LAO Analysis of the 1997-98 Budget Bill
Criminal Justice Departmental Issues, Part 2-b

  1. Trial Court Funding (0450)
    1. Overview of Trial Court Funding
      1. Current-Year Funding Shortfall Affecting Some Courts
      2. Trial Court Coordination Update
    2. Trial Court Funding Consolidation Proposal
      1. The Governor's Proposal
      2. State Funding Makes Sense, But Cost Controls Needed
    3. Budget Issues
      1. Judicial Council Needs to Further Define Performance Measures
      2. Budgeting Practices Overstate Trial Court Costs
      3. Distribution of Trial Court Funding Should Be Based on Incentives
    4. New Programs Proposals And Augmentations
      1. New Judgeships Not Justified
      2. Assigned Judge Program
      3. Augmentation Not Justified
      4. Concerns With Statewide Jury System Improvements Request

Trial Court Funding

(0450)

The Trial Court Funding Program requires the state to assume primary responsibility for funding the operations of the trial courts in counties that choose to participate in the program. The Trial Court Realignment and Efficiency Act of 1991, expressed the Legislature's intent to increase the state's support for trial courts by 5 percent per year, from 50 percent in 1991-92 to a maximum of 70 percent in 1995-96. (State support has not approached these levels. Assuming, as the budget does, that fine and forfeiture funds are transferred to the courts in the current year, the state will pay about 41 percent of the costs of trial courts and the counties pay the remaining 59 percent.)

The budget proposes total expenditures of $1.7 billion for support of the Trial Court Funding Program. This is $48 million, or 3 percent, greater than estimated current-year expenditures. The program, as represented in the Governor's budget, is supported by appropriations from the Trial Court Trust Fund, which include:

Budget Does Not Accurately Reflect Administration's Proposal. The budget overstates the administration's estimate of revenues to the Trial Court Trust Fund by a total of $21.2 million, as reflected in the trial court consolidation trailer bill. First, the General Fund appropriation is overestimated by $7.5 million because the budget assumes transfer of certain traffic violator fees to cities that was not enacted in the current year. Second, the county contribution portion of the trust fund ($890 million) is overstated by $10.7 million because it does not take into account the administration's proposal for the state to require no contribution from the 20 smallest counties. In addition, the budget overestimates the fine and forfeiture revenues ($291 million) by $3 million due to a technical adjustment.

Overview of Trial Court Funding

There are two components of the program: (1) Trial Court Funding (Item 0450) and (2) Contributions to the Judges' Retirement Fund (Item 0390). Figure 27 shows proposed expenditures for the trial courts in the past, current, and budget years. We discuss the elements of Item 0450 below.
Figure 27
Trial Court Funding Program

1995-96 Through 1997-98

(In Millions)
Actual

1995-96

Estimated

1996-97

Proposed

1997-98

Trial Court Funding (Item 0450)
Trial court operations $1,531.5 $1,601.7 $1,641.5
Assigned judges program 12.7 18.3 19.6
Subtotals ($1,544.2) ($1,620.0) ($1,661.1)
Judges' Retirement Fund (Item 0390) $55.7 $52.7 $59.6
Totals $1,599.9 $1,672.7a $1,720.7
Source: Governor's budget.
aPreliminary information from Judicial Council indicates expenditures of $1.5 billion, instead of $1.7 billion.


Courts Request More Than Budget Proposes. Under current law, the Trial Court Budget Commission (TCBC) reviews the budget requests submitted by the trial courts. The trial courts made requests to the TCBC for 1997-98 that totaled about $1.9 billion. The TCBC reduced those requests to $1.8 billion, which is the amount it presented to the administration as its proposed Trial Court Funding budget for 1997-98. However, the Governor's Budget reduced the amount requested by the TCBC by an additional $146 million, or 8 percent.

It should be noted that preliminary information obtained from the Judicial Council indicates that the total expenditures for trial court functions will be approximately $1.5 billion for the current year, rather than the $1.7 billion shown in the Governor's budget. This difference is primarily due to the fact that many counties have not provided the level of funding that was anticipated in the 1996-97 Budget Act. Additionally, we note that actual expenditures for trial court functions in 1995-96 are $194 million lower than indicated in the Governor's budget.

Figure 28 shows actual expenditures for the trial courts in 1995-96 by various functional categories.
Figure 28
Total State and County Expenditures

Trial Court Operations

1995-96 Through 1997-98

(In Millions)
Trial Court Functions Actual

a

1995-96



Estimated

1996-97

Proposed

1997-98

Judicial officers $185.5 $190.1 $193.6
Jury services 39.5 42.9 56.9
Verbatim reporting 137.1 140.7 142.2
Interpreters 36.6 36.1 36.1
Collection enhancements 28.9 -- --
Dispute resolution programs 26.3 34.1 34.1
Court-appointed counsel 46.3 39.1 39.1
Court security 225.3 239.0 248.5
Information technology 108.3 158.2 158.2
Staff and other operating expenses 667.0 676.7 690.9
Indirect costs 30.8 44.6 41.8
Totals $1,531.5 $1,601.7 $1,641.5
aDiffers from amount shown in Governor's budget.


Current-Year Funding Shortfall Affecting Some Courts

As a result of the failure of Assembly Bill 2553 (Isenberg), the implementing legislation for last year's consolidation of trial court funding, the Judicial Council has indicated that a number of trial courts are projecting funding shortfalls in the current year. We recommend that the Judicial Council advise the Legislature during budget hearings on the status of the current-year funding issues.

