The 2016-17 Budget

California Spending Plan

Judiciary and Criminal Justice

The 2016–17 budget provides $12.6 billion from the General Fund for judicial and criminal justice programs, including support for ongoing programs and capital outlay projects, as shown in Figure 34. This is an increase of $518 million, or 4 percent, above the revised 2015–16 General Fund spending level.

Judicial Branch

The budget provides $3.7 billion for support of the judicial branch—an increase of $293 million, or 9 percent, from the revised 2015–16 level. This amount includes $1.7 billion from the General Fund and $499 million from the counties, with most of the remaining balance from fine, penalty, and court fee revenues. The General Fund amount is a net increase of $109 million, or 7 percent, from the revised 2015–16 amount. Funding for trial court operations is the single largest component of the judicial branch budget, accounting for around four–fifths of total spending.

General Fund Support for Trial Court Operations. The budget package includes a net $79 million General Fund augmentation to trial court operations in 2016–17. This amount includes the following increases:

• Court Innovations Grants Program ($25 million). The budget provides a one–time $25 million augmentation for a new Court Innovations Grant Program. The program will provide grants on a competitive basis to support trial and appellate court programs and practices that promote innovation, modernization, and efficiency.
• Proposition 47 Workload ($21 million). The budget provides $21 million in 2016–17 for trial courts to process resentencing and reclassification petitions from offenders convicted of felonies that Proposition 47 (2014) reduced to misdemeanors.
• Base Increase ($20 million). The budget includes a $20 million augmentation for trial court operations. Trial courts have full discretion in the use of these funds.
• Health Benefit and Retirement Costs ($16 million). The budget includes $16 million for increased trial court health benefit and retirement costs.
• State Level Reserve ($10 million). The budget package eliminates a current statutory requirement that the judicial branch maintain a statewide reserve of 2 percent of the total funds appropriated for trial court operations for emergencies, unanticipated expenses, or budgetary shortfalls. Instead, the budget provides a one–time $10 million General Fund augmentation to fund a state level reserve that would be available to trial courts for emergencies.

The above augmentations are partially offset by a $34 million reduction in General Fund support for trial court operations in 2016–17 in order to reflect the availability of property tax revenue in accordance with Control Section 15.45 and Section 2578 of the Education Code. Such funds are remitted to the state by counties that collect more property tax than state law allows them to spend on education.

Improvement and Modernization Fund (IMF). In recent years, the judicial branch’s IMF experienced persistent operational shortfalls that steadily depleted the fund balance. (The IMF is a judicial branch special fund that supports various projects and programs that broadly benefit the trial courts, such as information technology [IT] projects.) To address this issue, the budget includes a couple of actions to shift costs from the IMF to the General Fund. For example, the IMF currently provides $7 million annually to support the California Case Management System Version 3 (CCMS V3) in four courts. (The CCMS V3 is a civil, small claims, probate, and mental health case management system.) The budget provides funds to replace this system (at a cost of $25 million over three years). This will eventually eliminate the need for the $7 million expenditure from the IMF.

Capital Outlay. The budget provides $392 million for various court construction projects. This amount consists of (1) $303 million in lease revenue bond authority for the construction or renovation of five previously approved projects (Willows, El Centro, Indio, Redding, and Sonora), (2) $85 million from the Immediate and Critical Needs Account (ICNA) for design and construction activities for ten projects, and (3) $4 million from ICNA for the modification of two existing court facilities in Los Angeles. (ICNA receives revenue from certain court fee and fine increases.)

Corrections and Rehabilitation

The budget act provides $10.5 billion from the General Fund for support of the California Department of Corrections and Rehabilitation. This is a net increase of $308 million, or 3 percent, above the revised 2015–16 level of spending. This increase primarily reflects additional costs related to (1) inmate medical care, (2) the expansion of inmate rehabilitation and alternative custody programs, and (3) debt service on lease revenue bonds. These increases are partially offset by savings primarily related to (1) the conversion of segregated housing units to general population housing units, (2) reduced funding for the basic correctional officer academy, and (3) the use of fewer out–of–state contract beds for inmates.

Adult Correctional Population. Figure 35 shows the recent and projected changes in the inmate and parolee populations. As shown in the figure, the prison population is projected to stabilize at about 129,000 inmates through the end of 2016–17. The parole population is projected to decline from 44,000 to about 43,000 parolees by the end of 2016–17.

Rehabilitation Programming. The budget includes a $64 million increase from the General Fund related to rehabilitation programming. This includes (1) $21 million to expand substance use disorder treatment services, (2) $16 million to expand programs targeted at long–term offenders, and (3) $27 million to expand various other programs (such as inmate education and vocation programs) and support IT projects related to rehabilitation programming.

Inmate Medical Care. The budget includes $2 billion from the General Fund for inmate medical care to comply with the federal court in the Plata v. Brown case, an increase of $54 million, or 3 percent, above the revised 2015–16 level of spending. This includes (1) $36 million for modifications to the Electronic Health Record System, which will serve as the primary health record for all inmates; (2) $12 million to implement a uniform medical supervisory staffing model at all state prisons; and (3) $7 million to augment janitorial services at the California Health Care Facility in Stockton. This increase was somewhat offset by reductions in spending elsewhere, such as on inmate pharmaceuticals.

