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Fact Sheet

California Prepares to Say Goodbye to Out-of-State Prisons

July 2018 | By Scott Graves

In the fall of 2006, with California’s prisons bulging at the seams and the state facing lawsuits targeting prison overcrowding, Governor Arnold Schwarzenegger used his executive authority to “temporarily house” California prisoners in private correctional facilities in other states. (The Legislature endorsed this policy soon after it was implemented.) Initially, the numbers were small: Within a couple of months of the Governor’s emergency proclamation, just 80 Californians had been sent to prison beyond the state line (to Tennessee). However, California’s use of out-of-state “contract beds” expanded rapidly. By late 2010, more than 10,000 people were serving their California prison sentences outside of the state, including in Mississippi and Oklahoma.

Advocates for incarcerated adults criticized the state’s policy, arguing that “transferring prisoners out of state further disrupts ties to family and community.” Concerns were also raised about the conditions in private, for-profit facilities. Nonetheless, state policymakers saw the use of out-of-state facilities as a key strategy for addressing severe overcrowding in California’s prisons, at least temporarily. The apparent need for this strategy became all the more urgent when, in August 2009, a panel of federal judges ordered the state to cap its prison population at 137.5% of the prison system’s “design capacity.” At the time of this order — which was upheld by the US Supreme Court — California’s prison population far exceeded the cap. More than 150,000 adults were housed in state prisons that were designed to hold a total of about 80,000 people, putting the prison population at 188% of capacity.

Yet, thanks to a series of criminal justice reforms adopted by state policymakers and the voters — reforms that have significantly reduced incarceration — California has been able to comply with the court-ordered prison population cap while simultaneously scaling back its reliance on out-of-state facilities. Since peaking at over 10,000 in the early 2010s, the number of California prisoners housed outside of the state has declined to less than 3,000, as Governor Brown’s administration has pursued a policy (articulated in 2012 and again in 2016) that aims to end the use of contract beds in other states. Now, the culmination of this policy is just around the corner: California is expected to sever its ties with all out-of-state contract facilities by the end of January 2019, ending an era that began a dozen years ago during the depths of California’s prison overcrowding crisis.

Does ending the use of out-of-state facilities mean that California’s work is done when it comes to criminal justice reform? Not by a longshot. Although the state continues to comply with the court-ordered prison population cap, the prison system — which is overseen by the California Department of Corrections and Rehabilitation (CDCR) — remains severely overcrowded. Currently, approximately 115,700 adults are incarcerated in 34 state prisons designed to hold about 85,000 people — 136% of capacity. In addition, more than 11,000 adults are housed in other in-state facilities under the CDCR’s jurisdiction, including public and private contract facilities.

With incarceration projected to continue declining modestly over the next few years, California should soon be able to scale back the use of private in-state contract facilities — a goal explicitly spelled out in the 2018-19 state budget package — and could be in a position to close at least one state prison. However, downsizing California’s costly prison infrastructure in a bigger way would require additional criminal justice reforms, such as addressing the state’s harsh, one-size-fits-all sentencing laws. By more rapidly reducing incarceration, California could plan for the closure of multiple prisons and reinvest the savings in a range of public services and systems that can help to promote rehabilitation, reduce poverty, and strengthen families and communities. Watch for more Budget Center analysis and commentary on this topic in the coming months.

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In 2017, Governor Brown signed AB 19 (Santiago), establishing the California College Promise, which provides state funding to community colleges to improve college readiness, increase completion rates, and close achievement gaps. The 2018-19 state budget funded the Promise, allocating $46 million to the program.

Promise programs are place-based programs that seek to increase college graduation rates by incentivizing college attainment and rewarding students who satisfy specified criteria. These programs vary in eligibility requirements, funding, and overall structure. Some Promise programs offer guaranteed admission to a university, while others provide financial support based on need or merit.