Last Year's Trial Court Restructuring Proposal Failed Passage. The 1996-97 Governor's Budget proposed to consolidate the costs of operating the trial courts at the state level. This proposal was contained in AB 2553 (Isenberg) which failed passage. As a result, there is less state money available for support of the trial courts in the current year than anticipated in the 1996-97 Budget Act.

Shortfall in the Current-Year Budget. Historically, counties have remitted fine and forfeiture revenues (estimated to be $291 million in the current year) to the state General Fund to offset the state's costs of supporting the trial courts. Assembly Bill 2553 would have deposited fine revenues into the Trial Court Trust Fund (rather than the General Fund) for allocation to the counties. The 1996-97 Budget Act assumed the enactment of AB 2553 and appropriated an equivalent amount of fine revenues from the trust fund for the Trial Court Funding Program. Because of the failure to enact AB 2553, however, the fine revenues continued to be deposited into the General Fund, and there is no appropriation authority for the expenditure of these receipts.

This situation has led to a current-year shortfall of approximately $291 million for the budgets of the trial courts. In addition to this loss of fine revenues, AB 2553 contained provisions to increase court fees by an estimated $90 million in the current year. As a consequence of the failure of AB 2553, the trial courts will have to reduce their budgets by $90 million in the current year, or the counties will have to make up the difference.

Judicial Council Responses to Trial Court Funding Shortfall. In response to the decreased amount of state funding, the Judicial Council has accelerated the release of General Fund monies to the counties for support of the trial courts. Specifically, in October 1996, the Judicial Council distributed all of the remaining General Fund appropriation for the year except for two dollars per county to be distributed in the last two quarters. In addition, the council has provided advances totaling $1.7 million for statewide automation projects to the 19 courts most reliant on state funding. Figure 29 shows the 19 counties deemed most reliant on state funding by the Judicial Council.
Figure 29
Trial Court Funding

Counties Considered Most Reliant on State Funding

Alpinea Madera Mono Siskiyou
Colusaa Mariposa Monterey Suttera
Glenna Mendocinoa Nevadaa Yoloa
Imperial Merceda San Benito Yubaa
Inyoa Modoca Sierraa
aAmong the 16 counties that the Judicial Council indicated will deplete funding by the end of February 1997.

Judicial Council Indicates That Some Courts May Close Operations.The Judicial Council has recently projected that there are 16 courts that will deplete all of their funding by the end of February 1997. Most of these are smaller courts, and all are more than 50 percent dependent on state funds for their budgets. They include 12 of the 19 counties that received advances from the amounted budgeted for automation projects (shown in Figure 3), plus four other counties (Humboldt, Lassen, Plumas, and Tulare).

Legislative Solution Pending. Assembly Bill 86 (Pringle), SB 9 (Lockyer), and SB 37 (Johannessen) are three trial court funding bills currently pending before the Legislature. The Department of Finance has indicated that AB 86 will be the trailer bill which will carry the Governor's trial court funding proposals for the budget year. Both AB 86 and SB 9 currently have provisions to appropriate the fine and forfeiture revenues from the General Fund to the Trial Court Trust Fund. For the current year, SB 21 (Lockyer) would appropriate the fine and forfeiture revenues ($291 million) to provide funding for the trial courts in the current year.

Legislature Provided Emergency Funding Last Year. State law provides a procedure for trial courts to seek additional funds from counties if budgeted funds are insufficient to meet the needs of the court. In late 1995, the Los Angeles Superior Court and the Orange County Superior Court commenced actions to compel their respective counties to provide additional funds. Those actions were discontinued with the passage of Chapter 42, Statutes of 1996 (SB 99, Kopp) which provided $26.3 million to meet the critical needs of the courts in 1995-96 fiscal year. The Judicial Council has indicated that the courts in Orange and Lassen Counties have begun similar proceedings for the current year.

Judicial Council Should Continue to Update the Legislature on Current-Year Funding Issues. Because of the significant implications of the shortfall, we recommend that the Judicial Council report to the Legislature during budget hearings on the status of current-year funding issues.

Trial Court Coordination Update

The Judicial Council has made positive steps toward furthering the coordination of judicial and administrative resources in the trial courts. Given the decentralized nature of the courts, it will be important for the council and the Legislature to continue to closely monitor implementation of the coordination requirements.

Trial court coordination requirements have existed in statute since 1991. However, courts were given considerable independence in coordinating their operations. As a result, no standards existed by which to measure the statewide coordination efforts of trial courts until 1995.

What Is Coordination? The goal of trial court coordination is to increase the efficiency of court operations, thereby improving the service to the public. Coordination efforts have focused on coordinating the judicial and administrative functions of the courts (superior and municipal) in a county thereby reducing the number of judicial and administrative structures to one per county. Judicial coordination employs cross-assignment of superior and municipal court judges to handle backlogs. Thus, a superior court judge could be assigned to handle municipal court cases and vice versa. Administrative coordination consists of merging the administrative operations of the courts within counties. Examples include the provision of jury services by one office for all the courts within a county, or having one budget staff for all the courts within a county.

Geographical factors can pose particular problems, particularly in large counties. To address this issue, the Judicial Council has approved regional coordination plans which would allow two or more groups of courts within a county to coordinate their operations. This approach reduces the overall number of judicial and administrative structures, but would allow more than one per county. San Diego, Los Angeles, and Orange counties have each pursued this approach.

Level of Coordination Varies. Currently, the level of coordination among courts varies substantially. For example, in some counties administrative operations of the courts have been completely or partially merged. In other counties, there is substantial judicial coordination through cross-assignment. For a few counties, all operations (judicial and administrative) have been totally consolidated. Finally, in some counties there have been few coordination efforts implemented.