Alternative Housing Programs. The budget includes $35 million from the General Fund to expand alternative housing for inmates. This includes $32 million for the Male Community Reentry Program, which provides beds in community facilities that prepare inmates for transition out of prison. The remaining $3 million is to expand the Alternative Custody Program to comply with a court order requiring that the program serve male inmates.

Segregated Housing Unit Conversion and Investigative Services Unit (ISU) Staffing. The budget includes a $22 million net General Fund reduction related to the conversion of segregated housing units to less expensive general population housing units. This includes (1) a $25 million reduction resulting from the conversion of segregated housing units currently holding around 1,000 inmates to general population units and (2) a $3 million increase for 22 positions for the ISU to investigate gang activity.

Department of Justice (DOJ)

The budget provides $575 million for support of DOJ in 2016–17—an increase of $43 million, or 8 percent, from the revised 2015–16 level of spending. This amount includes $216 million from the General Fund—an increase of $11 million, or 5 percent, from the revised 2015–16 level of spending. The budget includes 90 permanent positions and approximately $24 million ($10 million from the General Fund and $14 million from other funds) for DOJ to implement legislation enacted in prior years and to increase DOJ’s capacity to address increased workload. This includes: (1) new workload related to the required reporting of certain data by state and local law enforcement agencies ($10 million), (2) increased enforcement activities related to Medi–Cal fraud or elder abuse ($8 million), and (3) enforcement activities related to the removal of firearms from prohibited persons ($5 million).

In addition, the budget provides 24 positions and about $9 million on a limited–term basis from special funds to support various DOJ activities. This includes 20 positions and $3 million annually over three years from the Gambling Control Fund to address the current cardroom licensing backlog. Most of the remaining funds would come from the Firearms Safety and Enforcement Special Fund to support contracts with local law enforcement agencies who remove firearms from prohibited persons with mental illness and with domestic violence restraining orders.

In addition to funding provided in the budget, the Legislature approved legislation in August—Chapter 281 of 2016 (SB 1187, Lara)—to provide $37 million from the General Fund to DOJ for the payment of a legal settlement to the Pauma Band of Luiseno Mission Indians of the Pauma and Yuima Reservation. This settlement is in regards to payments that the tribe had previously made to the state for operating gaming devices in the state.

Other Criminal Justice Programs

Board of State and Community Corrections (BSCC). The budget includes $223 million ($137 million from the General Fund and $85 million from other funds) for BSCC, which is responsible for administering various public safety grants, overseeing local correctional standards, providing technical assistance to local criminal justice agencies, and collecting data. The budget includes $61 million in one–time General Fund increases for local law enforcement grants. This consists of (1) $20 million to cities to improve relations between police and high–risk populations (such as homeless individuals), (2) $15 million for a pilot program that seeks to divert low–level prostitution and drug offenders into rehabilitation services in lieu of jail and prosecution, (3) $10 million for police station infrastructure in Fresno County, (4) $10 million for regional crime task forces, and (5) $5.5 million for the City of Salinas for violence and gang prevention efforts.

The budget also provides an additional $270 million in lease revenue bonds for adult local criminal justice facilities (such as jails) to be administered by BSCC. Of this amount, $250 million will be allocated through a competitive grant process, with projects that include mental health or rehabilitation program space receiving greater priority. The remaining $20 million will be allocated to Napa County to repair damages its jail sustained in the 2014 earthquake.

Proposition 47. Proposition 47 reduced the penalties for certain crimes and requires that the resulting state savings, as estimated by DOF, be spent on designated programs. Specifically, the measure requires the savings be continuously appropriated as follows: (1) 65 percent for recidivism reduction programs, (2) 25 percent for school truancy and dropout prevention, and (3) 10 percent for victim services. The administration currently estimates that $39 million in state savings will be available for expenditure in 2016–17. Separate from the amount that will be appropriated under Proposition 47, the budget includes one–time funding from the General Fund of (1) $18 million for school truancy and dropout prevention and (2) $10 million for recidivism reduction programs.

Criminal Fine and Fee Revenue. The budget includes various actions—such as expenditure reductions, cost shifts, and cash flow loan authority—to address operational shortfalls and insolvency in various state funds resulting from declines in criminal fine and fee revenue. Such actions primarily include shifting nearly $104 million in costs from various funds that receive fine and fee revenue to the General Fund in 2016–17. This includes $75 million from the Trial Court Trust Fund, $17 million from the Peace Officer’s Training Fund, $9 million from the IMF, and $3 million from the Corrections Training Fund.

Victim’s Compensation and Government Claims Board (VCGCB). In adopting the 2016–17 budget package, the Legislature adopted legislation to shift most of VCGCB’s responsibilities unrelated to victims—such as the Government Claims Program—to other state agencies, including the Department of General Services. Under the legislation, VCGCB will be renamed the Victim Compensation Board and will continue to have responsibility for some non–victim programs (such as compensation of individuals wrongly convicted of crimes and the Good Samaritan Program).