California Report, Nov. 2010
By Nick Warner (11/02/2010)

Following months of difficult budget discussions and failed negotiations, the California State Legislature finally approved a 2010-11 state budget, which the Governor signed on October 8, ending the longest budget impasse in California history. The budget package closes the $17.9 billion deficit through a combination of expenditure reductions, federal relief, additional revenues, and fund shifts. The Governor used his line-item veto ("blue pencil") authority to make an additional $963 million in reductions, raising the reserve level from $375 million to $1.3 billion.

Ultimately, the need to pass a budget after 100 days of delay outweighed the dislike and imperfection of the final documents. Many of the contentious policy reforms and tax issues were deferred until January when the legislature will likely have to revisit the projected $12 billion budget deficit next year and to make midyear adjustments.

While many of the outcomes of the budget deal are far from ideal and have some significant real impacts on the services the State of California provides to its citizens, it is important to highlight that significant positive strides were made to mitigate costly and dangerous proposals in the areas of corrections and public safety. There were no shifts or realignments of state prison inmates to county jails and no unfunded shifts to locals of adult offenders (such as adult parole).

In addition, AB 900 continues to progress by virtue of the passage of a state budget and the ability to proceed with state financing. Design-Build authority for counties to construct jails (AB 900) and juvenile halls (SB 81) was also included in the budget. The signed budget also authorizes an additional $200 million in lease-revenue bonds for local juvenile facility construction. While the specific allocation of these funds continues to be discussed and will involve a process through the Corrections Standards Authority, the approval of these additional funds represents a significant step towards addressing local capacity issues in juvenile facilities.

In terms of the Department of Corrections and Rehabilitation, $1.1 billion in reductions was made to the medical Receiver's office and from savings associated with several pieces of enacted legislation such as SB 1339 (Leno, Chapter 405, Statutes of 2010) and SB 1266 (Liu, Chapter 644, Statutes of 2010). Additionally, approximately $200 million in CDCR savings is tied to population reduction estimates.

With all of this as the backdrop to the 2011 legislative session and budget year, one of the top priorities of local public safety partners in 2011 will be the extension of the Vehicle License Fee for local public safety programs that is set to expire July 1, 2011. The VLF allocates .15% of the fee to fund critical law enforcement programs like COPS, Juvenile Justice Crime Prevention Act, Rural Sheriffs, Cal-MMET, booking fees, vertical prosecution and other key public safety initiatives. Without the extension or elimination of the sunset, it is difficult if not impossible, to effectively prepare and budget for law enforcement and other county services.

I expect realignment discussions to continue to be on the table in 2011, particularly with the state looking at restructuring the ways in which services are provided statewide and locally. The concern with previous inmate realignment proposals has been the lack of resources to accompany any such realignment in order to adequately house, treat, and supervise these offenders. Additionally, population management and capacity issues continue to obligate state and local governments to looks at ways to manage budget deficits while continuing to protect public safety and provide critical services.

The upcoming year is poised with fiscal and policy challenges, a new administration, and dozens of new legislators. With these challenges comes the necessity for the state and local governments and service providers to look at more efficient and responsive ways to provide current services.

What is encouraging is that new opportunities to utilize innovative models, evidence-based programming, technology, and public-private partnerships will likely be born out of the current fiscal necessity and will have the capacity to redesign the government sector in very positive ways.

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