Criminal Justice Reforms Can Save States Money — But Do States Know How Much?

January 11, 2012 at 4:20 pm

Corrections spending is absorbing a growing share of states’ budgets (see map), leaving less for education, health care, and other priorities.  Some states have adopted criminal justice reforms that reduce costs while protecting public safety — offering effective addiction treatment to more people convicted of drug-related crimes instead of incarcerating them, for example, or imposing sanctions other than prison time for people who miss meetings with their parole officer.

Corrections Spending Has Grown as a Share of States Budgets More states might implement these reforms if lawmakers had a rigorous assessment of the likely impact on the state budget, such as expected cost savings.  Unfortunately, many states do a poor job of producing this vital assessment (called a “fiscal note”), as a new report from CBPP and the ACLU explains.

We examined more than 600 significant bills on adult sentencing and corrections policy that 49 states have enacted in the past three years and found that:

  • States did not write fiscal notes for about 40 percent of them. Without an official certification that a bill would save money, lawmakers may have less incentive to vote for it.
  • Most states failed to examine the bill’s fiscal impacts beyond a year or two. Some effective reforms, including certain drug and mental health treatment programs, require modest startup costs but reduce future prison spending significantly.  Lawmakers need to be aware of these long-term benefits.
  • About 15 percent of fiscal notes did not estimate a budgetary impact or indicated only that the impact was positive or negative. While some of these notes contained some useful information, they failed to accomplish the primary goal of a fiscal note:  to provide the best possible estimate of the bill’s impact on the state budget.
  • Few states’ fiscal notes explain their methodology. Without an understanding of the method used to determine a bill’s cost or savings, lawmakers and the public can’t evaluate the accuracy of fiscal notes, reducing their credibility and usefulness.
  • Some states do little to ensure the credibility of their fiscal notes. In some states, executive branch agencies produce fiscal notes with no review by nonpartisan analysts. Lawmakers must believe that fiscal notes are credible before they can rely on them when deciding how to vote.

A few states, including Texas and Washington, produce fiscal notes that meet high standards.  Our analysis describes the best practices in this area.  To achieve them, many states may need to invest more resources in their fiscal note process, for example by hiring more professional research staff and upgrading the data available to them.  But investing in good fiscal notes is far less costly than enacting or maintaining criminal justice policies that require more prison spending.

The Facts on SNAP

January 10, 2012 at 11:05 am

We have updated two papers that provide background information on SNAP (the Supplemental Nutrition Assistance Program, formerly the Food Stamp Program), the nation’s most important anti-hunger program.

  • Policy Basics:  Introduction to SNAP.  In 2011, SNAP helped almost 45 million low-income Americans to afford a nutritionally adequate diet in a typical month.  Nearly 75 percent of SNAP participants are in families with children; more than one-quarter are in households with seniors or people with disabilities.  While SNAP’s fundamental purpose is to help low-income families, the elderly, and people with disabilities afford an adequate diet and avoid hardship, it promotes other goals as well, such as reducing poverty, supporting and encouraging work, protecting the overall economy from risk, and promoting healthy eating.
  • SNAP Is Effective and Efficient.  SNAP caseloads have risen significantly since late 2007, as the recession and lagging recovery battered the economic circumstances of millions of Americans and dramatically increased the number of low-income households who qualify and apply for help from the program.  Yet, despite the rapid caseload growth, SNAP payment accuracy has continued to improve, reaching all-time highs (see graph).  Moreover, the Congressional Budget Office predicts that SNAP spending will fall as a share of the economy in coming years as the economy recovers and temporary benefit expansions that Congress enacted in 2009 expire.

Long and Uncertain Recovery for State Budgets

January 9, 2012 at 2:36 pm

Our latest update on state budget shortfalls shows that states continue to face a long and uncertain recovery.