The California College Promise is a voluntary program administered by the California Community Colleges Chancellor’s Office. The program provides funding to community colleges that advance the program’s goals and implement the following program strategies:

  • Partner with one or more K-12 schools to establish an Early Commitment to College Program.
  • Partner with one or more K-12 schools to support and improve high school student preparation for college and reduce postsecondary remediation.
  • Utilize evidence-based practices to improve outcomes for underprepared students.
  • Participate in the Guided Pathways Grant Program, which helps students stay on track from entry to graduation.
  • Maximize student access to need-based financial aid programs, including by participating in the Federal Direct Student Loan Program as well as ensuring students complete the Free Application for Federal Student Aid (FAFSA) or Dream Act application.

The Promise program allocates funding to districts using a formula based on factors such as number of units taken in the past by first-time, full-time students, and number of Pell grant recipients. The $46 million allocated in the state budget reflects the estimated cost for districts to cover the fees of first-time, full-time students based off 2016-17 data; however, colleges have discretion in how to use the funding they receive. While some colleges may elect to waive tuition for all or some first-time, full-time students (including undocumented students), others may choose to provide child care resources, or help financially needy students cover their non-tuition costs of college (such as textbooks and transportation).

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In May 2017, the US House of Representatives narrowly approved — by a 217-to-213 vote — the American Health Care Act of 2017 (AHCA). This bill, which did not advance beyond the House, would have reversed California’s progress in extending health coverage to millions of people under the framework of the federal Affordable Care Act (ACA), which President Obama signed into law in 2010. California’s House delegation split along partisan lines: All 14 Republicans voted for the AHCA, while all 39 Democrats voted against it. Key provisions of the bill targeted Medicaid, which is known as Medi-Cal in California and covers over 13 million Californians with low and moderate incomes. The AHCA would have 1) phased out the expansion of Medicaid eligibility to certain low-income adults ages 19 to 64, including adults without dependent children, and 2) capped annual federal funding for the entire Medicaid program. Overall, the House bill would have shifted nearly $6 billion in costs for Medi-Cal from the federal government to California in 2020, rising to an annual shift of $24 billion by 2027, according to state projections. Such a massive cost-shift would have forced deep state spending cuts and put at risk the health and economic security of millions of Californians. Proposals to cut federal Medicaid funding and roll back other key provisions of the ACA could re-emerge in 2019 depending on the outcome of the upcoming midterm elections.

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In recent years, California has made significant progress in reducing incarceration. The number of adults incarcerated at the state level, which peaked at more than 173,000 in 2007, declined to 131,260 by June 2017 — a reduction of nearly one-quarter. This substantial drop resulted largely from criminal justice reforms adopted by state policymakers and the voters following a 2009 federal court order that required California to reduce overcrowding in state prisons.[1] The most recent of these reforms was Proposition 57, a 2016 ballot measure that provided state officials with new tools to reduce the amount of time that people spend in prison.[2]

State-level incarceration is expected to continue falling over the next several years, “driven by the expected impacts” of Prop. 57, according to the California Department of Corrections and Rehabilitation (CDCR).[3] The CDCR projects that the number of incarcerated adults will decline to about 124,400 by June 2022 — a modest 5% drop (see chart) from the June 2017 level (131,260). The Brown Administration anticipates that by freeing up a relatively small amount of space in state prisons, Prop. 57 — along with other recent criminal justice reforms — will allow the state to end the use of out-of-state “contract facilities” by fall 2019.[4] However, the Administration does not anticipate closing any state prisons, which account for the vast majority of corrections-related spending at the state level.

