State officials rehear updates to SB 678 community corrections funding formula

The Senate Budget Subcommittee No. 5 on Corrections heard administration and analyst testimony May (date not specified) on proposed updates to SB 678, the Community Corrections Performance Incentive Act of 2009, a state statute that provides incentive funding to county probation departments intended to reduce state prison admissions.

The administration, represented by Justin Adelman of the Department of Finance, told the committee it is proposing a set of methodology changes that would (1) create a stable maintenance payment in the baseline component of the formula, (2) revise the incentive calculation to use per‑person incarceration costs and multi‑year averages rather than outdated contract bed rates and single‑year lookbacks, and (3) retain an existing $200,000 minimum county payment for jurisdictions that submit required data but otherwise receive no award.

Those recommendations were met with questions from committee members and alternative recommendations from the Legislative Analyst's Office (LAO). "We were reproposing and this is a rehearing on SB 678 methodology updates," Justin Adelman said in his opening remarks, noting the formula still rests on three components and that the administration seeks greater stability for county budgeting.

Why it matters

SB 678 distributes state dollars intended to support county probation practices that reduce returns to prison. The formula governs tens of millions of dollars in annual funding and affects how counties budget for supervision, treatment and other evidence‑based programs. Changes to the formula can shift state savings and local program incentives.

What the administration proposed

- Baseline/maintenance payment: Create a predictable maintenance payment for the baseline component so counties receive a more stable share year to year rather than large swings tied to small performance changes. - Incentive payment: Replace reliance on historical contract bed rates with an updated per‑person cost estimate for incarceration/parole, use a multi‑year baseline instead of a single prior year, and smooth volatility that currently penalizes persistently successful counties. - Minimum guarantee: Preserve an existing $200,000 minimum payment for counties that submit required Judicial Council data but otherwise would not qualify.

Adelman said the administration built the maintenance payment "in conjunction with the chief probation officers of California" and described it as designed to make contracting and service delivery more stable.

LAO recommendations and oversight proposals

Orlando Sanchez of the Legislative Analyst's Office recommended several changes that differ from the administration's package. He urged excluding 2021 data from baselines because pandemic disruptions distorted revocation rates, recommended using marginal rather than average incarceration costs to better reflect state savings from one fewer incarceration, and urged accounting for the share of people who are released without parole. Sanchez also proposed directing the Board of State and Community Corrections to convene experts to identify specific evidence‑based practices and to build a funding approach that directly supports those practices rather than preserving a broad minimum guarantee. He recommended rejecting the governor's proposed minimum guarantee, saying it decouples performance from awards.

"We recommend using a marginal cost instead of an average cost to incarcerate and supervise people on parole as this better captures how much the state actually generates in savings from one fewer person," Orlando Sanchez told the committee.

Questions from members

Committee members pressed both sides on whether the proposed changes would provide probation departments the resources they need. Senator Sciardo asked whether the formula is focused on counting metrics rather than ensuring counties can "do the job right." Adelman replied the statutory formula under current statute would provide about $140 million annually based on the administration's budget figures but that the administration proposed smaller, steadier allocations tied to stability rather than volatile year‑to‑year swings.

Clarifying details from witnesses and staff

- Historical baseline: The original methodology compared county revocation performance to a historic 7.9% revocation rate used when the program was established. - Recent revocation rates: Under freezes in recent years, statewide revocation rates reported by the Department of Finance were about 3.17% (freeze years) versus around 3.37% pre‑COVID, the department said. - Minimum payment: A $200,000 minimum would remain in the administration's proposal. - LAO concerns: The LAO recommended excluding 2021 data from baselines and recommended stronger state oversight (audits and BSCC role) rather than a flat minimum guarantee.

Discussion vs. decision

The hearing was a policy discussion and oversight hearing; there was no committee vote or statutory change enacted during the session. Lawmakers asked for additional information on cost estimates and how to ensure funds support evidence‑based practices rather than merely supplementing existing county staffing.

What comes next

Members asked the administration and LAO to supply additional cost and implementation detail. The committee signaled interest in stronger oversight measures, including auditing and BSCC involvement, if the legislature adopts a maintenance payment approach.

Ending

Witnesses emphasized tradeoffs between predictability for counties and maintaining performance incentives. The LAO urged a program redesign that ties state dollars more directly to evidence‑based practices and audits of local compliance; the administration emphasized stability and support for probation departments that helped reduce revocations in recent years.

Speakers quoted in this article are listed in the accompanying speaker roster below.