The report finds that:

  • States’ budget challenges remain considerable. Twenty-nine states have projected or have addressed budget gaps totaling $44 billion for fiscal year 2013, which begins July 1 in most states.  (See map.)  This number is almost certain to grow as governors release new gap projections along with their budgets in the coming months.  States will have to close these gaps before the fiscal year begins, since nearly every state is required to balance its budget.  (These 29 states include some states with two-year budget cycles ending in fiscal year 2013, most of which have already closed their projected 2013 shortfalls through spending cuts and other measures scheduled to take effect next year.)
  • State finances are recovering, but slowly. Shortfalls are generally smaller than in previous years.  But they remain large by historical standards, as the economy continues to be weak and unemployment is still high.

Revenues remain below the amount needed to sustain services like education and public safety, in part because states are coming out of such a deep hole.  State revenues plunged as a result of the recession, and, while they are now growing again, it would take years of growth at the current rate to maintain services at anywhere near pre-recession levels, as my colleague Elizabeth McNichol has pointed out.

Moreover, states are facing serious headwinds that will slow their recovery.  Emergency federal aid to states has largely expired, and large cuts in federal spending scheduled for coming years will likely affect ongoing federal funding for states and localities.  Growth in the broader economy has been sluggish, as well.

Given these challenges, states should take a balanced approach as they prepare their budgets for the coming year — one that draws on reserves (in states that have them) and raises additional revenue, rather than relying on cuts alone.

The budget that California governor Jerry Brown proposed last week provides a good example:  while it makes $4.2 billion in cuts to Temporary Assistance for Needy Families (TANF), Medicaid, and a host of other programs, it also raises $4.7 billion in additional revenue, primarily by creating new income tax rates for very high earners and raising the sales tax rate by half a percentage point.  As Governor Brown recognized, a cuts-only approach would deepen the already severe cuts that states have made over the last several years to services that are critical to states’ economic futures, like K-12 education.

In Case You Missed It…

January 6, 2012 at 5:44 pm

This week on Off the Charts, we discussed the federal budget and taxes, the economy, state budgets, and income inequality.

  • On the federal budget and taxes, Robert Greenstein warned that a potential provision of an upcoming payroll tax bill would deny unemployment benefits to hundreds of thousands of workers.  We pointed to our new report showing that the tight annual funding limits scheduled for 2013-2021 will squeeze non-defense appropriations even more than defense, and Chuck Marr explained that Mitt Romney’s tax plan would worsen both deficits and inequality.
  • On the economy, Chad Stone outlined the implications of the December jobs report, highlighting our updated chart book.
  • On state budgets, Michael Leachman tallied the continuing decline in state and local public employment resulting from the recession.  Also, as state policymakers look ahead to fiscal year 2013, we highlighted two CBPP reports showing the cuts in education and other public services that states are implementing this year.
  • On income inequality, Hannah Shaw discussed a new Congressional Research Service report finding that income growth at the top far outpaced growth elsewhere on the income ladder between 1996 and 2006.

In other news, we released reports on coming reductions in funding for defense and non-defense programs and a proposal to deny unemployment insurance to less-educated workers, as well as a statement on the December jobs report.

Local Government Job Losses Continue

January 6, 2012 at 5:37 pm

Local governments cut 14,000 jobs last month, today’s Labor Department report finds, the 34th month out of the last 41 in which total state and local employment shrank.  (State employment was flat in December.)  States and localities have cut 656,000 jobs since employment peaked in August 2008.

Local Government Job Losses Continue

The job cuts, which states and localities are imposing to help close their budget gaps, have been widespread.  Since the recession started in December 2007, state and local governments have cut a net 464,000 jobs.  They include:

  • Local school districts have cut 214,000 positions.
  • Cities, counties, and other local governments have cut 188,000 jobs.
  • State governments have cut 62,000 jobs.

These job losses have happened at a time when demand for the services that state and local governments provide has risen sharply.  For example, an estimated 5.6 million more people will be eligible for Medicaid in 2012 than were enrolled in 2008, mainly because so many families lost their health insurance when they lost their jobs.  And states expect to have 350,000 more public school students and 1.7 million more public college and university students in the school year that starts later this year than they did when the recession began.  The numbers of senior citizens, young children, and unemployed individuals — three groups that tend to use more public services — also have grown.

Given the labor-intensive nature of most public services — teaching, policing, firefighting, and the like — it’s hard to see how governments can continue to cut so many workers without seriously harming the quality of life of the communities they serve.