BILL ANALYSIS
SB 1978
Page 1
Date of Hearing: August 9, 2000
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
SB 1978 (Hayden) - As Amended: June 27, 2000
Policy Committee: Public
SafetyVote:5-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires any contracts to provide phone service to
state prison inmates and CYA wards to be negotiated to provide
the lowest possible costs to wards and inmates, with a proviso
that service contracts cover state expenses and provide a
reasonable profit margin for the vendor. This bill also pecifies
that state profits must not be a basis for awarding a contract.
FISCAL EFFECT
Major GF revenue loss to the extent the commission the state
receives as part of the prison payphone contract is reduced or
eliminated. According to the Department of General Services
(DGS) and the Department of Finance, this revenue loss would
likely exceed $30 million in FY 2001-02.
COMMENTS
1)Rationale . Inmates pay a significant premium for the payphone
collect call system they are required to use. The state reaps
the benefit. The author contends the state should have more
interest in encouraging inmates to maintain contact with
families and loved ones - which studies show is a key
component of rehabilitation - than in making a profit on
inmate phone calls.
According to the author, "There are more than 160,000 inmates
in California's prison system with institutions from the
Mexican to Oregon borders. For many prisoners so far removed
from their families, the phone is often their only direct
means of personal communication. With the state raking in
SB 1978
Page 2
commissions up to 43% for each call, it doesn't take a CPA to
figure out this is a real moneymaker."
"Studies have repeatedly shown that inmates who remain in
contact with their families and loved ones are less likely to
re-offend. The state of California has an interest in
encouraging communications between its prisoners and their
families as a matter of public safety. SB 1978 is an attempt
to remove an economic barrier to communication."
2)Background . About 10 years ago, the state began to collect
revenues from prison phone contracts and counties began to do
the same in jails. Because phone companies enjoy a
monopolistic concession with inmates, they are able to return
a commission as a percentage of revenues to the administering
entity.
On the state level, these commissions were once deposited in
the Inmate Welfare Fund to provide educational and
recreational services to inmates. In 1990, however, as a
result of budget difficulties, proceeds were redirected to the
GF. (This has also occurred in counties.) All inmate phone
contract revenue is now deposited in the GF and the DGS views
the inmate phone concession as similar to any other concession
contract where the state attempts to maximize receipts from
vendors who provide services on state property.
During the conference committee on the 2000-01 state budget,
this issue arose again. An informal agreement was reached
whereby the current contract (with GTE and MCI) would be
extended, and a new Request-for-Proposal developed. The new
RFP would use information gleaned from a DGS/CDC working group
charged with reviewing options for improving service,
mitigating costs to inmate families, and protecting public
safety, including a review of the federal prison system's use
of phone cards. A status report is expected some time this
month.
SB 1978
Page 3
Analysis Prepared by : Geoff Long / APPR. / (916)319-2081