The Judicial Council has indicated that one good measure of the degree of coordination in the courts is to consider whether the courts have consolidated to the point where there is one presiding judge for the county and whether there is one executive officer for the courts of a county. Using this measure, Figure 30 (see page 140) shows the extent of court coordination in California. Courts that tend to be the most coordinated will have one presiding judge and one court executive officer. Those courts that have made some progress in implementing coordination will have a single court executive officer for all the courts in the county, or for at least two of the courts in the county. Those courts that are the least coordinated will have multiple presiding judges and multiple court executive officers. The figure shows that progress towards coordination has been made in the courts of some counties. However, six years after the Legislature directed courts to coordinate, there are still 19 counties which have multiple presiding judges and court exetureve officers. We would note that the figure does not tell the whole story, however, especially as it relates to the larger courts. For example, although Los Angeles County has several courts within one administrative structure, many courts representing the majority of judges have not fully coordinated their operations.

Progress Towards Implementation of Coordination Plans. Trial courts are required to submit to the Judicial Council every two years a county coordination plan. The initial coordination plans for 1995-96 and 1996-97 have been submitted by all the courts and have been approved by the Judicial Council. In addition, the Council required the trial courts to submit a unified budget for all the trial courts within a county for 1997-98. The Council indicates that it has received unified budgets from 51 counties. The remaining seven counties submitted a total of 44 separate court budgets.

The Judicial Council advises that it does not have up-to-date information on the progress in implementing the coordination plans. By July, the Council will complete a review of the status of implementation of administrative and judicial coordination in all of the trial courts. This review

will assess the implementation progress of the elements of the plans for each court.

The next coordination plan, for 1997-98 and 1998-99 is required by statute to be submitted to the Judicial Council by March 1997. The Judicial Council has indicated that it will ask for an extension to July 1997 so that it can finish its implementation review process prior to the submission of the new plans. The extension should allow the review process to aid courts in drafting their new plans.

What Can the Legislature Do to Further Coordination? Courts that coordinate to the greatest extent possible benefit from greater efficiency and flexibility in the assignment of trial court judges, which reduces the need to create new judgeships in the future to handle increasing workload. Additionally, coordination leads to greater efficiencies in court administration, such as improving the management of court records, and reduces general court administrative costs.

The Legislature has made efforts to ensure that courts continue with coordination efforts. For example, the Legislature enacted SCA 4 (Lockyer), which would permit superior and municipal courts with a county to fully consolidate their operations if approved by a majority of the superior court judges and municipal court judges in the county. If the judges vote to consolidate the courts, the municipal courts of the county would be abolished and all municipal court judges and employees would become superior court judges and employees.

If the state takes over funding for the courts, as the Governor proposes, it will be important for the Legislature to continue to provide incentives for courts to coordinate and consolidate their operations. There are a number of ways that the Legislature could do this. For example, the Legislature could create new judgeships only in those courts that have coordinated to the greatest extent possible. Additionally, the Legislature could ensure that the distribution of funds to courts contain incentives for courts to coordinate, and that the new programs are funded and established first in those courts that are achieving the efficiencies through coordination. Later in this analysis, we discuss some of these methods for ensuring that the courts pursue coordination.

Trial Court Funding Consolidation Proposal

The Governor's Proposal

The Governor's budget proposes to consolidate the costs of operating the trial courts at the state level, requiring no contribution from the 20 smallest counties, capping the contribution from the other counties, and making the state responsible for future funding increases.

The budget proposes to consolidate the costs of operating trial courts at the state level, thereby redefining the financial responsibility of the state and the counties in the operation of the trial courts. Figure 31 summarizes the major provisions of the plan. The Governor's plan is similar to last year's plan which failed passage in the Legislature.
Figure 31
Major Features of the Trial Court Funding

Consolidation Proposal

Establishes a cap on the county contribution from 38 largest counties--$879 million.
State pays 100 percent cost of the 20 smallest counties.
State funds future court cost increases.
Counties would transfer $288 million in fine and penalty revenues to the Trial Court Trust Fund, rather than the General Fund.
Increases court filing fees to generate an additional $88 million.
Counties fund all costs for court facilities, local judicial benefits, and revenue collection activities.


County Contributions Capped. Under the proposal, the county contribution from the largest 38 counties for Trial Court Funding would be capped at $879 million. This amount is roughly equal to the level of funding provided by these counties in 1994-95 for support of trial court operations. This county contribution, which would not increase over time, would be deposited into the Trial Court Trust Fund and appropriated in the Budget Bill.

Small County Buy-Out. Under the proposal, the state would pay for 100 percent of the costs of supporting the courts in the 20 smallest counties (based on population). Figure 32 lists these counties.

State Responsible for Funding Future Increases. With the county contribution capped, the state would be responsible for funding all future cost increases for trial courts, including costs associated with salary increases, new judgeships, and implementation of new programs.
Figure 32
Trial Court Funding

Counties Proposed for

No County Contribution

Alpine Modoc
Amador Mono
Calaveras Plumas
Colusa San Benito
Del Norte Sierra
Glenn Siskiyou
Inyo Tehama
Lake Trinity
Lassen Tuolumne
Mariposa Yuba


Fines and Penalties No Longer Remitted to the General Fund. Under current law, certain fines and penalties collected by the courts are remitted to the General Fund to offset the state's General Fund cost of the Trial Court Funding Program. Under the Governor's proposal, $288 million in fine and penalty revenue instead would go annually to the Trial Court Trust Fund.

