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Analysis of the 2007-08 Budget Bill: Judicial and Criminal Justice

Adult Corrections

Who Is in Prison?

There were 172,508 inmates in the prison population as of June 30, 2006. About 93 percent of the population is male. Other demographics of the inmate population include the following:

• About 50 percent of inmates are incarcerated for nonviolent offenses.

• About 62 percent of all inmates were committed to prison from Southern California, with about 33 percent from Los Angeles County alone and 8 percent from San Diego County. The San Francisco Bay Area is the source of about 12 percent of prison commitments.

• About 46 percent of all inmates are between 20 and 34 years of age, with the number of inmates falling dramatically starting at age 50.

• The prison population is divided relatively evenly among whites, blacks, and Hispanics.

• About 63 percent of the inmates are new admissions from the courts, 25 percent are offenders returned by the courts for a new offense while on parole status, and 12 percent are parolees returned to prison by administrative actions for violation of their conditions of parole (see Figure 1).

Inmate and Parole Population Management Issues

Inmate Population Projected to Increase

The California Department of Corrections and Rehabilitation (CDCR) is projecting the inmate and parolee populations to increase in the current and budget years, though more slowly than what was assumed in the 2006-07 Budget Act.

Inmate Population Increase. As of June 30, 2006, CDCR housed 172,508 inmates in prisons, fire and conservation camps, and community correctional facilities. The CDCR forecasts the inmate population will increase to 179,558 by June 30, 2008, a projected two-year increase of 7,050 inmates, or about 4 percent, compared to the beginning of the current fiscal year. The projected increase in the inmate population is the result of a recent trend of increasing admissions to prison from county courts, as well as more parole violators returned to prison through the state’s administrative returns process. Figure 2 shows the year-end inmate and parole populations for the period 1997 through 2008.

Parole Population Increase. As of June 30, 2006, CDCR supervised 116,563 persons on parole. As shown in Figure 2, CDCR projects the parolee population to increase to 123,336 by the end of the budget year, an increase of 6,773, or 6 percent. This increase is primarily a result of the increase in the number of inmates released to parole after serving their prison sentence.

Fiscal Implications of Population Changes. The CDCR is requesting additional funds of about $7 million in the current year, growing to $79 million in the budget year. This reflects the additional costs for out-of-state beds, partially offset by savings from slower population growth than assumed in the 2006-07 Budget Act.

Housing the Projected Growth in Inmate Population. The Governor’s budget proposes an inmate housing plan to accommodate the additional inmates that CDCR expects to receive by the end of the budget year. The plan has the following major elements:

• Out-of-State Beds. The department’s housing plan includes the establishment of 2,260 beds contracted with facilities in other states. State inmates began filling those beds in late 2006. As of January 31, 2007, CDCR had transferred about 350 inmates to out-of-state facilities.

• Overcrowding of Existing Prison Space. The housing plan assumes that, by the end of the budget year, an additional 4,060 inmates would be placed in gymnasiums, dayrooms, and dorms in CDCR prisons. This is intended to be temporary housing.

• Loss of Pitchess Contracted Beds. In 2006, Los Angeles County chose to end its contract to house 1,300 state parole violators in its Pitchess Detention Center effective February 2007. Offsetting this decrease in capacity, CDCR proposes to increase contracted capacity at other facilities in California by 1,580 beds.

Potential Risks to Accuracy of Projections. As we have indicated in past years, the accuracy of the department’s latest projections remains dependent upon a number of factors, changes to any of which could result in significantly higher or lower populations. These factors include sentencing law, crime rates, and local criminal justice practices. For example, these projections do not take into account a recent U.S. Supreme Court decision in Cunningham v. California ordering the state to change its procedures under which courts can increase the length of sentences for crimes involving aggravating circumstances. At this time, it is unclear how this ruling will affect prison terms for current and future inmates. This is because the Supreme Court sent the case back to a lower court to determine how to implement the decision.

