Subcommittee hears administration and LAO proposals to modify SB 678 community corrections incentive formula

Orlando Sanchez Zavala and Drew Soderberg of the Legislative Analyst's Office and Justin Edelman and Tess Shirkenbeck from the Department of Finance briefed the Assembly Budget Subcommittee No. 6 on the governor's trailer-bill proposal to revise the SB 678 community corrections performance incentive formula.

Orlando Sanchez (LAO) described the original program's goals—reducing returns from community supervision to prison, producing state savings, and improving public safety—and noted the formula has been repeatedly modified since its 2009 inception. He said the current "modified formula" was held during the COVID-19 pandemic and will resume absent legislative change.

Justin Edelman (Department of Finance) said the administration proposes a maintenance payment equal to about 80% of the proposed formula (roughly $103 million) to stabilize county funding and a performance component that compares counties to a new baseline (years 2021–2023). He explained the maintenance payment is intended to avoid year-to-year volatility that can penalize counties that perform well.

The LAO and other witnesses raised technical objections. Drew Soderborg (LAO) recommended excluding pandemic-affected 2021 from the baseline (using 2022–2023), urged use of marginal rather than average prison-cost estimates for the state's avoided-cost calculation, and opposed the administration’s proposed growth component tied to realignment revenues. LAO recommended giving BSCC a stronger oversight and audit role to ensure funds support evidence-based practices and suggested rejecting a minimum guarantee that would bump small counties to $200,000 because it decouples awards from performance.

Department of Finance, Judicial Council representatives, and the LAO debated which entity is best positioned to monitor counties' use of evidence-based practices. Francine Byrne of the Judicial Council described a validated assessment tool used for evaluating local probation practices and said the council is restarting site visits in July.

Why it matters: SB 678 grants are designed to reduce state prison admissions by incentivizing counties to implement effective community supervision practices. Changes to the formula affect county budgets and the incentives counties face to adopt or maintain programs.

Next steps: Witnesses said they were open to continued discussions on baseline years, marginal cost methodology, and reporting/oversight. The subcommittee did not take a formal vote during the hearing.