Increases in Court Filing Fees. Court fee revenues are estimated to be $156 million in 1997-98 and are deposited into the Trial Court Trust Fund. Under the proposal, certain court filing fees would be established or increased to generate an additional $88 million, which would be remitted to the Trial Court Trust Fund. Figure 33 (see page 146) shows the proposed increases and new fees, along with the Judicial Council's estimate of the additional revenues which would be generated by these changes.

Redefinition of Operating Costs. The proposal eliminates the costs of facilities, local judicial benefits beyond the state-funded salary and benefits, and revenue collection activities from the trial court operational budget. These items would be fully funded by the counties.

Other Proposed Statutory Changes. In addition, the Governor's proposal contains the following changes as part of the consolidation plan:

Figure 33
Trial Court Funding

Proposed Court Fee Changes

  • Increase civil filing fees from $182 to $185 in superior court cases and from $80 to $90 in municipal court cases (annual revenue: $6.7 million).
  • Increase filing fee for any notice of motion, or other paper requiring a hearing, or opposition to a motion or paper requiring a hearing, from $14 to $23 (annual revenue: $7.2 million).
  • Establish new fees for filing an amended complaint or cross-complaint, or amendment to a complaint or cross-complaint, of $75 in superior court and $45 in municipal court (annual revenue: $11.1 million).
  • Increase small claims filing fees to $20 for the first 12 filings per year and $35 for any additional filings (annual revenue: $2.2 million).
  • Retain jury fee deposits if the proceeding is dismissed or the trial by jury is waived after deposit of the fees (annual revenue: $5 million).
  • Recovery of previously waived filing fees when litigant receives a monetary settlement (annual revenue: $1 million).
  • Increase all miscellaneous clerk fees by 50 percent (annual revenue: $52.6 million).
  • Standardize photocopy fee at $1 per page (annual revenue: $1.5 million).
  • Increase fees for family conciliation court from $15 to $20 (annual revenue: $430,000).
  • Total annual revenue: $88 million.


State Funding Makes Sense, But Cost Controls Needed

As we indicated in last year's Analysis, the administration's consolidation proposal has merit. However, the Legislature will need to consider issues related to future funding and cost containment, which if not addressed, would result in significant future cost increases to the state.

Judicial Functions Should Be Considered "Statewide" Functions. As we indicated last year, we concur with the administration that the state should assume primary financial responsibility for the trial courts. There are several reasons for this. First, the state has an interest in ensuring and improving statewide access to justice through the courts. The current trial court funding system can result in widely differing levels of support for the courts depending on county fiscal capacity and budget priorities.

Second, the current system largely separates control and financial responsibility for the courts, with the state determining court workload while the counties are primarily responsible for funding the costs. The Legislature and the Governor control, to a large extent, the workload and the rules governing the courts and, in some cases, the types and number of court employees. The state also controls the number of judges, which has a substantial impact on the overall costs of the courts.

This is not to say that local government officials do not affect the workload of the courts. Particularly in the area of criminal justice, the police and district attorneys exercise a certain amount of discretion in determining who to arrest and which cases to prosecute. Nevertheless, we believe that on balance, the state is the primary determinate of court workload.

Finally, we concur with the administration that the divided funding responsibility that currently exists for the trial courts limits the authority, and consequently, the accountability of all the parties involved. Any new system for the funding of the trial courts must provide clear accountability and increased flexibility for the management of the courts.

Budget-Year Impacts and Beyond. The net impact of the consolidation on the state General Fund for the budget year is relatively minor. However, because county costs would be capped, all additional future costs would be borne by the state. Thus, we expect state expenditures will grow in the following years, especially if the Legislature establishes new judgeships or new court-related programs. For example, the budget requests $4 million from the General Fund to establish 40 new judgeships in the last quarter of 1997-98. An additional $12 million, all borne by the state, would be required for 1998-99 to provide full-year funding for these proposed judgeships. Similarly, the budget requests $14 million from the General Fund to fund a number of jury reforms for the second half of 1997-98. Full year costs for these reforms in 1998-99 would be $28 million.

Based on historical experience, we estimate that the trial court operational budget could increase by $30 million to $80 million annually. This amount could increase if the Legislature authorizes additional new judgeships or new programs. The state would be solely responsible for funding this increase. In the budget year, the state's General Fund share of the proposed increase in funding is supplemented by a proposal to increase court fees. While this option will continue to exist in the future, it is likely that future funding increases will need to be provided primarily from the General Fund.

Proposal Creates Challenges, Opportunities. Although we believe that the proposal is an important step in creating a statewide, unified judicial system, we have identified several concerns with the current consolidation proposal which the administration and the Legislature should address.

The proposal will likely result in significant cost increases to the state in future years. Thus, it will be important for the state to ensure that the issues of governance and control make sense in the new system, enabling the state to have greater involvement and control over trial court expenditures. We recommend that the Legislature ensure that the mechanisms for improved governance are in place to bring about operational efficiencies and control trial court expenditures. This becomes especially important if the Legislature wishes to create new trial court judgeships or new court-related programs in the coming years, which could increase trial court operating costs substantially.

For example, last year, we outlined several issues with regard to governance of trial court employees. We noted that the proposal did not link the management and the funding of court personnel. The absence of such a link would allow the counties to continue to set salary and benefit levels for court employees, but would make the state responsible for funding 100 percent of any increase in personnel costs. Last year, we recommended that the Legislature ensure linkages between control and financial responsibility for trial court employees. The Governor's proposal establishes a task force on court employees charged with reviewing and making recommendations with regard to a system of governance for trial court employees by June 1, 1999. We believe that this approach is an appropriate first step with regard to that issue. We outline several additional issues related to cost control below.