Caseload Will Likely Require Further Adjustment

We withhold recommendation on the 2007-08 budget request for caseload funding pending receipt of the May Revision because recent data indicate that the population is trending lower than the department’s projections. We recommend that the administration provide, as part of its updated spring population projections, an estimate of the impact of the Governor’s policy proposals on the inmate population. We will continue to monitor the caseload and recommend further changes, if necessary, following review of the May Revision.

Inmate Population Relatively Level. The fall 2006 projections anticipated that the inmate population would grow by about 500 inmates during the first half of 2006-07. Instead, the inmate population stayed relatively level over the past six months. However, the parole population was about 2,400 higher at the midpoint of 2006-07 than what the fall projections anticipated. The CDCR will issue updated population projections in spring 2006 that form the basis of its May Revision proposal. At that time, we will review whether adjustments to CDCR’s funding for inmate and parole caseloads are warranted.

Budget Does Not Reflect Population Impact of Governor’s Policy Proposals. The department’s budget includes budget-year policy changes to reduce the parole population. (See our discussion of the Governor’s prison capacity proposals later in this chapter.) Should the Legislature choose to enact these changes, there would likely be a reduction in the prison population compared to what would occur in the absence of these policy changes. That is because the discharge of offenders from parole would also eliminate the possibility of administrative return to prison for parole violations. The Governor’s budget does not include any estimate of the likely impact of the proposed changes on the prison population and the associated fiscal effects.

Similarly, the budget plan does not reflect the Governor’s budget proposal (discussed in more detail in our analysis of the “Department of Alcohol and Drug Programs” in the Health and Social Services chapter) to reduce funding for Proposition 36 allocations to counties. Because Proposition 36, an initiative approved by voters in 2000, provides for offenders to receive drug treatment in lieu of their incarceration in prison or jail, the proposed reduction in spending for this program could begin to increase the prison population during the budget year.

We recommend that the department provide estimates of the impacts of the Governor’s policy changes for adult parole and for reductions in Proposition 36 funding as part of the May Revision process.

Analyst’s Recommendation. We withhold recommendation on the 2007-08 caseload funding request, though we recommend that the department adjust its request to reflect the likely impact of population adjustments proposed in the Governor’s budget. We will continue to monitor CDCR population, and make recommendations as appropriate at the time of the May Revision.

Governor’s Prison Overcrowding Package Is More Balanced But Too Big

The Governor requests $9.6 billion (combined General Fund and lease-revenue bonds) for a 14-part package of proposals designed primarily to address overcrowding in state prisons and county jails. While the package offered by the administration has merit, we have a number of concerns, in particular that the package would result in a large surplus of state prison capacity and provide the wrong mix of beds. We recommend that the Legislature consider an alternative package that would also address overcrowding but result in a more limited surplus of prison beds and reduce capital outlay costs relative to the Governor’s proposal by $2.1 billion. (Reduce Item 5225-001-0001 by $146 million and Item 5225-002-0001 by $23 million.)

Background

Inmates Housed by Security Levels

When inmates are sent to state prison, they are assessed during the intake process at reception centers. One of the assessments done is to determine the appropriate security level at which they can be housed, based primarily on the likelihood that they will attempt to escape, commit violence, or otherwise break prison rules while incarcerated. Based on factors such as length of prison sentence, criminal history, and behavior during prior time in prison, inmates are assigned a classification level ranging from Level I (minimum security) to Level IV (maximum security). After receiving their security classification and undergoing other assessments at the reception center, inmates are generally transferred to other prisons matching their security classification. Female offenders are all assigned to the same prisons regardless of security classification.