Despite the ongoing decline in incarceration, spending on state corrections remains high. Under the Governor’s proposed budget, combined funding for the CDCR and the Board of State and Community Corrections would be $12.1 billion in 2018-19 (the fiscal year that begins this coming July 1) — $2 billion higher than the 2012-13 level, after adjusting for inflation.[5] This growth generally reflects spending increases that have outpaced inflation, including for prison health care (up by 37.8%, or $857 million); for CDCR statewide administration (up by 23.4%, or $96 million); and for prison security and operations (up by 18.7%, or $1.1 billion), which includes the cost of salaries and benefits for correctional officers and support services for incarcerated adults, such as meals and clothing (see chart).[6]

Significantly reducing corrections spending will require California to go beyond recent reforms. This should include simplifying the state’s complex Penal Code with an eye toward shortening prison sentences. Such reforms would further reduce incarceration, allowing the state to close costly prisons. This, in turn, would free up substantial revenues that could be reallocated to a range of services and supports that can promote rehabilitation, reduce poverty, and strengthen families and communities.

[1] For a discussion of these reforms and the 2009 federal court order, see Scott Graves, Corrections Spending Through the State Budget Since 2007-08: Still High Despite Recent Reforms (California Budget & Policy Center: November 2015), pp. 1 and 3 and endnote 4.

[2] Scott Graves, Proposition 57: Should Voters Provide State Officials With New Flexibility to Reduce the Prison Population? (California Budget & Policy Center: October 2016).

[3] California Department of Corrections and Rehabilitation, Fall 2017 Population Projections (January 2018), p. v.

[4] Department of Finance, Governor’s Budget Summary 2018-19 (January 2018), p. 71. About 3,500 Californians are housed in facilities in Arizona and Mississippi. The court-imposed prison population cap (137.5% of prisons’ “design capacity”) precludes the state from housing all of these individuals in state prisons at this time.

[5] These expenditures generally reflect the operational costs of the state correctional system. This spending excludes capital outlay as well as state funding that counties receive each year to carry out certain correctional responsibilities that they assumed as part of the state-to-county “realignment” enacted in 2011.

[6] Budget Center analysis of Department of Finance data. The increase in prison health care spending is partly attributable to a shift of roughly $270 million from the Department of State Hospitals’ budget to the CDCR’s budget, which took effect on July 1, 2017. Excluding this shift, prison health care spending is up by 25.9% since 2012-13, after adjusting for inflation.

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As legal subdivisions of the state, California’s 58 counties play a key role in delivering public services at the local level. Counties operate an array of health and human services programs on behalf of the state, including foster care, public health and mental health services, and Medi-Cal (California’s Medicaid program). Counties also carry out a broad range of countywide functions, such as overseeing elections and operating, along with the courts and cities, the criminal justice system. Finally, counties provide some municipal-type services in unincorporated areas, including policing and fire protection.

Each year, counties develop their budgets for the upcoming fiscal year through a months-long process that reflects both unique local practices and the requirements of state law. (The fiscal year runs from July 1 to the following June 30.) A key task in crafting the annual spending plan is estimating how much revenue the county will receive, since this number helps to determine whether the county can expand and/or improve service levels, as opposed to maintaining or (during economic downturns) reducing services. Statewide, counties received $69.2 billion in revenue in 2015-16.[1] Nearly half (47.1%) of this revenue came from the state and federal governments, and local property taxes made up almost one-fifth (19.5%) of the total.

Because state and federal dollars comprise a large share of county revenues — and typically come with strings attached — county budgets, to a large degree, reflect funding and policy choices made by the Governor and state legislators as well as by federal policymakers. However, county budgets also reflect local choices, as counties allocate their limited “discretionary” dollars, particularly property tax revenue, to locally determined priorities.

Statewide, counties spent $66.9 billion in 2015-16, with more than half (54.6%) of these dollars going to public protection or public assistance. Public protection includes spending on the district attorney, adult and juvenile detention, policing provided by sheriff’s departments, and probation. Public assistance includes spending on cash grants for Californians with low incomes, including for families with children in the CalWORKs welfare-to-work program. Large shares of county spending in 2015-16 also supported business-type “enterprise” activities (15.5%) — such as airports, hospitals, and golf courses — and health-related services (15.2%).