Budget Issues

Judicial Council Needs to Further Define Performance Measures

We recommend that the Legislature adopt supplemental report language directing the Judicial Council to report on the development and use of performance measures for trial courts. The performance measures should assess progress toward meeting specific organizational goals and permit cross-court comparisons.

In linking fiscal responsibility and accountability, it will be important for the Legislature to establish performance expectations for the courts. In January 1996, the Judicial Council submitted a report to the Legislature regarding performance criteria for the trial courts. The reported noted that the development of output based performance criteria is evolutionary in nature. As initial performance measures, the report cited the use of cross-court comparisons such as average cost ratios that have been developed to assist in the Council's budget review process. Specifically, each court's expenditures are compared to these statewide average costs for similar sized courts, and budget requests that deviate significantly are reduced with a request for further justification. In addition the report notes that minimum standards for certain court functions such as jury administration and court security have been developed.

Benchmarks Don't Measure Achievement of Goals. The purpose of performance measures is to measure progress toward meeting specific organizational goals. The purpose of the average cost ratios is to provide "benchmarks" for courts to self-assess their performance.

Our review indicates, however, that these benchmarks do not constitute performance measures because they can not be used to assess movement toward clearly defined goals. While cross-court comparisons can be helpful, it is important that the Judicial Council implement performance measures that are oriented to measure outputs, efficiency, and effectiveness. One example would be for the Judicial Council to implement standards for the tracking processing, and resolution of criminal caseloads, similar to those implemented for civil caseloads as a result of the 1990 Trial Court Delay Reduction Act. Such standards would result in measures of outputs which would be relevant to the Judicial Council goals for ensuring access to justice, and providing expedited and timely justice. We note that several courts, including those in San Diego and Los Angeles, have had success in significantly reducing criminal backlogs as a result of implementation of such measures locally.

Analyst's Recommendation. We believe that the use of the average cost comparisons to assist in budget development was a good first step by the Judicial Council. However, in the long run, we do not believe that the use of average cost comparisons is adequate for developing future trial court budgets or assessing progress of courts in meeting the goals specified by the Judicial Council and the Legislature. Accordingly, we recommend that Legislature direct the Judicial Council to report to the Legislature on its progress in defining and implementing performance measures that assess specific output, efficiency, and effectiveness in ways that can be verified quantitatively, and will allow for cross-court comparisons.

Specifically, we recommend the following supplemental report language:

It is the intent of the Legislature that the Judicial Council report to the Joint Legislative Budget Committee and the Legislature's fiscal committees, by January 1, 1998, on the development and implementation of trial court performance measures that assess specific outputs, can be quantitatively measured, and provide cross-court comparisons of specific organizational output, including trial court efficiency efforts.

Budgeting Practices Overstate Trial Court Costs

The Judicial Council's current budgeting practices overstate the budget for the trial courts. We recommend adoption of supplemental report language directing the Judicial Council to implement a new method for budgeting personnel services in the trial courts and to revise baseline restoration practices.

Approved Budgets Differ Significantly From Actual Expenditures. The budgets approved by the Judicial Council for the trial courts have been significantly higher than the actual expenditures of the courts. As Figure 34 shows, the council-approved budgets have been about 12 percent higher than actual expenditures for the courts. Some of this difference can be attributed to the inability of the counties to fund their share of the budgets of the courts at the levels approved by the council. However, some of the difference can be attributed to the budgeting practices of the Judicial Council. As the state contemplates taking over primary responsibility for the funding of the courts, it will be important that the Legislature ensures that the budgets approved by the Judicial Council more accurately reflect the actual expenditures for the courts.
Figure 34
Trial Court Funding

Operations Budget

1994-95 Through 1996-97

(Dollars in Thousands)
Trial Court Budget Percent

Differences

Judicial Council Approved Actual Expenditures
1994-95a $1,673 $1,497 11.8%
1995-96a 1,726 1,531 12.7
1996-97b 1,727 1,551 11.3
aActual.
bEstimated.


Salaries for Trial Courts Overbudgeted. Currently, when the Judicial Council develops the trial court budgets for salaries and wages it does so by budgeting all vacant and filled positions at the top step. This is inconsistent with standard budget practices at the state level, and overstates the amount needed for salaries and wages for the trial courts. This is because not all authorized positions are filled at any one time. Additionally, when filling a vacant position, it is typically done at the entry level. At this time we do not have an estimate of the extent to which the personnel services for the courts are overbudgeted. However, given that the trial courts employ thousands of non-judicial personnel, and that funding for employees is the single largest expense in the trial courts, the amount is probably significant.

"Baseline Restoration Process" Overstates Budgets of the Trial Courts. In 1995, the Judicial Council instituted a "baseline restoration process" in the development of budgets for the trial courts. This process allows the approved baseline budget for each functional expenditure category (such as jury services and court security) of the court to be the higher of (1) the actual prior year expenditures or (2) the previous year's baseline budget that had been approved by the council.

As a consequence of the Council's practice, the baseline budgets for each court continue to be higher than actual expenditures. Specifically, the budget approved by the Judicial Council has always been higher than actual expenditures, because the counties have never funded the courts to the level assumed in the state budget.