Current Prison Overcrowding

Ten Percent of Inmates Housed in Gyms and Dayrooms. As of December 31, 2006, the California Department of Corrections and Rehabilitation (CDCR) was estimated to have 173,100 inmates in the state prison system, based on CDCR’s fall 2006 population projections. However, as shown in Figure 3, the department only operates or contracts for a total of 156,500 permanent bed capacity (not including out-of-state beds, discussed in more detail later), resulting in a shortfall of about 16,600 prison beds relative to the inmate population. The most significant bed shortfalls are for Level I, II, and IV inmates, as well as at reception centers. As a result of the bed deficits, CDCR houses about 10 percent of the inmate population in temporary beds, such as in dayrooms and gyms. In addition, many inmates are housed in facilities designed for different security levels. For example, there are currently about 6,000 high security (Level IV) inmates housed in beds designed for Level III inmates.

 

What Do Prison Experts Mean by “Overcrowding?” Discussions about overcrowding in California prisons are frequently complicated by the use of various similar sounding terms. We define a few of these terms below and describe how we use them in our analysis of the Governor’s proposals to address overcrowding. Design Capacity. Design capacity refers to the number of beds the department would operate if it housed only one inmate per cell and did not double-bunk in dormitories. The department identifies its design capacity as about 83,600 in state prisons (not including 7,500 community contracted bed capacity). Double-ceiling and double-bunking of inmates in cells and dormitories is standard practice—with some exceptions—in prisons nationally. For this reason, we do not rely on design capacity figures in our analysis of the department’s bed capacity. Permanent Capacity. “Permanent capacity” refers to the number of beds the California Department of Corrections and Rehabilitation (CDCR) would have if it used double-celling and double-bunking in all facilities when it was reasonably able to do so given the dangerousness of the inmates housed in those facilities and the size of the cells. As shown in Figure 3, the department reports that its permanent capacity is about 156,500 beds. Temporary Housing. Because the department does not have permanent capacity for all inmates, CDCR utilizes “temporary housing.” This typically involves housing inmates in space not originally designed for housing, such as gyms and dayrooms. As shown in the figure, the department currently houses about 16,600 inmates in temporary beds. The CDCR reports that it will exhaust its supply of temporary beds by spring 2008. Overcrowding. For purposes of this analysis, overcrowding refers to the use of temporary housing due to having more inmates than permanent capacity available.

Consequences of Overcrowding. Based on our discussions with department administrators, significant overcrowding has both operational and fiscal consequences. Overcrowding and the use of temporary beds create security concerns, particularly for medium- and high-security inmates. Gyms and dayrooms are not designed to provide security coverage as well as in permanent housing units, and overcrowding can contribute to inmate unrest, disturbances, and assaults. This can result in additional state costs for medical treatment, workers’ compensation, and staff overtime. In addition, overcrowding can limit the ability of prisons to provide rehabilitative, health care, and other types of programs because prisons were not designed with sufficient space to provide these services to the increased population. The difficulty in providing inmate programs and services is exacerbated by the use of program space to house inmates. Also, to the extent that inmate unrest is caused by overcrowding, rehabilitation programs and other services can be disrupted by the resulting lockdowns.

Inmate Population Projected to Grow, Exacerbating Overcrowded Conditions

Historical Inmate Population Growth. Over the past 20 years, the state inmate population has grown at an average annual rate of 5 percent, increasing from 59,000 inmates in 1986 to 173,000 inmates in 2006. As shown in Figure 4, the overall increase in the inmate population over the past 20 years includes more rapid growth between 1986 and 1998 (9 percent average annual growth), a period of no net growth between 1998 and 2002, and a period of moderate growth between 2002 and 2006 (2 percent average annual growth).

What Factors Have Driven the Growth in the Inmate Population? Several factors have contributed to the overall change in the inmate population over the past 20 years. These factors include growth in California’s adult population of an average of 2 percent annually over the past 20 years. In addition, the proportion of the total California population incarcerated in state prison increased over the past 20 years from 220 state inmates for every 100,000 Californians in 1986 to about 460 state inmates out of every 100,000 Californians in 2006. This increase in the incarceration rate coincided with a 41 percent decline in the state’s crime rate but was driven mainly by changes in sentencing laws that increased penalties for many offenses, as well as an increase in the number of parole violators returned to prison via the administrative parole revocation process.