[1] The county revenue and spending data reported in this Fact Sheet — for which 2015-16 is the most recent year available — come from the Local Government Financial Data website of the California State Controller’s Office. The figures exclude the City and County of San Francisco, which reports revenues and expenditures as a city rather than as a county.

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The Supplemental Nutrition Assistance Program (SNAP) — known as CalFresh in California — will provide food assistance to an estimated 4 million Californians on average each month during the 2017-18 state fiscal year. The percentage of Californians receiving CalFresh varies across the state’s 53 House districts but is especially high in the San Joaquin Valley. For example, an estimated 1 in 4 people will receive CalFresh benefits in both the 21st District (R-Valadao) and the 16th District (D-Costa) (see Map 1 below). In contrast, the share of residents receiving CalFresh benefits is smaller in higher-income, coastal districts such as the 33rd District (D-Lieu), where just 2 out of every 100 individuals are enrolled in CalFresh (see Map 2 below).

The Farm Bill authorizes funding for SNAP and other food and agriculture programs and will expire later this year. Federal reauthorization of the Farm Bill presents an opportunity to expand SNAP’s powerful and cost-effective antipoverty effects. However, Republican leaders in Congress have set a goal of substantially scaling back federal support for SNAP. Moreover, President Trump’s proposed budget for federal fiscal year 2019 — which begins on October 1 — would cut SNAP funding by nearly 30% over the next 10 years by restructuring the program and limiting benefits and eligibility. Cuts of this magnitude would increase hunger among children, seniors, and individuals with disabilities.

Map 1

Map 2

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Food assistance provided by the Supplemental Nutrition Assistance Program (SNAP) — known as CalFresh in California — significantly reduces the rate and severity of poverty throughout the state. Without CalFresh, the poverty rate would have been higher in every California congressional district from 2013 to 2015, according to updated California Poverty Measure data recently produced by the Public Policy Institute of California and the Stanford Center on Poverty and Inequality. During this period, CalFresh reduced the poverty rate by 2.3 percentage points statewide, with the largest reductions — up to 5.4 percentage points — in districts in the Central Valley (see maps below.) More than 30,000 people per year would have been in poverty without CalFresh in Districts 16 (D-Costa), 21 (R-Valadao), 8 (R-Cook), and 40 (D-Roybal-Allard). Food assistance through CalFresh also lessened the severity of poverty for 3.5 million more people per year across California by reducing their poverty gap, or the shortfall between a family’s level of resources and the poverty threshold.

Congress will soon need to reauthorize the Farm Bill, which sets eligibility and funding levels for SNAP, but both President Trump and some congressional leaders have proposed cutting federal support and limiting who is eligible. Cuts like these would greatly reduce the effectiveness of one of California’s most important tools to mitigate poverty.

Map 1

Map 2

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Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants are a critical source of basic income for well over 1 million low-income people with disabilities and adults age 65 or older in California. Grants are funded with both federal (SSI) and state (SSP) dollars. Currently, the maximum monthly grant for an individual is about $911, which consists of an SSI grant of $750 and an SSP grant of $160.72. In order to help close budget shortfalls during the Great Recession, state policymakers made deep cuts to the SSP portion of the grant, reducing it from $233 per month in early 2009 to $156.40 per month by mid-2011. With an improving fiscal outlook, state policymakers increased the SSP portion by a modest $4.32 per month starting in January 2017. However, no additional state increases have been provided since then, and the Governor’s proposed 2018-19 state budget assumes that the SSP portion will remain frozen for another year. Because state cuts largely remain in place, SSI/SSP recipients have less money in their budgets to buy basic necessities such as medicine and food. (People enrolled in the SSI/SSP program are not eligible for CalFresh food assistance.) They also have less money to pay the rent. In fact, in every county, the “Fair Market Rent” (FMR) for a studio apartment exceeds 50% of the maximum SSI/SSP grant for an individual. People are at greater risk of becoming homeless when housing costs account for more than half of household income.

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