Fewer State Prisoners, Higher Cost Per Inmate

August 7, 2013

California’s prisons, once bulging at the seams, have slimmed down considerably since counties took responsibility for housing and supervising certain low-level offenders as part of a state-to-county “realignment” that began in October 2011. The state’s 33 prisons currently house about 119,600 inmates — 17.2 percent below the September 30, 2011 (pre-realignment) level of 144,456. In fact, the prison population is now roughly the same size as in 1994-95, when it ranged from about 115,000 to just over 121,000.

Yet, even as the number of prisoners has dropped since realignment, the cost per inmate – adjusted for inflation – has continued to climb and is substantially higher than in the mid-1990s, as we show in our recent report on state corrections spending. California is expected to spend about $60,000 for each inmate in 2013-14 — 82.3 percent higher than in 1994-95, when the state spent slightly less than $33,000 per inmate, after adjusting for inflation. In stark contrast, California’s spending per K-12 student has risen by just 17.9 percent during the same period — from an inflation-adjusted $6,971 in 1994-95 to a projected $8,219 in 2013-14. In other words, spending per prisoner in California has increased nearly five times faster than spending per K-12 student over the past two decades.

Our report identifies a number of factors that have contributed to this substantial increase in spending per inmate. Staffing levels – including correctional officers and other prison-related employees — are significantly higher today than in the mid-1990s, even though the number of inmates is about the same. Salary increases have also contributed to the rising cost per inmate, as has the dramatic growth in health care spending — an increase driven by various court orders and settlements. California is expected to spend $2 billion on medical, dental, and psychiatric services for inmates in 2013-14, more than triple the $590 million the state spent on those same services in 1994-95, after adjusting for inflation. In addition, the difficulty of reducing fixed costs — such as utilities, leases, and support staff — over a relatively short period likely has contributed to rising spending per inmate since realignment took effect, as our report explains.

This rising cost per inmate is troubling and deserves greater scrutiny by state policymakers, since every dollar directed to the prison system leaves one less dollar to spend on other public systems and services. Certainly, increases in corrections spending may be warranted in some cases, such as to expand and improve rehabilitation services. In other cases, higher spending may be unavoidable, particularly for inmate health care, which remains under the direct management of a court-appointed federal Receiver. On balance, however, policymakers do have choices about how much funding is allocated to the state corrections budget and how those dollars are spent. Reducing — or at least holding the line on — corrections spending over time would free up scarce state dollars that could be redirected to education, health care, transportation, and other essential state priorities in the years ahead.

— Scott Graves

New CBP Report Looks at State Corrections Spending After Realignment

June 26, 2013

In 2011, state policymakers transferred responsibility and funding for public safety and other services from the state to the counties. A major part of this “realignment” was that counties assumed responsibility for certain “low-level” offenders and parolees, all of whom previously would have served state prison sentences and been supervised by state parole agents upon release.

Yesterday, the CBP released a new report that examines state spending on corrections and assesses how it has changed since realignment. A Mixed Picture: State Corrections Spending After the 2011 Realignment shows that:

  • While state corrections spending is below the pre-realignment level — with annual General Fund savings projected to be $1.3 billion in 2013-14 — these savings are largely offset by county corrections spending that is funded with dedicated special fund revenues provided through the state budget.
  • Per capita costs for California’s prison and parole populations have continued to rise in recent years and are much higher than in the mid-1990s, even after adjusting for inflation.
  • More than half (56.5 percent) of the state corrections budget goes toward prison security and operations, while nearly one-quarter (23.7 percent) of corrections dollars pay for adult inmate health care.

A Mixed Picture also includes a status report on the federal court order to reduce California’s state prison population.

— Steven Bliss

Expanding Medi-Cal While Protecting Counties’ Health Care Safety Net

May 24, 2013

Expanding Medicaid to parents and childless adults who are currently excluded — a change that could extend health coverage to hundreds of thousands of low-income Californians next year — is a cornerstone of federal health care reform. While there is broad agreement among policymakers that California should adopt this expansion of its Medi-Cal Program, there has been considerable debate over how the expansion should occur, as we explained in our recent Medi-Cal chartbook. Governor Brown settled one point of contention last week when he endorsed, in his May Revision, a state-led expansion of Medi-Cal, dropping his January proposal that left open the possibility of counties taking the lead.

