National: Good News and Bad News-The Recession's Impact on State Corrections Budgets
Editor’s note: this article was originally written in December, 2001, as states were just beginning to grapple with serious budget shortfalls. It’s been a rapidly changing landscape, ever since. We have updated the picture, and the article below represents our best effort to describe the status of state budgets in relationship to corrections spending, as of early May, 2002.
Article by Julia Lutsky and Brigette Sarabi
Editor’s note: this article was originally written in December, 2001, as states were just beginning to grapple with serious budget shortfalls. It’s been a rapidly changing landscape, ever since. We have updated the picture, and the article below represents our best effort to describe the status of state budgets in relationship to corrections spending, as of early May, 2002.
Just when the recession began depends upon which economist you read; that the recession had arrived became evident in the aftermath of the September 11th tragedy. Tax receipts (from sales, corporate and personal income taxes), are all reported down and many will fail to meet projected levels. Budgets for fiscal year 2002 show 44 states reporting collections below projections; a third of the states report that they are not on target for expenditures. Overall, the budget shortfall at the state level this year is estimated at $40 billion. The budget crisis is highlighting the issue of government spending on incarceration—especially as people begin to see the cuts to education, human services and other basic programs that are required as corrections spending locks-up more and more of available revenues. The way states are choosing to respond to the budget crisis has been a fast-moving and very fluid landscape, especially in the arena of corrections spending.
When revenues are down and needs are up, how do states balance their budgets? Some of the measures available to address budget problems include: budget cuts; use of reserves (such as tobacco settlement money); hiring and/or wage freezes for state employees; and reconsideration of previously planned or approved tax cuts. Many states are being forced to look at all of these options this year.
How will this downturn in the economy affect the present emphasis on “bigger and stronger” prisons? Since a nationwide decline in the crime rate began nine or ten years ago the number of prisoners in some states, notably in the northeast, has begun to decline slightly. During the last six months of 2000, the state prison population declined by approximately 6,200 or 0.5 percent, the first such measurable decline since 1972. The number of federal prisoners, however, actually rose 7.5 percent - from 135,246 at the end of 1999 to 145,416 projected for year end 2000. Because of the declining crime rate, the trend to fewer prisoners might be expected to increase in the coming years, but whether it will or not remains to be seen.
While declining crime rates and growing budget constraints offer an opportunity to rethink corrections spending, there are additional issues and trends that we must be aware of. As a general rule, the number of prisoners tends to rise during times of economic recession. The drive to privatize has not decreased and companies dependent on prison construction and operation are not about to fold their tents and fade away. On the contrary, their pressure, and political contributions, are likely to increase. Pressure from communities to keep existing prisons or to construct new ones for the jobs they would provide is also likely to increase because of layoffs in both the public and the private sectors. And finally, at year-end 2000, state prisons were operating between full and 15 percent above capacity while federal prisons were operating at 31 percent above capacity.
The prison-building boom itself is likely to be slow to respond to the budget crisis. What may well be affected, however, are the few left to prisoners such as health care (including mental health care) and the few remaining education, vocational training and drug treatment programs.
Ohio, facing a predicted two-year shortfall of $1.5 billion, made a decision in January to close the medium-security Orient prison, which held 1,724 prisoners. Dr. Reginald Wilkinson, Director of the Ohio Department of Rehabilitation and Corrections, had a choice of 34 prisons to close as a cost-cutting measure, including private prisons. Closing Orient is projected to save $41.9 million in annual operating costs and cancel $16 million in capital projects. Ohio was also cited by the Justice Policy Institute in a February report as one of three Republican controlled states (Louisiana and Texas were the others) that had made moderate changes to sentencing and parole policies, as well as promoting additional alternatives to incarceration, as a means of responding to rapidly escalating corrections costs. According to Wilkinson, Ohio’s approach to making careful reforms are what allowed it to close the prison and make other cost-cutting measures without decreasing public safety. In 2001, Ohio’s prison population decreased by 2.1 percent, as compared to 1.4 percent average decline in the rest of the Midwest.
Louisiana has a Department of Corrections budget of $600 million this year, up from approximately $340 million six years ago, largely because of the introduction of mandatory minimum sentencing. A bill passed by the State Senate in 2000 containing large scale sentencing reforms will, among other things, end mandatory minimum sentencing for some non-violent offenders, reduce sentences for drug possession and create a panel to consider the release of prisoners. It is estimated these measures could save the state $60 million.
The Michigan Department of Corrections $1.6 billion budget has been cut by $54.9 million (part of $295 million in total cuts to the state budget). As part of the cuts, the state closed prisons, including the Jackson Maximum Facility and the Michigan Reformatory in Ionia. In an effort to save corrections officers’ jobs, the Corrections Department has been moving sentenced prisoners still in county jails to the state’s Reception and Guidance Center before going to the prisons where they will serve their sentence. But county sheriffs are saying the loss in state money will cause a financial crunch for them and may cost local officers their jobs (the Corrections Department has to pay counties to house state prisoners in local jails).
