BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1266 (Liu) Hearing Date: 05/17/2010 Amended: 05/11/2010 Consultant: Jacqueline Wong-HernandezPolicy Vote: Public Safety 5-2 _________________________________________________________________ ____ BILL SUMMARY: SB 1266 authorizes the Department of Corrections and Rehabilitation (CDCR) to establish an "alternative custody" program under which eligible female inmates and inmates who were the primary caregivers of dependent children immediately previous to incarceration would be allowed to participate in lieu of their confinement in state prison, as specified. This bill also provides that CDCR shall be allocated in its budget, 50 percent of the savings created by the alternative custody to administer evidence-based recidivism reduction practices to program participants. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Alternative custody Potentially substantial prison cost reduction General 50% allocation to CDCR Potentially significant cost pressure General _________________________________________________________________ ____ STAFF COMMENTS: This bill may meet the criteria for referral to the Suspense File. This bill would authorize the secretary of CDCR to create an alternative custody arrangement for female inmates, pregnant inmates, and inmates who were primary caregivers of dependent children immediately prior to incarceration, as specified and limited. The alternative custody arrangement would include living in a residential home, and CDCR would be authorized to determine exact conditions of confinement and treatment. CDCR would also be allowed to determine participation within prescribed eligibility guidelines; participation would not be automatic, and CDCR would have the discretion to disallow participation. This bill simply authorizes CDCR to develop and implement an alternative custody program. There is no cost or savings to the authorization provided by the bill but, to the extent that CDCR implements an alternative custody program, the optional program could result in substantial savings. The direct savings from this bill would result from individuals living in the community, rather than in secure custody. There would be some cost to monitoring participants, but it would not be as expensive as secure custody in a prison. Additionally, while CDCR would still be responsible for participants' medical and mental health services, it would no longer be responsible for otherwise supporting the individual. This bill specifies that the participant is allowed to work, and access available services in the community for which he or she may be eligible. Even if there is a cost to accessing services in the community, such as CalWORKs or food stamps, the overall state cost for this aid would be less than housing and securing an inmate in prison. Page 2 SB 1266 (Liu) Implementing an alternative custody program would also likely result in savings to various child welfare services agencies. This bill would provide that "primary caregivers of dependent children" are those who were primarily responsible for the care and upbringing of one or more children. The population eligible for the program is inmates who were the primary parents or guardians of children, as defined. To the extent that the children who were cared for prior to the inmate's incarceration would otherwise be in some form of foster care, this bill would result in significant savings to local, state and federal foster care funds. Savings would be most substantial for children who were placed in group homes (which can cost thousands of dollars per month) or with foster families (typically up to $900 per month). There would still be significant savings for children who were placed with other relatives (not including the child's other parent), because of their eligibility for special foster care funding and programs. This bill provides that "it is the intent of the Legislature that the department shall be allocated in its budget 50 percent of the savings created by the enactment of this section, once savings are achieved." The bill does not, however, indicate how savings will be proven, or who will determine the calculation factors. It is unclear whether potential costs to other state or local agencies incurred by serving this population will be considered in determining CDCR's "savings".It is also unclear how the cost of incarceration (as a comparative cost for calculating savings) would be determined. The department often indicates that the state incarceration cost is $49,000 per inmate, but that is an average cost that does not account for the vast differences in services required by individual inmates, including a specific inmate's medical and mental health care needs (which CDCR would continue to pay for in this program). Additionally, removing from prison a small number of inmates, would likely only result in a residual cost savings; residual cost is approximately $23,000 per inmate. Even the residual cost savings is an average not specific to the particular inmates being moved. Many of the inmates likely to qualify for this program will be women, and the cost figures identified are primarily based on men's incarceration costs because men comprise the vast majority of prison inmates. Many of those eligible are also likely to be in lower security facilities, and their incarceration currently costs less than the highest security prisons. If the cost of the program is simply calculated as an average cost per participating inmate and is compared to a prison-wide average incarceration cost, the savings reflected might not be accurate for the specific individuals being diverted to the program. If the savings is overestimated, the 50% of that calculated number would also be overestimated and allocated back to CDCR. In that situation, the actual General Fund savings would be substantially eroded. The inmate average cost is $26,000 more than residual cost. In combination with potential cost shifts to other state funded social services, the possibility exists that the program could result in a net cost to the state if the costs and savings factors are not accurately assessed. Additionally, because this language provides legislative intent, and not an appropriation, the actual allocation of savings would have to be made in a future bill, which further confuses the issue of how the ultimate savings determination will be made. Staff recommends that the savings allocation intent language be removed from the bill.