Legislative Analyst

SACRAMENTO, February 21– The Legislative Analyst’s Office today recommended the Legislature reject Governor Schwarzenegger’s proposal to cut funding to Proposition 36, California’s voter-approved, treatment-instead-of-incarceration law. The Drug Policy Alliance welcomed the LAO report, which acknowledges that the governor’s plan would undermine the cost-effective program and could lead to legal conflicts.

Margaret Dooley, Prop. 36 statewide coordinator for the Drug Policy Alliance, said, “The LAO report confirms what we have been saying since the governor released his January budget proposal. Cutting funding to Prop. 36, which has graduated over 60,000 people and saved the state over $1 billion, serves neither taxpayers nor people suffering from substance abuse problems in this state. The evidence shows that we all benefit when we provide life-saving drug treatment services to people caught up in the criminal justice system. In California today that is an especially critical point.”

Last year, the Legislature approved $145 million in total for Prop. 36-related programs, but the governor proposes only $120 million for Prop. 36 drug treatment in 2007-08. The governor has also recommended channeling all funding through a one-year-old fund called the Substance Abuse Offender Treatment Program (OTP), which requires county funding matches before state money can be distributed.

The LAO recommends the Legislature reject both parts of the governor’s plan: cutting $25 million from Prop. 36 drug treatment services and making distribution of all Prop. 36 funds dependent on county matching.

The LAO report reads, “Our concern is that reducing funding below the 2005-06 level of $145 million would probably eventually result in increased prison costs at least proportional to the amount of any reduction.” The LAO has estimated that the state’s $120 million annual investment in Prop. 36 resulted in net savings of $205 million in 2002-03 and $297 million in 2004-05.

The LAO also recommends the Legislature oppose new county-matching requirements based on legal grounds, saying “we note that funding Proposition 36 programs through OTP and providing no funding for [the Prop. 36 trust fund] may be open to legal challenges.”

Dave Fratello, co-author of Prop. 36, said, “The governor proposes zero funding for Prop. 36 treatment programs if counties don’t put up money, too. This sets the stage for endless conflicts. Counties will challenge the requirement, and we could see lawsuits by drug offenders, too, if appropriate treatment turns out to be unavailable.”

About the Prop. 36 Budget Figures

For five years (FY 2001-02 through FY 2005-06), Prop. 36 was guaranteed funding of $120 million per year from the state general fund. Counties actually spent $143 million to implement Prop. 36 in FY 2005-06, according to the Legislative Analyst’s Office, which was possible because some counties had carried forward money from earlier years with fewer clients.

Last year was the first in which legislators set the Prop. 36 program’s budget. The legislature approved $120 million for the main Prop. 36 fund, and $25 million in supplementary funds under the auspices of the OTP program.

A simple adjustment for inflation, using statistical methods employed by the Department of Finance, would call for a Prop. 36 budget of at least $152.4 million to match the dollar value of the program’s first-year funding. By this measure, the governor’s newest proposal is at least $32.4 million short of the amount first allocated for Prop. 36.

According to a recent survey by the Coalition of Alcohol and Drug Associations, Prop. 36 needs at least $209.3 million to “adequately address the treatment needs.” The Governor’s proposed funding for Prop. 36 falls almost $90 million short of that target, which would allow counties to better meet the range of needs in treatment, support services and criminal justice supervision for the over 36,000 clients enrolling in Prop. 36 programs each year.

Prop. 36 Generates Savings

Analyses conducted by researchers at the University of California at Los Angeles show that for every $1 invested in Prop. 36, the state saves $2.50. For program completers, every $1 invested leads to $4 in savings. In the program’s first five years, taxpayer savings reached $1.3 billion, according to figures from the Justice Policy Institute. A recent UCLA analysis on Prop. 36 cost savings showed that the state enjoys 93% of the savings from Prop. 36, with counties receiving the remaining 7%.

Prop. 36 Background

Prop. 36 was approved by 61 percent of voters in November 2000. A June 2004 poll by the Field Institute showed support for the law at 73 percent. Nearly 12,000 people have successfully completed substance treatment during each year of Prop. 36’s existence, putting the program on track to graduate 72,000 Californians in its first six years.

The LAO recommendations on Prop. 36 are online here.

For more information on Prop. 36, visit www.prop36.org.