Analyst's Recommendation. In order to more accurately budget court costs, we recommend that the Legislature direct the Judicial Council to revise its current budgeting practices. Specifically, we recommend that the Legislature adopt the following supplemental report language:

It is the intent of the Legislature that the Judicial Council shall implement a new method for budgeting personnel services. The council shall budget personnel services costs based on the actual salary levels of court employees, that accounts for salary savings, and that budgets all new positions at the bottom step. In addition, the Judicial Council shall eliminate the current baseline restoration process. The council shall advise the Joint Legislative Budget Committee and the Legislature's fiscal committees by November 1, 1997, on how it has incorporated the new methods into the budgeting process for the trial courts.

Distribution of Trial Court Funding Should Be Based on Incentives

The budget does not contain a formula for allocating funds to the trial courts. We recommend adoption of budget bill language directing the Judicial Council to implement an allocation formula which includes incentives for trial courts to implement efficiencies and cost containment measures.

Fund's appropriated by the budget act are distributed by the Judicial Council. The Governor's budget, however, does not contain a distribution formula. Thus, it is uncertain how the funds will be distributed to the various trial courts. In the past, the Judicial Council has distributed funds to the courts based roughly on the same percentage that they received in the prior year. In determining the amount of funds to be allocated to individual courts, the Judicial Council does not account for issues of critical need, operational efficiency, or incentives for cost containment.

Budget Act Directed Judicial Council to Implement Allocation Criteria. The 1996-97 Budget Act directed the Judicial Council to allocate funds under the program using criteria that included incentives for courts to implement efficiency measures. Due to the failure of AB 2553 and the funding shortfall in the current year, the Judicial Council used its historical allocation formula for distributing state funds to the courts rather than developing new criteria using incentives, as directed by the Legislature.

Incentives Needed to Ensure Efficiency and Cost Containment. As we indicated earlier, a wide disparity exists among individual courts with regard to implementation of efficiency and cost containment measures. In our view, the best way to achieve implementation of efficiencies is to establish a system of incentives to reward courts that implement efficiencies, and create disincentives for trial courts that have not adopted efficiencies. Such a system of incentives could be implemented by the TCBC and the Judicial Council through the allocation of funds to the courts. For example, the Council could allocate funds based on performance criteria. In addition, it could provide new funds for projects which it believes would enhance court efficiency, for example, automated accounting and case tracking systems. Conversely, the Legislature could direct the Judicial Council to withhold expenditures for the Assigned Judges Program in courts that do not coordinate judicial calendars or cross-assign judges, or not increase jury administrative allocations for trial courts that do not have coordinated jury selection procedures.

In our view, using an incentive system to implement efficiency measures and control costs will become even more important in future years when, if the Governor's consolidation proposal is adopted, the state's costs for support of trial courts will increase substantially.

Analyst's Recommendation. In order to assure that efficiencies and cost containment measures are fully implemented by the trial courts, we recommend that the Legislature amend the proposed language in the 1997-98 Budget Bill (Item 0450-101-0932--Provision 3) by adding:

The Judicial Council shall implement an allocation criteria that includes incentives for courts to implement court efficiency measures and control costs. The council shall advise the Legislature by October 1, 1997, on how it has incorporated the incentives into its allocation criteria.

New Programs Proposals And Augmentations

New Judgeships Not Justified

We recommend a General Fund reduction of $4 million proposed for 40 new judgeships because the positions have not been justified on a workload basis. However, if the Legislature decides to establish new judgeships in separate legislation, we recommend that it limit the judgeships only to those courts that have fully coordinated or consolidated their operations. (Reduce Item 0450-101-0932 by $4 million.)

The budget proposes $4 million to support 40 new trial court judgeships beginning in the last quarter of 1997-98. The requested amount would pay for the salaries and benefits of new judgeships, as well as the related support staff and operating expenses and equipment. Annual costs for the following years will be about $16 million. Separate legislation is required to establish the judgeships.

In June 1995, the Judicial Council released a report on the judgeship needs of the trial courts and recommended that 61 new judgeship positions be established. The report ranked the 61 judgeships positions by court, based on the severity of need. In response, the Legislature approved funding of $2 million for 21 new judgeships starting the last quarter of 1996-97. (The budget requests $8 million to pay the full-year cost for these new judgeships in 1997-98.) The Judicial Council indicates that a similar evaluation process was performed and has proposed $4 million for 40 new judgeships to be authorized for the last quarter of 1997-98. Figure 35 shows the courts in which the 40 new judgeships would be established.

As the figure shows, the 40 new judgeships would be distributed across 16 counties, with several judgeships established for some of the larger counties. Specifically, the proposal requests multiple judgeships in the following counties: seven judgeships in Los Angeles; five each in Orange, San Bernardino, and San Diego; four in Sacramento; three in Riverside; and two each in Alameda and Fresno.

We have the following concerns with the Council's proposal.

Simulation Model Delayed Again. Originally, the Judicial Council intended to develop a simulation model based on quantitative data from the individual courts in order to determine which courts were in need of new judgeships. The project began in 1989 and was intended to develop a computer simulation model to assess the judgeship needs for all the courts. Implementation of the model has been substantially delayed, and we understand that the Judicial Council recently granted a two year extension for the development of the project, until November 1998.

Last year, the Judicial Council indicated that due to data limitations it had decided not to use the simulation model in proposing 21 new judgeships, and instead based its recommendations on "qualitative reports" submitted by the courts and statistical information reported to the council. The primary sources of information that were used included: (1) five-year case filing trend reports, (2) the number of existing judicial positions, (3) the extent of judicial coordination among courts in the county, and (4) the extent of temporary judicial positions in the court.

