The state agency may be overspending by even more, mostly as a result
of benefits granted to guards by Gov. Davis and lawmakers.
By Dan Morain
Times Staff Writer
November 1, 2003
SACRAMENTO The California Department
of Corrections is overspending its budget by more than $544 million,
and perhaps far more, largely because of pay hikes, overtime and other
benefits granted to prison guards by Gov. Gray Davis and the Legislature
In a letter submitted to the Department
of Finance, Corrections officials said the cost overrun would have
been even greater $732.6 million had they not moved
to cut other costs associated with running the nation's largest prison
system. Though the department has
overspent its budget for years, the $544.8-million deficit is the
largest ever registered by the prison system, and is believed to be
the largest deficit ever incurred by a state department.
The shortfall amounts to more than 10%
of the $5.1 billion that Davis and the Legislature earmarked earlier
this year for the state's adult prison system. By comparison, the
department incurred $140 million in unexpected costs during the previous
The department attributes the largest single
chunk $184 million to increases of nearly 7% this year
in salaries for prison officers and raises for other prison employees.
Another $168.5 million results from the department's need to increase
payments to the employees' pension fund, in part because of past stock
market declines, but also because increased salaries had added to
"Negotiated labor agreements providing
for general salary increases and increased retirement contributions
have dramatically added to the department's expenses," said the
letter, signed by Corrections Director Edward S. Alameida and delivered
to the Department of Finance on Wednesday.
Additionally, the department estimates
that it will need $87.7 million more to cover merit salary increases
in the 2003-04 fiscal year, and $52 million for unexpected overtime
costs. "This is very preliminary,"
Wendy Still, the Corrections Department's chief budget officer, said
Friday. "It is based on two months of budget data."
Finance officials are reviewing the request,
and probably will seek to pare it back. The Legislature and incoming
Gov. Arnold Schwarzenegger must decide whether to pay all or a part
of the deficit. Schwarzenegger spokesman
H.D. Palmer called the deficit "eye-popping by anyone's standards,"
and added that Corrections' budget would be "added to the platter
of ugly fiscal issues that the governor-elect is going to have to
"Overspending," Palmer said,
"was one of the reasons we found ourselves going from a $10-billion
surplus to a $38-billion deficit in five years. This is one example
of why this happened." The Davis
administration negotiated a labor package with the California Correctional
Peace Officers Assn. last year, granting roughly 28,000 members salary
increases of as much as 37% spread over the five-year life of the
contract. By 2006, prison officers are expected to be making $73,000
"These salary increases were ratified
and put into effect and the Department of Corrections wasn't funded
for them," Corrections spokeswoman Terry Thornton said Friday.
"Ask the Personnel Department; they're the ones that negotiated
the contract. Ask the Legislature; they're the ones who ratified it."
The prison guards union is one of the most
influential forces in Sacramento, in part because it is a major donor
to state political campaigns. The union contributed $1.4 million to
Davis directly and indirectly during his first term. The union gave
his 2002 reelection campaign $251,000 two months after he signed the
legislation approving their pay raise.
Unlike several other state employee unions,
the prison guards refused Davis administration efforts to renegotiate
their contract in light of state budget deficits. Lance
Corcoran, executive vice president of the union, said the officers
union was willing to work with the next governor. Maybe, he said,
it might agree to deferring future pay raises in exchange for other
"We make no apologies for success,"
Corcoran said. "We understand the state is in a dire fiscal situation.
We're willing to work with the new administration, just as we were
willing to work with the Davis administration." Only
one state legislator Sen. Tom McClintock (R-Thousand Oaks)
voted against ratifying the guards' contract last year. On
Friday, McClintock said he was not at all surprised by the latest
run-up in prison costs.
"The state prison system has simply
priced itself out of the market," he said, adding that Schwarzenegger
should consider turning some prison functions over to private enterprise.
" If he is going to fulfill
his contract with the people," McClintock said, "he has
to reduce prison costs, and an important way to do that is to contract
out to private facilities."
The union has blocked attempts to expand
the use of private prisons. The Corrections Department hopes to offset
the $544.8-million cost overrun by paring as much as $188 million
from its budget in a variety of ways, including laying off some officers
possibly 600 of the 28,000 union members. If
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