billion from the General Fund for the program in 2001-02, which is an increase of 10.4 percent over 2000-01.

Grant Payments. Pursuant to current law, the budget provides for the statutory COLA (5.31 percent) for Supplemental Security Income/State Supplementary Program (SSI/SSP) grants, at a General Fund cost of $143 million in 2001-02. Effective January 1, 2002, the maximum grant for aged and disabled individuals will increase by $38 to a total of $750 per month and the grant for couples will increase by $67 to $1,332 per month (see Figure 10, page 35).

Cash Assistance Program for Immigrants (CAPI). With respect to noncitizens, current federal law generally limits SSI/SSP benefits to noncitizens who were (1) on aid prior to August 1996 or (2) in the U.S. prior to August 1996 and subsequently became disabled. Created in 1998, CAPI provides state-only funded SSI/SSP benefits to aged immigrants who lived in the U.S. prior to August 1996. In 1999 and again in 2000, CAPI eligibility was temporarily expanded to also include post-August 1996 immigrants. Such immigrants are subject to a deeming provision, under which a sponsor's income is counted for the purposes of determining eligibility. The budget legislation (1) eliminates the sunset of benefits for post-August 1996 immigrants (scheduled for October 1, 2001) and (2) increases the deeming period from five years to ten years. The net effect of these changes is a General Fund cost of $17 million in 2001-02.

In-Home Supportive Services

The budget includes $915 million from the General Fund for the IHSS program in 2001-02, which is an increase of 26.3 percent over 2000-01.

Provider Wage Increases. Under prior law, state participation in a $1 per-hour wage increase for workers in public authorities was contingent upon state revenue growth being at least 5 percent. Budget legislation suspends this revenue "trigger" requirement during 2001-02, resulting in an estimated General Fund cost of $23.7 million (associated with a $1 increase in hourly wages). In addition, the budget provides $6.4 million for a 2.3 percent COLA adjustment for IHSS providers who do not work in public authorities.

Child Welfare Services and Foster Care

The budget for Child Welfare Services includes $642 million from the General Fund for local assistance, which represents a 5 percent increase over the prior year. The budget for foster care includes $412 million from the General Fund for local assistance, representing a 7 percent increase over 2000-01 expenditures.

New Emancipation Program for Foster Youth. The 2001-02 budget provides $6.5 million from the General Fund to create the Supportive Transitional Emancipation Program which extends foster care grants to certain emancipated foster youth participating in an education or training program up to age 21.

Foster Care Health and Education Data Pilot. The budget provides $1.5 million from the General Fund to pilot test a project in Los Angeles County designed to improve the collection of health and education data about foster youth.

Transitional Housing Program Expansion for Former Foster Youth. The
2001-02 budget provides $10 million from the General Fund to create the Transitional Housing for Foster Youth Fund to expand the number of youth served by the Transitional Housing Placement Program (THPP) and to increase the rate paid to THPP providers.

Juvenile Crime Prevention Program Eliminated. The 2001-02 budget eliminates $9.7 million from the General Fund for the Juvenile Crime Prevention Program. This ends the program that was created in 1995 to fund 12 pilot sites throughout California to provide crime prevention services to at-risk youth and their families.

Child Support

The budget includes $435 million from the General Fund for local assistance, a 20 percent increase over 2000-01. Total child support collections for
2001-02 are projected to be $2.3 billion, or an 11 percent increase over 2000-01.

Delayed County Performance Incentives. The 2001-02 budget delays implementation of a $6.1 million General Fund county child support incentive program created by Chapter 478, Statutes of 1999 (Kuehl).

Child Support Recovery Fund Created. The 2001-02 budget creates the Child Support Recovery Fund in order to meet federal requirements to report interest earned on child support collections prior to distribution.

Employment Development Department

The budget includes $30 million from the General Fund for the Employment Development Department in 2001-02, which is a decrease of 14 percent from 2000-01.

Governor's Faith-Based Initiative. The budget includes $4 million from the General Fund to support a second round of competitive grants to faith-based organizations to provide social services.

Judiciary and Criminal Justice

The 2001 budget signed by the Governor for judicial and criminal justice programs totals about $8.3 billion, including $7.6 billion from the General Fund and $764 million from federal and special funds. The total amount is a decrease of $26 million, or less than a 1 percent decrease from 2000-01 expenditures. However, the General Fund total represents a decrease of $34 million, or 0.4 percent, relative to 2000-01 expenditures. The slight decrease in the General Fund amount is the result of (1) one-time expenditures for local law enforcement included in the 2000-01 budget that were not included in the 2001-02 budget, and (2) small increases in overall expenditures in Youth and Adult Correctional Agency budgets related to medical and mental health services and other operational costs. Figure 11 shows the changes in expenditures in some of the major judicial and criminal justice budgets.