The Judicial Council indicated that the approach used last year was only intended to be an interim measure intended to identify the most critical needs among the trial courts. Last year, when the Legislature was considering the request for 21 new judgeships, the Judicial Council advised that significant progress was being made on the simulation model and that it anticipated implementation of the model soon. This year, however, the Judicial Council used its interim approach again and is now proposing 40 new positions.
Figure 35
Trial Court Funding

Proposed New Judgeships

Priority Court
1 East Kern Municipal
2 South Orange Municipal
3 Butte Consolidated
4 San Bernardino Consolidated
5 North County Municipal (San Diego County)
6 San Joaquin Superior
7 Sacramento Consolidated
8 San Diego Superior
9 San Bernardino Consolidated
10 Sonoma Consolidated
11 Orange Superior
12 Alameda Superior
13 San Diego Superior
14 Sacramento Consolidated
15 Contra Costa Superior
16 Fresno Consolidated
17 Riverside Consolidated
18 San Bernardino Consolidated
19 Orange Superior
20 San Diego Superior
21 Ventura Consolidated
22 Los Angeles Superior
23 Sacramento Consolidated
24 Riverside Consolidated
25 Los Angeles Superior
26 San Bernardino Consolidated
27 Los Angeles Superior
28 Alameda Superior
29 San Francisco Superior
30 Orange Superior
31 San Diego Superior
32 Fresno Consolidated
33 Los Angeles Superior
34 Los Angeles Superior
35 Los Angeles Superior
36 Sacramento Consolidated
37 Riverside Consolidated
38 San Bernardino Consolidated
39 Los Angeles Superior
40 Orange Superior


Given that the Legislature has funded the simulation model for eight years in order to assess judgeship needs, we recommend that no new judgeships be authorized prior to completion and implementation of the model. We believe that the simulation model approach has merit, and that the Judicial Council has had ample time to implement it.

Proposal Not Adequately Tied to Coordination. Current law requires trial courts to implement various efficiency procedures in order to maximize the use of judicial resources. These procedures include cross-assignment of judges between municipal and superior courts in order to hear any type of case, use of subordinate judicial officers (such as, commissions) to hear matters, and merging court support staff within a county. Our review indicates that many of the proposed judgeships are for courts that have not coordinated or consolidated their operations to the fullest possible extent, and in some instances the courts have made almost no efforts to coordinate. If they had done so, their need for additional judgeships would probably diminish. We further note that the Judicial Council does not have current information on the status of implementation of coordination plans in all of the courts, and will be completing a review of courts in July 1997. We recommend that no new judgeships be authorized pending the results of the review, and that if new judgeships are authorized that they are only for courts that have coordinated their staffs and activities to the greatest extent possible.

Proposal Does Not Consider Transferring Judgeships From Other Courts. Finally, we believe that the proposal does not account for judgeships in courts throughout the state that may not have sufficient workload to justify their current number. We believe that it is be possible, whenever positions become vacant, to permanently transfer positions from courts with insufficient workload to those where the needs are greatest, thus increasing the efficiency and reducing the costs of the trial court system. We believe that the simulation model will facilitate identifying those courts that do not have sufficient workload to justify their current number of judicial positions.

Analyst's Recommendation. Based on the above, we believe that the request for $4 million and 40 additional judgeships should not be approved at this time. We recommend that the Legislature direct the Judicial Council to complete the judgeship needs computer simulation model and consider transferring judgeships in courts where workload does not support the current number of positions whenever the positions become vacant.

Should the Legislature decide that it wishes to establish some number of additional judgeships in separate legislation, however, we recommend that position's not be established in courts that have not fully consolidated or coordinated their operations.

Assigned Judge Program Augmentation Not Justified

We recommend a General Fund reduction of $1.2 million requested for the assigned judges program because the request is not justified on a workload basis. (Reduce Item 0450-101-0932 by $1.2 million).

The budget requests an additional $1.2 million for anticipated growth in the number of municipal court judges accepting assignments to hear cases in superior courts in the budget year. A municipal court judge who serves on assignment in a superior court is eligible to be paid the difference between the superior court salary and the judge's municipal court salary, or approximately an additional $26 per day. This differential is charged to the Assigned Judges Program budget.

The Judicial Council notes that the total pay differential cost has been increasing from $750,000 in 1995-96 to an estimated $1.1 million in the current year. As a consequence of further coordination efforts and anticipated increases in cross-assignment of judges, the Judicial Council is requesting an additional $1.2 million, or an increase of 107 percent in the budget year.

Budget for Assigned Judge Program Recently Increased. The 1996-97 Budget Act increased funding for the Assigned Judge Program by $6.2 million, or 51 percent. Of this amount, $3.5 million was intended to fund "Three Strikes Relief Teams" to assist courts with increased workload as a result of second- and third-strike cases. The remainder of the increase ($2.7 million) was intended to fund growth in the number of assigned judges, and cross-assigned judges expected as a result of increased coordination.

Increased Workload Not Justified. As indicated, the proposal would increase differential cost funding by 107 percent. Our analysis indicates that the Judicial Council has not justified this level of augmentation. We recognize that some level of increase may be necessary for the program, but we do not believe that the Council has justified the proposed increase, especially given the increases approved in the current year. In fact, with the proposed increase, the program could fund every municipal court judge in the state to handle superior court matters for nearly three days of every week. Thus, we recommend reduction of $1.2 million for the Assigned Judge Program.