How Much Will the Inmate Population Grow in the Future? As shown in Figure 4, CDCR projects the state prison population to grow to about 190,000 by June 30, 2012, about 17,000 more inmates than the current population. This represents projected average annual growth of about 2 percent annually, consistent with the level of growth that has actually occurred over the past four years, although a significantly lower rate than the trend over the past 20 years.

It is also important to consider what level of inmate population growth may occur beyond CDCR’s five-year projection period, particularly because it can take several years of planning to construct new prison capacity. The failure of the state to anticipate and respond to the amount of inmate population growth in the past (either by adding capacity or taking actions to reduce the inmate population) is a key factor contributing to the current levels of overcrowding. Figure 4 shows how the inmate population would grow under three alternative scenarios during the ten-year period from 2012 to 2022—after the end of CDCR’s projections. These three scenarios assume average annual growth rates of (1) 0.5 percent—a conservative estimate based on the projected rate of growth of the California population of men ages 18 through 44, (2) 2 percent—a moderate rate of growth mirroring recent inmate population growth, and (3) 5 percent—a more rapid rate of growth consistent with the actual population growth experienced during the past 20 years. These scenarios calculate a range of possible inmate populations by 2022 of between 200,000 and 309,000 inmates.

Which scenario (if any) will actually play out is difficult to predict. Long range forecasts such as these are particularly subject to error. The actual prison population growth will be affected by a number of factors, including demographics, changes to sentencing laws, crime rates, law enforcement and judicial practices, and the performance of the economy. It will be important for the Legislature to monitor inmate population change on an ongoing basis and take steps to minimize dangerous overcrowding conditions.

Prison Capacity Nearly Exhausted. As discussed above, the department is currently operating with a significant level of overcrowding. The CDCR reports that it expects to exhaust both its permanent and temporary capacity by spring 2008 based on its most recent population projections. (It is worth noting that the current inmate population is somewhat lower than anticipated in these projections. Should this trend continue, it would take CDCR longer to exhaust its total capacity.) Under the most conservative of the three scenarios discussed above, the state would be short of permanent capacity by 43,000 beds in 2022 (not counting temporary beds). If the state’s prison population were to resume growth at the rate seen during the past 20 years, CDCR’s permanent capacity would be short by almost 153,000 beds. Figure 5 shows the projected bed shortfall under the three scenarios previously discussed.

Administration’s New Package to Address Overcrowding

The administration has presented the Legislature with a 14-part package to address prison as well as county jail overcrowding. In all, the Governor’s package provides $9.6 billion in the 2007-08 budget plan for these purposes.

Four Main Types of Proposals. The Governor has presented the Legislature with a new proposal to address prison and jail overcrowding that differs in some respects from the package he offered during last summer’s special session. The new package has 14 components that fall into four general categories. These are policy changes that would (1) increase state prison bed capacity, (2) reduce the state prison population, (3) provide additional funds for the local government criminal justice system, and (4) implement various other policy proposals related to prison overcrowding.

In all, the budget plan includes $9.6 billion for these proposals. However, at the time this analysis was prepared, the legislation that would be necessary to enact some of the proposals had not yet been introduced in the Legislature. The components of the Governor’s proposals are summarized in Figure 6 and discussed in more detail below.

State Prison Capacity Expansion. The administration proposes $4.9 billion in lease-revenue bond authority and $15 million General Fund in 2007-08 to expand the capacity of the prison system by 28,000 to 30,000 beds (plus an unknown number of medical beds). This includes proposals to build new facilities at existing prisons, reentry facilities, and medical facilities. These proposals also include the use of out-of-state facilities and an expansion of community facilities for female offenders.

