The 2012-13 Budget: The 2011 Realignment of Adult Offenders—An ...

2012-13 Budge tSome Issues Still Need to Be Addressedto Promote Long-Term SuccessWhile the 2011 realignment appears to beprogressing largely as intended over its first fewmonths, we believe there are still some outstandingissues to be addressed. In this section, we raiseconcerns with the Governor’s proposal for howto distribute the unallocated revenue growth,the absence of a proposal for how to allocaterealignment dollars dedicated for the adult offenderrealignment among counties, and the Governor’sproposal to provide counties with $8.9 million inone-time funding. In addition, we are concernedthat the BSCC does not have well-defined responsibilitiesand that the formula for a state grantfor county probation departments has not beenupdated to account for realignment.Distribution of Unallocated Revenue GrowthShould Not Be Done ProportionallyAs described above, the Governor has proposeda revised and somewhat simplified accountstructure for realignment. In general, we thinkthe proposed changes are an improvement of thecurrent-year structure because the revised structurehas the potential to provide counties with morefinancial flexibility to shift some funding aroundto address local needs and priorities, at least formost of the health and human services programs in2011 realignment.We are concerned, however, with theGovernor’s proposal to distribute the unallocatedrevenue growth proportionally among the programaccounts and subaccounts. In effect, each countywould get the same overall share of the unallocatedrevenue growth as it does of the allocatedrealignment funds, with all of that revenue growthdesignated for specific accounts. The rationale forthis approach is that it would ensure that eachaccount and subaccount receives at least some shareof any revenue growth so that no single programor set of programs could be allocated a disproportionateshare of the funding in any county.The problem with the Governor’s proposedapproach is that it leaves counties with littleflexibility to focus their resources towards theirlocal priorities based on county-specific caseloads,costs, and preferences. For example, the proposedapproach could limit a county’s ability to dedicatea greater share of revenue towards a specificprogram that is growing faster or for which thereis local demand for greater services. In addition,the proposed approach is problematic becauseit reduces county incentives to manage theirprograms efficiently. In other words, a countywould have less fiscal incentive to control programcosts if that program is getting dedicated fundingregardless of factors that actually drive fundingneed such as caseloads.An alternative approach would be to have theunallocated revenue growth funding go into areserve account and allocated among counties ona per capita basis. Under this option, each countywould have flexibility to spend its share of therevenue growth as it chooses based on local preferencesand priorities.No Specified Ongoing County AllocationsFor Realignment of OffendersAs discussed above, the allocation ofrealignment dollars among counties is identifiedin statute for 2011-12 only. Allocations for at leastthe budget year need to be determined before theend of the current fiscal year. At the time thisreport was prepared, the administration had notyet proposed an allocation formula for futureyears. Based on our conversations with the administrationand various local stakeholder groups,12 Legislative Analyst’s Office www.lao.ca.gov