Prison System Overruns Soar

A Schwarzenegger administration official told state lawmakers Thursday there had been no system of financial accountability at the state’s troubled Department of Corrections in recent years and that cost overruns may exceed half a billion dollars this year alone.

Officials blamed those overruns on intentional under-budgeting by former Gov. Gray Davis and lax controls over spending by wardens.

“The budget became meaningless,” Department of Finance analyst James Tilton told an Assembly committee examining major issues contributing to the state’s budget woes.

Administration officials say that in the current year, they will have no choice but to absorb about $400 million in cost overruns in the Department of Corrections’ $5-billion budget.

For the budget year that begins July 1, they say they plan to hold prison spending down. They offered two major suggestions for how that could be accomplished: renegotiating the state’s contract with the prison guard’s union and putting stricter controls on spending by individual wardens.

“We have met with the wardens and we have explained in language that I don’t think could be any clearer that if next year they do not live within their budget, they will not be wardens,” said Kevin Carruth, undersecretary of the Youth and Adult Correctional Agency.

Robert Presley, who served as secretary of the agency during the Davis years, said part of the problem was that officials had lost control over overtime and sick leave because of the way the contract with the guards union was written.

Budget shortages at the end of the fiscal year can be expected “if you can’t control sick leave and overtime,” Presley said in an interview.

Presley, a veteran lawmaker before taking the job heading the parent agency of the Department of Corrections, said the Legislature must take responsibility for overseeing the prison system and examining the union contracts before ratifying them.

At the hearing, Democratic lawmakers echoed the demand for stricter budget controls.

When healthcare and education programs are being cut and local governments are threatened with loss of property taxes because of the state budget crisis, “the Department of Corrections is not going to get everything it wants or it needs,” said Assembly Budget Committee Chairman Darrell Steinberg (D-Sacramento).

The bipartisan demand for budget discipline in the state’s vast prison system marks a sharp change in the political climate in Sacramento, where for the past decade, steadily rising prison costs have gone largely unchallenged.

A combination of forces has changed the political dynamic. Lawmakers who must find billions of dollars in spending cuts in the face of the state’s deficit have become less tolerant of overspending by the Corrections Department.

At the same time, Arnold Schwarzenegger won his job without the support of the state’s powerful prison guards union, and he wants to renegotiate their contract to reduce costs.

By contrast, former Gov. Davis relied heavily on the guards for political support and backed their priorities.

Finally, years of relatively low crime rates and a leveling off of the state prison population may have made corrections spending less of a politically untouchable item.

But gaining control over the prison budget is not easy.

For years, lawmakers have known that prison officials have been overspending and still ratified costly contracts with the guards.

“We have to be culpable in this as well,” said Assemblywoman Sarah Reyes (D-Fresno), noting that lawmakers approved appropriations to cover the overspending.

“We have not told them, ‘No. You will live within your means.’ ”

Following the recall of Davis and the election of Schwarzenegger last fall, Steinberg and some Democratic lawmakers say, they are determined to identify and eliminate waste and inefficiency in government programs before making the case that a tax increase is needed to protect other programs.

Steinberg said lawmakers are shocked at this year’s projected $544-million overrun in the corrections budget and are determined to help the administration gain control of the financial management problem.

Steinberg opened the hearing by asking a pointed question: “Is there a system of fiscal accountability and management within the Department of Corrections?”

Tilton answered with a terse “No.”

When Steinberg asked whether prison wardens and other officials of the $5.3-billion-a-year system were evaluated on their fiscal performance, Tilton replied, “Obviously not.”

Tilton said administration officials had put together a plan to address management failures in the prison system. It calls for making sure that plans for operating the state’s 32 prisons actually correspond to the spending level authorized by the lawmakers.

Administration officials also promised to provide lawmakers with information about the educational background, training and experience of prison wardens and corrections officials.

Assemblyman John Dutra (D-Fremont) said management experience ought to be a requirement for prison officials.

“You can’t provide on-the-job training for senior managers,” he said.