Looking at a looming state budget crisis, in December Illinois made the decision to close the Joliet Correctional Center, its oldest maximum security prison. But the new year brought little good news for the budget, and Governor George Ryan announced plans in February to close two more prisons, the Vienna Correctional Center and a juvenile prison in St. Charles. This announcement brought an angry outcry from the corrections officers’ union, AFSCME, as well as local towns where the prisons are located. By April, as the projected state budget deficit for the fiscal year beginning in July reached $1.2 billion, Governor Ryan made a further proposal to release 4,500 drug offenders from Illinois prisons to cut costs. “The state of Illinois has never had problems like we have today,” said Ryan, a Republican, at an April press conference. Meanwhile, state legislators, caught between a fiscal crisis and upcoming elections, are hesitant to make cuts or to raise taxes. In early April, the Democrat-controlled Illinois House bowed to major pressure from the corrections officers’ union and local towns, and passed legislation to stop the closure of the Vienna and St. Charles prisons. And the Cook County state’s attorney’s office is opposing the release of drug offenders with less than seven months left on their sentence, as the Governor has proposed. (As this article goes to press, final decisions on these cuts had not yet been made.)
Then there’s California, where the budget issues related to corrections are raising more than a few eyebrows. Facing a projected $22 billion state deficit, and a declining state prison population, Governor Gray Davis is still pushing his plan to spend almost $600 million for a new, 5,000 bed prison in Delano that prison opponents, including several state legislators, claim is not needed. He also approved a major pay hike for the members of the California Correctional Peace Officers Association (CCPOA, the union representing prison guards) that will add $500 million in annual costs to the corrections system. These moves by the Governor have led to several strongly worded editorials in major newspapers in the state, which question Davis’ continued largesse to the prison system at a time when all other state programs are facing devastating cuts. More than one editorial has commented on the fact that Davis received over $2 million in campaign contributions from the guards’ union, as well as over $200,000 in additional contributions just weeks after he approved the unprecedented pay raise. In addition, Davis has approved the closure of five, privately run correctional facilities in the state (workers in these facilities are not represented by the CCPOA). This has brought the private prison industry, as well as local towns facing job losses from the facilities, into the political arena, where they are lobbying hard for the continuation of these facilities. As we go to press, the fight around California’s corrections budget is still hot and heavy.
In our region, both Oregon and Washington are facing severe budget shortfalls that could affect corrections spending. Oregon, with the nation’s highest unemployment rate, is facing a deficit approaching $1 billion for the current biennium which runs through June, 2003. Last fall, state agencies were asked to plan for ten percent cuts. The Oregon Department of Corrections said a ten percent cut would require closing six minimum-security prisons. Closing these facilities would have required the release of approximately 1,600 minimum-security prisoners who are within two years of their scheduled release. Not surprisingly, especially in an election year, after two special sessions the Oregon legislature maintained enough funding for the DOC to avoid closing any facilities. In addition, funding to proceed with building new prisons in Madras and Lakeview has also been maintained so far (money from the general fund is required to cover the debt payments on new, and past, prison construction—currently amounting to $50 million per year).
The Oregon DOC did make some cuts. Food costs, currently at $2.88 per prisoner/day will decrease 20 percent further to $2.30; this will save the department some $4.5 million. Major cuts were made to health care for prisoners: medical services will be consolidated so that there is a central pharmacy, specialty services like dialysis will be located at only one institution and Registered Nurses will be replaced by Certified Medication aides. But so far, the Oregon Department of Corrections was cut much less severely than other state programs such as higher education. With a third special session expected in late May or early June, and a looming deficit projected for the next biennium, it’s too soon to say how Oregon will respond to the spiraling costs of corrections in the long run.
Washington’s budget situation is every bit as precarious as that of its neighbor to the south, and its unemployment rate has been second only to Oregon’s. Even before the layoffs at Boeing, revenues were falling behind predictions by $100 million in September. By December the state’s budget had a shortfall of $1.5 billion. The total budget is about $22.8 billion so this is a hefty sum. There are overruns in Medicaid, corrections, fire fighting and K-12 education amounting to about $300 million. Serious problems are expected for the remainder of fiscal 2002.
In September, Washington Governor Gary Locke directed six General Fund state agencies - among them the Department of Corrections - to prepare fifteen percent budget cuts in order to address the projected revenue shortfall. Consequently, the DOC prepared to reduce its budget by $78.8 million. Its priority, according to a Washington DOC press release, will be the imprisonment and management of violent offenders and the reduction of the supervision of non-violent offenders. The DOC proposed to eliminate the supervision of offenders for legal financial obligations such as child support as well as pre-sentencing investigations (except for sex offenders); to reduce drug offender sentences; and to speed up early release for property and drug offenses. With some exceptions, the community supervision of low and medium risk offenders would be eliminated; and prisoners in certain categories who are beyond their Earned Early Release (EER) date are expected to be released. EER for property and drug offenses will likely change from a third to a half of time of time served. The DOC also proposed the reduction of sentences for some burglary crimes and, with some exceptions, the elimination of community supervision of offenders other than sex offenders not sentenced to prison. It is estimated these measures could reduce the prison population by over 1,800 by year-end 2003 and remove 53,000 of those under outside supervision from existing caseloads. In March, the Washington House of Representatives passed (and the Governor signed) sentencing reforms for drug offenders which are expected to reduce the cost of corrections (HB 2338).
In conclusion while we are looking at the possibility of closing prisons in several states due to state budget problems, we are also facing the certainty of further severe cutbacks in education, vocational training, health care (particularly mental health care) and the quality and quantity of food served to prisoners. Cuts in outside supervision treatment, such as that provided in halfway houses, youth programs and parole and probation, are being used to justify the need to keep existing prisons and even to construct new ones. It is, a rocky path that lies ahead for those whose aim it is to end the warehousing of prisoners and to make the enforced separation of prisoners from his or her community a time for the rehabilitation and education necessary to return him or her as a productive member to that community.
This article originally appeared in the Spring 2002 issue of Justice Matters.
