Estimated State Savings From Proposition 47

Background

Proposition 47 (2014) Reduced Punishment for Certain Lower-Level Drug and Property Crimes. Proposition 47, which was approved by the voters in November 2014, reduced certain nonserious and nonviolent drug possession and property crimes from wobblers or felonies to misdemeanors. (Wobblers are crimes that can be charged as either a felony or a misdemeanor.) For example, prior to Proposition 47, possession for personal use of most illegal drugs (such as cocaine or heroin) was a misdemeanor, a wobbler, or a felony—depending on the amount and type of drug. Proposition 47 specified that such crimes would always be misdemeanors. In addition, Proposition 47 specified that all thefts of property worth $950 or less are misdemeanors. Previously, some of these crimes could be punished as felonies depending on the type of property taken or if the defendant had certain previous theft-related convictions. The measure limited these reduced penalties to people who have not committed certain severe crimes, such as murder, and are not required to register as sex offenders.

Proposition 47 Requires State Savings From Its Punishment Reductions to Be Spent on Specified Programs. By reducing the size of the state’s prison population, Proposition 47 created state savings. Proposition 47 requires the Director of the Department of Finance (DOF) to annually estimate these savings and the State Controller to transfer that amount from the General Fund into a state fund created by the measure—the Safe Neighborhoods and Schools Fund (SNSF). Proposition 47 further requires that monies in the SNSF be allocated as follows: (1) 65 percent to the Board of State and Community Corrections for mental health and substance use treatment, (2) 25 percent to the California Department of Education for school truancy and drop-out prevention, and (3) 10 percent to the California Victim Compensation Board for trauma recovery services.

Administration Estimates Current-Year Savings and Projects Future Savings Biannually. As part of the Governor’s January budget proposal each year, DOF (1) estimates the state savings resulting from Proposition 47 in the current year, which is then reflected in the budget as a transfer to the SNSF in the budget year and (2) projects the estimated state savings that will occur in future years. DOF then modifies these estimates based on updated data as part of the May Revision.

Some Provisions in Proposition 36 (2024) Reduce the State Savings Attributable to Proposition 47. Proposition 36, approved by the voters in November 2024, increased punishment for various drug and theft crimes. Some of these changes allow people who possess drugs or steal property worth $950 or less to be charged with felonies instead of misdemeanors in particular circumstances, such as if they have certain prior convictions. Accordingly, these provisions of Proposition 36 partially undo the punishment reductions that were made by Proposition 47. As a result, Proposition 36 reduces the state savings attributable to Proposition 47. However, Proposition 36 also increased some penalties that have no impact on Proposition 47 or the amount of savings it generates. For example, it increases punishment for selling drugs in certain cases.

Governor’s Proposal

Estimated Savings of $81.3 Million in 2025-26 to Be Transferred to SNSF in 2026-27. The Governor’s budget estimates that $81.3 million in savings will accrue to the state in 2025-26 and be transferred to the SNSF in 2026-27. These savings are primarily associated with an estimate that the prison population will be 3,295 lower than otherwise in 2025-26 due to Proposition 47. As shown in Figure 1, these estimates represent a $13 million (14 percent) and a 501 person (13 percent) decline relative to the 2023-24 savings, the year before Proposition 36 took effect. These declines primarily reflect the administration’s estimate of the impact of Proposition 36—which went into effect halfway through 2024-25.

Figure 1

Administration Projects Decrease in Proposition 47 Savings Due to Proposition 36

	2023‑24	2024‑25^b	2025‑26^c (Estimated)	2026‑27^c (Projected)	2027‑28^c (Projected)
Estimated State Savings From Proposition 47^a	$94,773,000	$91,499,241	$81,291,695	$72,928,015	$74,825,123
Change Relative to 2023‑24	—	‑$3,273,759	‑$13,481,305	‑$21,844,985	‑$19,947,877
Percent change Relative to 2023‑24	—	‑3%	‑14%	‑23%	‑21%
Estimated Prison Population Reduction Attributable to Proposition 47	3,796	3,801	3,295	2,879	2,859
Change Relative to 2023‑24	—	5	‑501	‑917	‑937
Percent change Relative to 2023‑24	—	—	‑13%	‑24%	‑25%
^aEstimated state savings is transferred to the Safe Neighborhoods and Schools Fund in the following fiscal year. ^bProposition 36 in effect for half of the fiscal year. ^cProposition 36 in effect for the full fiscal year.

Assessment

Administration’s Methodology for Estimating Proposition 47 Savings Inaccurately Assumes That All Components of Proposition 36 Undo Proposition 47. The administration did not provide detailed backup showing its methodology to incorporate the impact of Proposition 36 into its estimate of the savings attributable to Proposition 47. However, based on discussions, it is our understanding that the administration subtracted its entire estimated impact of Proposition 36 on the prison population from its baseline estimate of the impact of Proposition 47 on the prison population. In other words, the administration’s methodology assumes that all components of Proposition 36 have the effect of reducing the impact of Proposition 47. However, as previously discussed, only portions of Proposition 36 interact with Proposition 47. Accordingly, by overestimating the amount Proposition 36 affects Proposition 47, this assumption underestimates Proposition 47 savings.

Total Proposition 36 Prison Population Impact May Be Slightly Underestimated. As we discuss in a separate analysis of the administration’s overall prison population projections, the impact of Proposition 36 on the prison population—which is incorporated into the Proposition 47 savings estimate—may be slightly underestimated. This is largely because the administration only had six months of actual data on Proposition 36 when it made the projections, not a fundamental methodological problem. Accordingly, the accuracy of the estimate should improve in future rounds of projections, as more data becomes available. (For more information, please see “State Prison and Parole Population and Other Biannual Adjustments” in our publication The 2026-27 Budget: California Department of Corrections and Rehabilitation.)

Recommendation

Direct Administration to Correct Its Proposition 47 Savings Estimate Methodology in the May Revision. We recommend that the Legislature direct the administration in spring budget hearings to correct its methodology for estimating the savings attributable to Proposition 47 in the May Revision. We recognize that any estimates will be subject to significant uncertainty due to the limited amount of actual data since the enactment of Proposition 36. However, the problem we identify with the administration’s methodology results in a structural underestimate of the savings, regardless of the data that are available. We will continue to monitor Proposition 36 implementation and the prison population and make recommendations as needed based on the updated information available at the May Revision, including the administration’s revised estimates.