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Incarceration Declines in California But Corrections Spending Remains High

A Look at the Governor's Proposed 2018-19 Budget

April 2018 | By Scott Graves

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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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Supplemental Security Income (SSI) provides federally funded cash assistance to help low-income seniors and people with disabilities pay for housing, food, and other necessities. The maximum monthly SSI grant for most recipients in California is currently $750 per month — about 74% of the federal poverty line for an individual. Also, California funds a State Supplementary Payment (SSP), which provides up to an additional $160.72 per month for most recipients. Yet, the combined maximum SSI/SSP grant for an individual — $910.72 per month — is still equal to only 90% of the poverty line. SSI/SSP funding is expected to total $9.6 billion in the current fiscal year (2017-18), with the federal government providing $7.1 billion and the state, $2.5 billion. SSI/SSP recipients live in all 53 of California’s congressional districts. For example, in the 23rd District, represented by House Majority Leader Kevin McCarthy (R-Bakersfield), nearly 27,000 residents rely on SSI/SSP to help make ends meet. In the 12th District, represented by House Minority Leader Nancy Pelosi (D-San Francisco), more than 38,000 residents are enrolled in SSI/SSP. Republican proposals to scale back federal support for the safety net could include reductions to SSI. Any such cuts would be a further blow to SSI/SSP recipients who already struggle with California’s high cost of living.

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The Supplemental Nutrition Assistance Program (SNAP) is the country’s largest anti-hunger program. SNAP benefits are 100% federally funded and help families and individuals put food on the table by paying for a minimally adequate diet. Research shows that SNAP yields important long-term benefits in terms of participants’ economic self-sufficiency, health, and educational attainment, especially for children.[1]

In California, SNAP — known as CalFresh — serves a particularly vulnerable population. On average, almost 4.3 million Californians received CalFresh assistance each month during the 2016 federal fiscal year. Over half of these participants were children, and another 7.2% were either people with disabilities or adults age 60 or older.[2] Of younger adults without disabilities who receive CalFresh benefits, more than half lived with children.[3]

By increasing purchasing power for millions of Californians, CalFresh plays a crucial role in fighting poverty. With an average CalFresh household living on a gross income of $707 a month, the $281 average monthly benefit boosted their resources by 40%.[4] Without CalFresh food assistance, 22.7% of Californians would have lived in poverty and 7.0% would have lived in deep poverty in 2013-2015.[5] However, because of CalFresh, the poverty and deep poverty rates are actually 20.4% and 5.8%, respectively.[6]

Despite being one of the most effective anti-poverty programs, SNAP faces growing threats from federal policymakers. On February 12, the Trump Administration released the President’s budget for the 2019 federal fiscal year, which proposes slashing SNAP funding by over $213 billion (nearly 30%) over 10 years, including by narrowing eligibility and cutting benefits.[7] These changes would harm those who rely on food assistance, including the growing population of older Californians who already struggle to put food on the table.[8] Instead of targeting SNAP benefits, policymakers should focus on strengthening its ability to reduce hunger, ease hardship, and improve child well-being.

[1] Steven Carlson, et al., SNAP Works for America’s Children (Center on Budget and Policy Priorities: September 29, 2016), p.2.

[2] Sarah Lauffer, Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2016 (US Department of Agriculture: November 2017), Table B.14. The 7.2% figure was provided by Center on Budget and Policy Priorities analysis of the underlying US Department of Agriculture Supplemental Nutrition Assistance Program Quality Control administrative data (Federal Fiscal Year 2016). “People with disabilities” does not include children or adults age 60 or older.

[3] Center on Budget and Policy Priorities analysis of US Department of Agriculture Supplemental Nutrition Assistance Program Quality Control administrative data (Federal Fiscal Year 2016).

[4] Budget Center analysis of Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2016 (US Department of Agriculture: November 2017), Table B.2.

[5] Budget Center analysis of data from 2013 to 2015 for the California Poverty Measure (based on US Census Bureau, American Community Survey data), produced by the Public Policy Institute of California and the Stanford Center on Poverty and Inequality.

[6] Budget Center analysis of data from 2013 to 2015 for the California Poverty Measure (based on US Census Bureau, American Community Survey data), produced by the Public Policy Institute of California and the Stanford Center on Poverty and Inequality.

[7] Office of Management and Budget, Effective, Efficient, Accountable: An American Budget — Major Savings and Reforms (Federal Fiscal Year 2019), p.128. For the 30% figure, see Center on Budget and Policy Priorities, Greenstein: Trump Budget Offers Stark Vision (February 12, 2018).

[8] Budget Center analysis of the California Health Interview Survey, 2011-2015. More than one-quarter of Californians age 65 or older (27.1%) report that they cannot afford enough food.

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The California Work Opportunity and Responsibility to Kids (CalWORKs) program is a critical component of California’s safety net for families with low incomes. CalWORKs supports about 860,000 children throughout the state by providing families with modest monthly cash grants, while helping parents overcome barriers to employment and find work. Policymakers made a number of cuts to CalWORKs during and after the Great Recession, including reducing grant levels and eliminating the annual state cost-of-living adjustment (COLA). Recent years’ budgets have incrementally increased CalWORKs grant levels, but this has not been adequate to restore cuts made in prior years.

The Governor’s proposed budget for 2018-19 — the fiscal year that begins this coming July 1 — does not increase CalWORKs grants or reinstate the COLA, despite the fact that state revenues are projected to exceed expenditures by billions of dollars. If grant levels remain frozen, the proposed maximum monthly grant for a family of three in a high cost county would be $9 lower than in 2007-08, without adjusting for inflation. If grant levels had been adjusted for inflation each year beginning in 2007-08, the maximum grant in 2018-19 would be $983, which is $269 higher than the proposed value of $714. Because policymakers have not restored the value of CalWORKs grants, the purchasing power of the maximum grant will be 27% lower than in 2007-08. This severely reduces the resources that parents could use to provide food for their family, keep their homes warm, or avoid an eviction.

For a decade following the implementation of welfare reform in 1998, the annualized maximum grant for a family of three hovered just above the deep-poverty line — defined as 50% of the federal poverty line. In 2008, however, the value of this grant dropped below the deep-poverty line. Absent a significant grant increase in the 2018-19 fiscal year, this grant will equal just 41.2% of the poverty line, leaving it below the deep-poverty line for the eleventh straight calendar year.

Despite the state’s strong economic growth in recent years, the choices policymakers made during and after the Great Recession continue to hold back families participating in CalWORKs. Due to the fact that state revenues are projected to exceed expenditures by billions of dollars, the 2018-19 fiscal year offers state policymakers the opportunity to boost the economic security of very-low-income families with children. Policymakers should implement a multi-year plan for raising CalWORKs grants and restore the state COLA to ensure that this important program is better able to assist families in California.

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