At the same time, however, the Governor’s May Revision maintained his proposal to link the Medi-Cal expansion to a major “realignment” of fiscal and programmatic responsibilities for human services programs from the state to the counties. Under this proposal, additional county costs for three programs — CalWORKs, CalWORKs child care, and CalFresh — would be funded by redirecting to those programs most of the state dollars that counties currently use to provide health care to low-income, uninsured (“medically indigent”) residents. The Governor assumes that counties will no longer need these dollars as many medically indigent adults newly enroll in Medi-Cal under the expansion. The Governor therefore proposes to use these county “savings” — which would be determined based on a formula negotiated with lawmakers and counties — to reduce the state’s General Fund costs for human services programs dollar-for-dollar. Using the Administration’s version of the formula, the May Revision estimates that $300 million would be redirected from counties’ health care infrastructure in 2013-14, followed by shifts of $900 million in 2014-15 and $1.3 billion in 2015-16 — a total of $2.5 billion over three years.

From our vantage point, the Governor’s proposal raises three major concerns:

  • The Governor has not provided a policy rationale for pursuing a new state-to-county realignment. State policymakers periodically transfer responsibility for public services from the state to the counties, and vice versa, in an effort to improve service delivery and outcomes and align fiscal incentives with program responsibility. However, the Governor has not offered a clear policy justification for pursuing a new realignment that encompasses CalWORKs, child care, and CalFresh. The Administration has provided few details about the realignment concept, and evaluating the benefits and costs of the proposal (for both low-income families and counties) would require considerable time — time that lawmakers don’t have given that they must work out the details of the Medi-Cal expansion within the next two to three weeks. Also, the Governor’s proposal adds unnecessary complexity to the already-challenging decision of how to implement the Medi-Cal expansion, as the Legislative Analyst’s Office (LAO) has pointed out.
  • The Governor’s proposal would shift too much funding — too quickly — from county health care services. The Governor proposes to redirect $300 million from counties concurrent with the Medi-Cal expansion in 2014, with the annual amount shifted escalating to more than $1 billion within a couple of years. This rapid increase is attributable to both the structure of the formula (as proposed by the Administration) and the fact that all of the county “savings” would accrue to the state’s benefit, with no savings set aside for counties to reinvest in local health care services and infrastructure. The California State Association of Counties argues that “redirecting this money now will force counties to cut critical public health and safety net services and will reduce funding available to care for the remaining uninsured.” This is why we’ve suggested that policymakers take a “wait and see” approach regarding the appropriate level of state funding for indigent health care services. It’s unclear how the Medi-Cal expansion will affect the use and the cost of the county health care safety net in the coming years. As this picture comes into focus, lawmakers — armed with better information — can consider whether and how to shift any county savings that result from health care reform. In the meantime, policymakers could consider adopting the framework proposed by Health Access, under which the state would encourage counties to repurpose their Low Income Health Programs to serve the many Californians — an estimated 3 to 4 million — who are expected to remain uninsured even after health care reform is fully implemented.
  • The size of the proposed fund shift does not square with the Administration’s assertion that these dollars are needed to offset new state costs for Medi-Cal. The Administration’s primary justification for shifting dollars from county health care services is that the state “cannot afford” to both increase its spending on Medi-Cal and continue the current level of funding for county indigent health care. This argument has struck many advocates as curious because the federal government will fund the entire cost of the Medi-Cal expansion through 2016, at which point the state’s share of costs will increase to 5 percent in 2017 and gradually rise to a maximum of 10 percent in 2020. However, the Administration also argues that the state will have new costs for currently eligible Californians who are expected to newly enroll in Medi-Cal starting next year as a result of various eligibility simplifications now required by federal law. Yet the cost of these new enrollees is expected to be relatively small over the next few years. Using “moderate-cost assumptions,” the LAO estimates that the state’s cost for this already-eligible group will be roughly $100 million in 2013-14, rising to about $360 million in 2015-16. (The Administration has released larger estimates, but the LAO suggests those projections are “likely too high.”) In short, if the purpose of redirecting dollars from county health care services is simply to offset state Medi-Cal costs that are attributable to health care reform, then any amounts shifted would have to be significantly below the Governor’s proposed $2.5 billion over three years — and no higher than $100 million in the first year alone.