State Prison Population Reduction. The Governor proposes to change sentencing law so that certain low-level offenders would be housed in county jails rather than state prisons. The budget also proposes to eliminate provisions of current law which permit the housing of county inmates in state prison for diagnostic purposes, as well as change parole discharge policies to reduce or eliminate the parole terms served by some low-level offenders. In sum, the administration estimates that these policy changes would reduce the prison population by about 25,000 inmates when fully implemented. The administration estimates General Fund savings of $57 million in the budget year, which would grow in 2008-09 and succeeding years.

Additional Funding for Local Criminal Justice System. The Governor proposes $4.4 billion in lease-revenue bonds—requiring $1.1 billion in matching funds from counties—to construct 50,000 beds at the local level. This total includes 45,000 jail beds proposed for adult offenders and 5,000 beds in juvenile halls and camps. In addition, the budget proposes $50 million in the budget year (growing to $100 million in 2008-09) for a new grant program targeted for supervision and treatment programs for adult probationers ages 18 to 25. We discuss the proposed funding for juvenile capacity and the new probation grant program in separate analyses later in this chapter.

Other Changes Related to Prison Capacity and Overcrowding. The budget plan proposes $629 million for other projects, such as $268 million (including $117 million for increased project costs) to complete construction of the new death row facility at the San Quentin state prison (referred to as the Condemned Inmate Complex [CIC]), $303 million to improve infrastructure systems at existing facilities, $58 million to build a new correctional officer training academy in Southern California, and $457,000 to create a sentencing commission.

How Do the Governor’s Proposals Work Overall as a Package?

We find that the Governor’s package of proposals to address overcrowding in the state prison system has merit overall, in that it provides a more balanced approach than the proposal presented to the Legislature in last summer’s special session. However, we have identified several concerns pertaining to how the package fits together as a whole. The Governor’s proposals, if adopted in their entirety, would result in a dramatic surplus of prison beds, provide the wrong mix of beds, increase local jail overcrowding in the short-term, and generate operational costs that have not been fully identified in the plan. As the Legislature reviews the Governor’s package, it should consider not just how many and what types of beds are built, but whether they would be available on a timely basis to relieve overcrowding.

There are sound fiscal and policy reasons to support the Governor’s overall approach to addressing the prison capacity issue, as well as reasons to be concerned about the way his package of proposals fits together as a whole. We discuss our overall assessment of his approach below.

Proposal Has Some Benefits

The administration’s package of proposals has merit, in that it attempts to address the current overcrowding problem as well as the anticipated future growth in the inmate population. In so doing, it could improve prison safety, increase inmate access to rehabilitation programs and health care services, and help lower rates of recidivism. While the package would result in significant additional costs to accommodate additional inmates, it also would likely result in partially offsetting state savings and some avoidance of future increases in costs in prison and parole operations.

In June 2006, the Governor called a special session of the Legislature, proposing $6 billion in capital outlay expenditures to build a total of 44,000 prison beds. The administration’s current set of proposals is a more balanced one than was proposed as part of the special session, in that the current proposals include components which would both increase prison capacity as well as reduce the inmate population. In the past, our office has similarly recommended that the Legislature take such a balanced approach to addressing inmate population growth and overcrowding.

Proposal Would Result in Large Surplus of Prison Beds

While it makes sense to provide some beds beyond those needed immediately, our analysis indicates that the Governor’s package goes much too far in providing for future growth. Specifically, we estimate that adoption of his package of proposals in its entirety—including both components that would increase state capacity and others that would reduce the prison population—would result in a significant surplus of permanent prison capacity. The administration’s package of proposals would increase permanent state prison capacity to about 189,000 and reduce the inmate population to about 157,000, resulting in a total surplus of about 32,000 beds by 2012 when fully implemented. Figure 7 shows this total surplus of beds broken out by security levels. This total surplus equates to roughly six empty prisons that, if present prison population growth trends continued, would probably take between 8 and 11 years beyond 2012 to fill. In our view, it would not be wise to use state resources to build excessive prison capacity which is likely to remain unused for such a long period.