Governor's Vetoes. The Governor vetoed $34 million in criminal justice related expenditures. The deleted funding was for a number of specific programs and projects sought by the Legislature.

Court Related Funding

The budget includes $2.1 billion for support of trial courts. This amount includes $1.2 billion from the General Fund, $475 million transferred from counties to the state, and $463 million in fine, penalty, and court fee revenues. The General Fund amount is $29 million, or 2.5 percent, greater than the current-year amount. The increase includes a number of new expenditures, such as $22.5 million for cost increases and additional levels of service for security, and $8 million for increased charges for county-provided services.

The budget also includes $9.5 million for the Equal Access Fund which provides funding to local nonprofit agencies for legal aid to indigent populations.

Corrections

The budget contains a total of $4.6 billion from the General Fund for support of the California Department of Corrections (CDC). This represents an increase of $122.3 million, or 2.7 percent, above the 2000-01 level. The primary reasons for this growth are funding increases for health care services and the replacement of electromechanical prison doors.

The budget provides full funding for the projected inmate and parole caseloads in the budget year. The caseload funding level is actually $81 million less than estimated current-year expenditures due to projected declines in the number of inmates and increases in the parole population. Specifically, the budget assumes that the inmate population will be about 157,660 at the end of the budget year, a decrease of 4,137 inmates from the end of 2000-01. The projected budget-year population is about 5,665 inmates fewer than was initially assumed in the Governor's January budget. This decline in inmate population is due primarily to the implementation of Proposition 36, which diverts certain drug offenders who would otherwise be sent to prison, into drug treatment programs. The parole population is projected to reach about 126,149 parolees at the end of the budget year, an increase of 3,900 parolees from the end of 2000-01.

Federal Funds for Incarceration and Supervision of Undocumented Felons. The budget also assumes that the state will receive a total of $189.2 million in federal funds to offset the state's costs of supervising undocumented felons in CDC and the Department of the Youth Authority. This is about $10 million more than assumed in 2000-01. These federal funds are counted as off sets to state expenditures and are not shown in the budgets of the CDC and the Youth Authority or in the budget bill.

Department of the Youth Authority

The budget provides $348 million from the General Fund for support of the Youth Authority. The department's budget reflects an increase of 2.7 percent over the 2000-01 level, despite a small projected decline in the number of wards and parolees in the budget year. The increase primarily results from new initiatives proposed by the Governor related to mental health, substance abuse, and sex offender treatment for wards and parolees. These initiatives reflect priorities set forth in legislative augmentations in the 2000-01 budget which the Governor vetoed.

Assistance to Local Law Enforcement

The budget includes approximately $216.9 million in funding to assist local law enforcement agencies.

Citizens' Option for Public Safety (COPS) Program. The budget includes $116.3 million to continue the COPS program, a decrease of $5 million from the amount provided in 2000-01. The program provides discretionary funding on a per capita basis, for local police departments and sheriffs for front line law enforcement (with a minimum guarantee of $100,000), sheriffs for jail services, and district attorneys for prosecution.

High Technology Crime Programs. The budget includes $41 million for three high technology related law enforcement programs:

• $35.4 million for grants to local law enforcement agencies for high technology equipment purchases.
• $7.7 million to expand the existing High Technology Theft, Apprehension, and Prosecution (HTTAP) program overseen by the Office of Criminal Justice Planning.
• $3.3 million to create a High Technology Identity Theft program within each of the existing HTTAP task forces.

War on Methamphetamine. The budget includes $30 million for local law enforcement in the Central Valley for antimethamphetamine activities. Of this amount, $15 million is one-time, and $15 million would be ongoing. (In addition, the budget provides $10.5 million from the General Fund for the California Methamphetamine Strategy program to backfill for the loss of federal funds for the program.)

Local Forensic Labs. The budget includes $25 million for grants to local forensic labs for equipment and capital related expenditures. The 2000-01 budget included $96 million for a joint lab for the Los Angeles Police and Sheriff's Departments.

Rural and Small County Law Enforcement Assistance Program. The Governor stated his intention to sign a trailer bill which appropriates $18.5 million to sheriff departments in 37 rural and small counties. Each county will receive $500,000.

Assistance for Local Juvenile Justice Programs

Discretionary Juvenile Justice Funding. The budget also includes $116.3 million—the same amount as the COPS program discussed above—to fund the juvenile justice provisions of the Crime Prevention Act of 2000 (AB 1913, Cardenas), a $5 million decrease from 2000-01. These funds go to county level juvenile justice coordinating councils to support locally identified needs related to juvenile crime.

Local Detention Facilities. The budget also includes $40 million (federal funds) for competitive grants to counties for construction and renovation of local juvenile detention facilities. Of that amount, $6 million could be made available for adult jail construction.

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