As part of the January 2010 special session to begin bringing the 2009‑10 and 2010‑11 budgets into balance, the Governor proposes statutory changes to reduce the state’s inmate and parolee populations. Specifically, the Governor proposes to require that offenders who have no prior serious or violent offenses and are convicted of certain property and drug felony crimes serve a maximum sentence of one year and one day in county jail in lieu of a state prison sentence. The administration estimates that, if approved by March 1, 2010, these changes would reduce state correctional costs by $25.2 million in 2009‑10 and $291.6 million in 2010‑11. In this brief, we (1) analyze the Governor’s proposal, particularly in the context of recent policy actions to reduce the inmate and parole populations, and (2) recommend modifying the Governor’s proposal to permit counties to place additional jail inmates on electronic home monitoring.