Plan Provides Wrong Mix of Beds

While the Governor’s package of proposals would provide a surplus of beds, it contains, in our view, the wrong mix of beds when the plan is compared with the security level of inmates now held in the prison system as well as the number of inmates projected to be housed at each security level in the future.

Based on our estimates of these factors, as shown in Figure 7, the Governor’s plan would result in a surplus of 25,000 medium-security beds (Levels II and III). To a lesser extent, the proposal results in more reception center, Level I, and female capacity than would be needed.

However, we estimate that the Governor’s plan would also result in a deficit of beds for inmates who require the highest security beds (Level IV). Housing inmates with higher security levels in facilities intended for lower-level inmates without any proposed modifications to the housing units could eventually pose a significant security problem.

Future Operating Costs for Facilities Not Identified

While the 2007-08 budget plan provides for the capital outlay costs associated with the Governor’s prison capacity package, the administration has not provided estimates of the operational costs for several of the proposals. This information gap could make it more difficult for the Legislature to assess the overall approach proposed by the administration for addressing the prison capacity and overcrowding problem.

Additional Prison Facilities. Specifically, the proposals for infill housing, reentry beds, and female community facilities would all result in significant additional state operational costs for activating new facilities, particularly for establishing the initial compliment of custody and administrative staff that have not been identified. The additional state cost to operate these new facilities would probably amount to several hundred million dollars annually.

Moreover, the reentry and female facilities would likely be more costly to operate than typical state prison beds because of the more intense concentration of rehabilitation programs proposed for these facilities. The additional state costs for these additional rehabilitation services would depend on the amount and type of programs provided, but would likely be in the several tens of millions of dollars to the low hundreds of millions of dollars annually once fully implemented.

New Training Academy. Similarly, the department has not identified the operational costs for the proposed Southern California training academy. These are likely to be in the tens of millions of dollars annually, depending primarily on the size of the academy.

Possible Subsidies to Counties for Jail Operations. As discussed later, the administration has indicated that it is considering providing subsidies to counties to help them accommodate more offenders in additional county jail beds financed by the package. However, the administration proposal does not clearly indicate whether and to what extent the state would provide such funding to counties. Conceivably, the cost of such subsidies to counties could amount to hundreds of millions of dollars annually.

Timing of Overcrowding Relief Important for Legislature to Consider

It is important that the Legislature carefully consider proposals that will help to relieve overcrowding in the short term, particularly during the next one to three years, during which time CDCR is likely to exhaust its total capacity. Our analysis finds that the Governor’s package does address the immediate threat of short-term loss of total prison capacity. Specifically, the Governor’s proposals for out-of-state beds, changes in parole discharge policies, and shifting inmates to local jails would significantly reduce inmate overcrowding in the first couple of years even before any significant construction could be completed. This short-term relief to overcrowding is also important because three federal court judges overseeing the provision of health care services to inmates are considering motions by plaintiffs seeking court-ordered remedies to overcrowding. This could include the imposition of a cap on the CDCR prison population.

However, there are some significant timing issues for the Legislature to consider relating to the administration plan. The proposal for sentencing law changes that would have the effect of shifting inmates to local jails is proposed to go into effect in July 2008. Part of the basis for the administration proposal to build additional jail space is to help counties to accommodate the effect of this change in sentencing laws-moving offenders from the state to the local level. However, we believe it is unlikely that a significant amount of new jail capacity could be built by that time. In fact, most of this additional jail capacity could take years longer to construct.

Analyst’s Recommendations: Reduce Overbuilding and Provide the Right Mix of Beds

As the Legislature considers the overall approach to addressing the prison overcrowding problem, we recommend that it consider an alternative strategy that would avoid the creation of an excessive surplus of prison beds and provide a more appropriate mix of beds. We further recommend that the Legislature direct the administration to provide it with estimates of the future operating costs for some of the major components of its plan.