Concerns With Statewide Jury System Improvements Request

We recommend that the Legislature not adopt the budget proposals related to jury compensation and reimbursement, but instead authorize a series of compensation and reimbursement pilot projects in the jury reform legislation that the Legislature will consider.

Background. In May 1996, the Judicial Council released the final report of the Blue Ribbon Commission on Jury System Improvement. The commission's report concludes that the jury system is in crisis, and that the crisis manifests itself in public dissatisfaction with the current structure and operation of the jury system. The Judicial Council further notes that jury participation across the state is low, and that courts must cope with jury service apathy and declining interest and desire to serve by the public.

The report outlines more than 50 recommendations for improving the jury system covering a wide range of topics, including jury management and selection, and the jury's deliberative function. Specific fiscal recommendations in the report include increasing juror fees from the current $5 per day to $40 per day, implementing a system of tax credits to employers who pay jurors their regular salaries during service, fully reimbursing juror mileage and parking, and reimbursing jurors for costs of care of their dependents.

Senate Bill 14 (Calderon) contains many of the recommendations from the Blue Ribbon Commission's report, including the fiscal recommendations.

Budget Request. The budget requests $14 million from the General Fund to provide half-year funding for the following increased reimbursements for jury service: (1) increase in juror mileage reimbursement rate ($500,000), (2) reimburse juror parking ($3.5 million), (3) reimburse juror child and dependent care expenses ($3 million), and (4) reimburse juror meal expenses ($7 million). The full-year cost of the proposals in 1998-99 would be $28 million.

Budget Proposal Differs From Blue Ribbon Commission Report. The budget request differs from the Blue Ribbon report in its request for reimbursement of juror mileage and juror meals. The Blue Ribbon report recommends increasing juror mileage reimbursement to 28 cents per mile for travel to and from the court. The budget requests 28 cents per mile for trips over 50 miles one way. The Judicial Council anticipates that 50-mile one-way trips will occur in primarily rural areas. We note that the 28 cent per mile figure was chosen because the judicial branch reimburses its employees at 27 cents per mile. (In our analysis of the judicial budget later in this chapter, we recommend that this rate be lowered to 24 cents per mile to match the Board of Control's maximum mileage reimbursement for state employees.)

The budget also requests $7 million to reimburse jurors for meal expenses. This amount is based on the Board of Control approved per diem allowance for lunch. We note that there is no recommendation in the commissions report regarding reimbursement for juror meal expenses. The Judicial Council has indicated that this budget proposal was developed as an alternative to increasing juror compensation to $40 per day of service.

Budget Proposal Is Flawed. We concur with the commission's conclusion that changes are needed in the state's jury system in order to reduce dissatisfaction and ensure public confidence. In addition, we acknowledge that some changes will likely cost money. We believe, however, that the approach taken by the Judicial Council in its budget proposal is flawed in a number of respects.

First, we note that there are many different options for meeting the goals set out by the commission and that these options should be considered in comprehensive manner, not in a piecemeal fashion. The Legislature should consider the entire package of jury reforms instead of appropriating funds to implement a few specific reforms. We note that there are many different options for providing juror compensation. For example, the Legislature could decide to increase compensation to jurors across the board, which would eliminate the need to reimburse the costs of meals or reduce the need to reimburse dependent care expenses.

Second, the budget proposal assumes enactment of the commission's recommendation that the state move to a "one-day, one-trial" system in which persons called for jury service would report to court for one day and, unless empaneled that day, would be dismissed. The commission recommended that persons dismissed after only one day not be compensated. We believe that such a proposal has merit, however, currently, most courts do not operate such a system, and would probably face significant difficulties in establishing such a system in the short-run. To the extent that the courts could not implement such a system, or the Legislature adopted a different assumption, the amount of money needed for reimbursements could be significantly greater than what is proposed.

Third, we believe that the fiscal and administrative implications of some elements of the request have not been adequately considered. For example, the amount proposed to reimburse jurors statewide for dependent care expenses ($6 million annually when fully implemented) has not been adequately justified, and could be higher. In addition, it is likely that individual courts will have administrative difficulties establishing programs to reimburse jurors for such expenses. For example, courts may have difficulties verifying whether jurors actually incur dependant care expenses.

Finally, the proposals have no evaluative components. We believe that it is essential to evaluate whether any fiscal reforms of the jury system meet the ultimate goals: to increase public satisfaction, reduce jury service apathy, and increase the ability of courts to seat juries.

Analyst's Recommendation. For these reasons we recommend that the Legislature not approve the budget proposals. Instead, we recommend that any legislation to implement some or all of the commission's recommendations authorize a series of pilot projects to test various reforms. Specifically, we suggest that pilot projects be established in counties of various size (urban, suburban, rural) using different jury compensation and reimbursement schemes. For example, pilot projects could be established in which jurors are compensated at various amounts (say, $30 to $50 per day), provided full or partial reimbursement for child care expenses, and provided full, round-trip mileage reimbursement. The proposals included in the Governor's budget could be tested as one possible approach. In addition, because we believe that the "one-day, one-trial" concept makes sense, we suggest that pilot projects only established in those courts that first develop a "one-day, one-trial" system.

Each of the pilot projects should be evaluated over a period of at least one year, and the results could provide the Legislature with information on which approaches best meet the goals, as well as provide better information on the full costs and potential benefits associated with each reform. The Legislature could then use this information to make statewide changes in follow-up legislation.

Finally, should the Legislature decide to increase the mileage reimbursement rate paid to jurors, we recommend that the rate be set at 24 cents per mile rather than the requested 28 cents per mile to conform to the Board of Control travel reimbursement rates paid to state employees.


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