Tight Budget May Impair Rehab Program

Local officials fear that a California voter-approved program hailed as an innovative way of dealing with nonviolent drug offenders may be crippled by attempts to solve the state budget crisis.

Proposition 36, approved in November 2000, changed state law so that certain drug offenders would receive drug treatment and supervision in the community rather than being sent to jail, which is far more costly.

The ballot measure guaranteed $120 million a year in state funding until 2005-06, but Gov. Gray Davis’ proposed budget would transfer the program to the counties and increase cigarette, sales and income taxes to pay for it. County officials, who already complain the program is underfunded, argue those tax proceeds would be unreliable and could lead to severe cuts when the economy is lagging.

If that occurs, some local officials predict, many arrested for nonviolent drug offenses would receive neither treatment nor jail time, but be placed on probation, which provides minimal supervision.

“It’s an incredible concern whether we’ll be able to provide what these people need,” said Superior Court Commissioner Erick Larsh, who presides over the court program in Orange County. If counties are unable to pay, he said, “it becomes de facto [drug] legalization and undermines the whole notion of treatment.”

Anita Gore, spokeswoman for the state Department of Finance, said the governor is trying to save some crucial programs at a time when California faces a $35-billion budget gap, and disputed claims that Proposition 36 funding would be on shaky ground.

“The realignment proposal is intended to offer flexibility to the counties,” Gore said.

The governor wants to shift $8.2 billion in state programs to the counties -- including mental health and substance abuse, child and youth programs and long-term care. Davis has proposed three new revenue sources to pay for them: a 1-percentage-point increase in the state sales tax, higher income tax rates for the state’s highest wage earners and an additional $1.10-per-pack tax on cigarettes.

An association of drug treatment advocates says the plan violates the voter-approved initiative and has threatened to sue the governor.

Along with creating a $120-million trust fund, Proposition 36 required state oversight over the diversion program and an independent university study assessing the effectiveness and financial effects. Davis’ budget omitted all of those requirements, said Whitney Taylor with the Drug Policy Alliance, an advocacy group based in Sacramento.

“It’s actually completely illegal,” Taylor said. “We just wanted to make very sure from the get-go [that the governor knows] realignment of Proposition 36 is illegal, and state oversight and evaluation is imperative to the success of program. We proposed the initiative, and we’ll fight for this till the end.”

Officials in many of the state’s largest counties -- including Los Angeles, Orange, San Diego and Riverside -- fear the governor’s plan could lead to a drop in funding at a time when they are already struggling to provide treatment for eligible drug offenders.

For next year, Los Angeles County officials forecast an $8-million gap between state funding and the amount they expect to spend on treatment. However, the county plans to use leftover Proposition 36 funds from the last two years to make up the gap.

Still, Los Angeles County Supervisor Zev Yaroslavsky is worried about the future of the program: “The so-called realignment proposal that has been made by the governor is a disaster for local government. They’re shifting all the fastest-growing programs in state government to the cities and counties -- especially the counties -- but the funding sources they’re sending to local government are the slowest-growing or actually declining. It’s a prescription for disaster.”

Frank Lewis, Riverside County’s manager for substance abuse services, said state funding is expected to be $2 million below the county’s projected costs. To save money, Riverside is considering delaying treatment for drug offenders and starting a waiting list, he said.

“I’m concerned about next year, the amount of dollars that are going to be available,” Lewis said. “Obviously it’s going to be less. We’re going to have to cut somewhere, someplace.”

In Orange County, more than 4,500 people have been sent to drug rehabilitation since the program went into effect in July 2001.

Scores of them pass through Larsh’s jammed third-floor courtroom every day. Some have completed treatment and are having their charges dismissed, others have relapsed and are being given another chance, and some have either failed too many times or have committed new crimes and are being sentenced to jail.

“For the people that take advantage of it, it is a great opportunity,” he said. “It really does make a difference.”

Still, Larsh said, the program has been underfunded since it began. He would like to send most of the addicts to 90-day residential treatment, to remove them from the neighborhoods, friends and lifestyles that spawned their addictions. But the county cannot afford it.

Orange County expects to receive $8 million from the state for program costs for the next fiscal year, but costs are estimated at $12.5 million.

In the past, when the state failed to pay for mandated programs, the county had been able to make up the difference. But, like many local governments in California, Orange County is in such a fiscal crunch this year that that the Board of Supervisors has barred any county subsidies to underfunded state programs.

“I’m very concerned,” said board Chairman Tom Wilson, whose wife is a substance-abuse counselor. “I’ve been a supporter of the county’s Proposition 36 program since we got it. We have one of the best in the country, let alone the state. Unfortunately, when it doesn’t carry the finances with it, it’s not going to flourish.”

Wilson said he is worried that cutting the program will have a domino effect, increasing costs and caseloads for other social service agencies.

In 1994 the nonprofit think tank Rand Corp. prepared a study for the White House Office of National Drug Control Policy that found that every dollar spent on drug treatment saves taxpayers $7.46 in social costs down the line.

A federal study in the late 1990s also found that it costs an average of $4,300 to send someone to drug treatment, while a year of incarceration costs California an average of $26,690, according to the state Department of Corrections.

“If we lose treatment dollars, treatment will either be reduced or the level of care lowered. They will have less time in treatment,” said Sandra Fair, division manager of alcohol and drug abuse services at the Orange County Health Care Agency. “Obviously, there are impacts related to that. All the research shows the length of time you keep someone in treatment,” the more effective it is.

Fair and other local health officials have expressed concern about the governor’s plan to fund the Proposition 36 diversion programs with increased sales, income and cigarette taxes, saying those revenue sources can be unreliable.

Relying on cigarette taxes for revenue creates a paradox for the state, which has spent hundreds of millions of dollars to persuade people to quit smoking. California has the second-lowest smoking rate of any state -- 17.4%. If smoking continues to decline, however, so would the revenue from a cigarette tax.

A recent National Cancer Institute study found that for every 10% increase in the cost of cigarettes, consumption drops 3% to 5%.

The governor’s plan also faces serious political opposition. Republican lawmakers in Sacramento have vowed to oppose Davis’ call for $8.2 billion in higher taxes and are instead pushing for spending cuts.

Fair added that it’s unclear whether there would be some sort of firewall to ensure that Proposition 36 funding levels were maintained at $120 million a year, especially when those programs have to compete with other social programs funded by the same pool of tax revenue.

In February, Legislative Analyst Elizabeth G. Hill said she did not believe those tax increases would keep pace with the increased costs of those programs.