Consider Alternative Approach. Taking into account our concerns about some aspects of the Governor’s prison capacity package, as well as some of its strengths, we recommend that the Legislature consider an alternative package of proposals.

The most significant modifications we recommend to the Governor’s approach are these:

• Approve infill projects, and related infrastructure improvements, only for Level IV and reception center beds.

• Adopt the new parole discharge policies proposed by the administration, but with technical budgetary changes recognizing reduced institution populations.

• Halt the increasingly costly death row project at San Quentin and direct the remaining project funds instead to build high-security capacity elsewhere in the prison system.

• Redirect savings from other recommendations to convert some existing Level III facilities to Level IV.

• Modify the Governor’s proposed sentencing law changes so that offenders who committed a more limited list of low-level crimes would be guilty of a misdemeanor rather than a felony offense likely to result in a jail sentence.

• Appropriate only those capital outlay funds necessary in the budget year to begin building the reentry facilities.

We discuss the rationale for each of these individual alternatives in more detail later in this analysis.

LAO Alternative Has Advantages. Based upon our analysis of the Governor’s proposals, we believe our alternative prison capacity package would reduce the current levels of overcrowding; reduce surplus prison capacity in the Governor’s plan; ensure sufficient capacity in the prison system where it is needed, particularly for Level IV inmates; and reduce state operational and capital outlay costs relative to the Governor’s proposal. Some of its specific advantages are outlined below:

• Smaller Surplus of Beds. We estimate that our proposal would result in permanent prison capacity of about 175,000 beds and an inmate population of 164,000 by 2012. (Inmate populations levels are reduced due to policy and sentencing changes.) This is a net surplus of only about 11,000 beds by 2012, a reduction of about two-thirds compared to the 32,000-bed surplus that would result under the Governor’s plan. The bed surplus in our plan would provide some flexibility to manage the inmate population should it grow faster than projected or if it took longer than expected to site and activate reentry and other facilities. It would be important for the Legislature to monitor the inmate population and capacity on an ongoing basis to prevent severe overcrowding in the long term, particularly in light of our findings that even moderate growth in the inmate population would result in tens of thousands more inmates by 2022. Another benefit of our plan is that room would remain for infill housing should capacity need to be added relatively quickly in the future. Figure 8 illustrates the estimated result of our recommendations on prison bed surpluses and deficits by security level.

• Better Mix of Beds. As Figure 9 shows, our alternative provides a more appropriate mix of beds than the Governor’s package of proposals. It would likely generate a surplus (rather than the deficit provided in the Governor’s plan) of Level IV beds, where overcrowding poses the greatest security risks. Under our approach, there would also be much lower surpluses of medium-security (Level II and III) beds, compared to the Governor’s proposal. Based on our estimates, our plan would result in a deficit—although a much smaller one than currently exists—of Level I beds. However, these low-security offenders could be housed safely in the surplus capacity of Level II or III beds.

Figure 9 Comparison of Prison Bed Surplus/Deficit (-)—Administration Versus LAO Proposals
	Bed Surplus (+) or Deficit (-)
	Administration	LAO
Level I	2,100	-1,200
Level II	11,600	1,400
Level III	13,300	5,300
Level IVa	-3,800	1,900
Reception center	4,100	2,500
Female	4,900	800
Totals	32,300	10,700
a  Includes Security Housing Unit and Protective Housing Unit.

Lower State Costs. Our proposals would cost much less than the Governor’s package. Were the Legislature to adopt all of our recommendations—as well as to approve the projects for which we are withholding any recommendation pending the Legislature’s receipt of additional information—the state would save about $189 million General Fund in the budget year (including recommended modifications to the adult probation grant proposal discussed in the “Local Assistance Programs” analysis later in this chapter). In addition, capital outlay costs would be reduced by about $2.1 billion due to reduced infill construction and cancellation of the CIC project. This would result in average General Fund savings of approximately $150 million for debt service annually, though the exact amount would depend on the timing of bond sales and interest rates. Figure 10 displays the amount of savings generated from each component of our alternative.