The federal government’s commitment to initially fund 100 percent of the cost of the Medi-Cal expansion gives California a historic opportunity to extend health coverage to hundreds of thousands of low-income adults while also ensuring that the county health care safety net remains strong for the millions of Californians who will continue to rely on it in the years to come. California is not faced with an either/or proposition; we can do both.

— Scott Graves

New CBP Report Looks at Realignment, Which Has Nothing To Do With Your Car

June 8, 2012

For most Californians, the word “realignment” probably brings to mind something a mechanic does to keep their cars from pulling to one side or the other. In fact, it refers to a major policy shift the Legislature initiated last year: the transfer of several public safety, health, and human services programs – along with a dedicated source of funding – from the state to the counties beginning in 2011-12, as we explain in our new report. The public safety side of realignment has gotten the most media attention, and for good reason. Counties’ new responsibilities for managing, supervising, and rehabilitating “low-level” offenders and parolees will transform the state’s criminal justice system over the next several years as well as bring down state spending on prisons. Nonetheless, a little-known fact about realignment is that nearly two-thirds of the dollars – $3.9 billion out of $5.9 billion in 2012-13 – support health and human services programs, including Child Welfare Services, Foster Care, substance abuse treatment, and mental health services.

While realignment is intended to be permanent, the current framework was adopted with the understanding that the Legislature and voters would need to finalize the details this year. That’s why state lawmakers and Governor Brown are now working on a long-term framework that is likely to be included in the final 2012-13 budget agreement. It’s also why the Governor has proposed a ballot measure for November 2012 that would place key realignment provisions in the state Constitution in order to ensure that counties will receive ongoing funding as well as to provide counties and the state with protections against certain unanticipated costs. These protections, along with the legislation currently under consideration, are central to building a long-term framework for realignment in 2012 and beyond.

– Scott Graves

State Corrections Policy: On the Verge of Profound Change

September 15, 2011

A groundbreaking change adopted as part of the 2011-12 budget agreement is about to take effect: Beginning October 1, counties will assume responsibility for “low-level” criminal offenders, which generally refers to individuals who have committed non-violent, non-serious, non-sex crimes. As we describe in a new report that looks at state spending on corrections, this historic “realignment” of responsibility – along with a dedicated source of funding – from the state to the counties is intended to divert, over the next few years, tens of thousands of men and women from the state’s overcrowded prisons.

Transferring low-level offenders to county custody and supervision is partly a response to rising state corrections expenditures and the costly cycling of non-violent felons through state prisons. Our new report shows that state spending on corrections has increased by nearly 1,500 percent over the past generation, more than four times the rate of General Fund spending as a whole. Shifting low-level offenders to county supervision has the potential to substantially reduce state corrections spending, thereby reversing the trend of recent decades, in which a larger and larger share of the state budget has gone toward state prisons and parole. Savings could be reinvested in education, child care, health care, and other public services that help build a strong economy and enhance California’s quality of life.

But the benefits of criminal justice realignment go beyond dollars and cents: Realignment gives counties an opportunity and the incentives to focus on substance abuse treatment, basic skills education, and other rehabilitative services that can improve outcomes for offenders and foster public safety. Female offenders would particularly benefit from such a sea change in corrections policy, since more than half of women currently in prison are classified as low risk, serving time for property or drug crimes, as CBP Executive Director Jean Ross pointed out in a recent op-ed co-authored with Rosenberg Foundation President Timothy Silard. Shifting from a predominantly incarceration-based model toward alternatives, however, will require “a significant paradigm shift,” according to the California State Association of Counties: “The successful model will not be an incarceration model, but one that seeks to divert and rehabilitate citizens,” allowing them to become “productive members of our community.” With implementation hinging on the decisions of local officials in 58 counties, Californians across the state have a clear interest in monitoring how this once-in-a-lifetime policy change rolls out over the next several years.

— Scott Graves