Obtain Information on Operating Impacts. We recommend that the Legislature direct the administration to provide it with estimates of the future operating costs for some of the major components of its plan. Absent this information, it will be difficult for the Legislature to fully assess the fiscal implications for the state of the new facilities proposed in the Governor’s prison capacity plan.

The Governor’s Capacity Package: A Look at the Details

In addition to assessing how the Governor’s proposals fit together as a package, the Legislature should carefully consider a number of key issues relating to each of the specific components of the plan.

Based upon our review of each of the Governor’s proposals, we find that many have merit and fit into our alternative approach, at least to some degree. However, we raise concerns about various aspects of the proposals and have identified ways to modify and improve them. We examine the Governor’s proposal to provide $50 million for a new adult probation grant program in the “Local Assistance Programs” analysis of CDCR, and comment on the proposal for $1 billion in lease-revenue financing for medical facilities as part of our analysis of the California Prison Receivership later in our analysis of “Adult Corrections.” We discuss our findings and recommendations in regard to each of the remaining proposals below.

Infill Housing and Infrastructure Improvements at Existing Prisons

We recommend that the funding proposed for infill housing projects be reduced by $1.7 billion, and funding for related infrastructure be reduced by $225 million, to limit the projects to Level IV and reception center beds.

Proposals. As shown in Figure 6 earlier, the Governor’s plan includes $2.3 billion in lease-revenue bonds to construct additional housing units at existing facilities to create capacity for an additional 16,238 inmates of varying security levels, primarily for Level I and II male inmates. Figure 11 shows the proposed housing total by security level. The department requests an additional $303 million from the General Fund in 2007-08 to improve the infrastructure at those facilities—such as water and sewer systems—in order to support a larger population of inmates. Proposed trailer bill language also permits the conversion of the Northern California Women’s Facility (NCWF) to a reception center or reentry facility for men. Currently, NCWF is being used as a satellite training academy.

Revised Fiscal Estimates Recently Provided. On February 8, 2007, we received revised cost estimates for these projects, totaling about $107 million less than originally proposed. At the time this analysis was prepared, we were continuing to review the revised proposal.

Approve Only Level IV and Reception Center Infill Beds. Consistent with our alternative prison capacity package, we recommend approval of a reduced level of funding ($600 million, a reduction of $1.7 billion) to construct only the Level IV and reception center infill housing. We further recommend approval of a reduced level of funding ($78 million, a reduction of $225 million) for the infrastructure improvement projects related to the Level IV and reception center infill housing. We recommend rejection of the infill and infrastructure proposals related to Level I, II, and III beds because, in our view, these beds will not be needed by 2012 if the Legislature approves the proposals related to parole discharge and the shift of inmates to jails. The department should also report at budget hearings regarding the basis for its revised cost estimates for infill and infrastructure projects. We will adjust our savings estimates based on further review of the revised fiscal detail supporting these proposals.

Reentry Facilities

We withhold recommendation on the funding requested to build reentry facilities so that the California Department of Corrections and Rehabilitation can provide the Legislature with key fiscal and operational details regarding these proposed new facilities.

Proposal. The Governor proposes $1.6 billion in lease-revenue bonds (or, alternatively, lease-purchase authority for projects) to create secure reentry facilities for an estimated 5,000 to 7,000 inmates. The reentry facilities would be smaller than other prisons in California which average about 5,000 inmates each and would be located near urban communities to which many inmates return after release from prison. Inmates housed in reentry facilities would be those serving the final months of their prison sentence prior to release or short-term parole violators. The facilities would provide inmates with services such as education, substance abuse, and job training to prepare them for successful reentry into the community.

Imp