Under Democratic Gov. Jerry Brown’s leadership, the state of California has finally made some progress in getting its fiscal house in order, at least as far as on-balance-sheet items are concerned. After Gov. Gray Davis, a Democrat, was recalled and GOP Gov. Arnold Schwarzenegger accomplished little to nothing in keeping spending under control or raising revenue, California is now running surpluses even without raiding public school coffers and special funds. In a remarkable turnaround for a state that looked ungovernable only a few years ago, California is preparing to pay off loans and set up a state reserve fund, a veritable lockbox to make it through hard times. It took major tax hikes to get to this point, and massive unfunded liabilities still loom over the state’s future, but things are undoubtedly looking better than they did a few years ago.
One of the measures taken as a part of this reform effort was Assembly Bill 109, a law shifting responsibility for low-level criminals from the state prison system to county jails, where individuals convicted of nonserious, nonviolent or nonsex offenses will now serve their time. Why was this move necessary? In 2011, the Supreme Court confirmed an order by a panel of three judges empowered by the Prison Litigation Reform Act of 1995 that forced California to deal with the staggering overcrowding in its state prison system. There are two ways to do that: build more prisons, or have fewer prisoners. California spends some $10 billion a year – 9 of its total budget – on corrections and rehabilitation as it is. Building even more capacity when you are trying to close your deficit is not a particularly attractive option financially. Releasing criminals on a large scale, on the other hand is not a particularly attractive option politically, so the option you’re left with is moving prisoners from state prisons to other jails.
Now, a couple of years into this experiment, efforts to evaluate the impact of this prison reform have started. A report by researchers at Stanford Law School shows that different stakeholders view the impact the reform has had through starkly different lenses, but one thing seems clear: Local jails now face more overcrowding problems than before and local law enforcement is much more directly confronted with the cost of imprisoning arrestees. How would we expect this to affect their behavior? Well, blessed as we are we can infer the likely consequences of this reform from a new research paper about a reform program in Israel that was basically the exact reverse of the California experiment.
In the paper, which is forthcoming in the Journal of Public Economics, Itai Ater of Tel-Aviv University, Yehonatan Givati of Hebrew University, and Oren Rigbi of Ben-Gurion University look at the impact on arrests and crime of a reorganization of prisons around Israel. Between April 2007 and January 2008, control over jails was transferred from the Police to the Prison Authority, a separate agency within the Ministry of Public Security. Police officers who manned the jails and budgets associated with the jails also became the responsibility of the Prison Authority. This transfer took place gradually, region by region, which allows the researchers to separate different arrest and crime trends over time from the impact of the reform. What they find is the following: Once police departments no longer bore responsibility for arrestees’ room and board, arrests went up, by about 11 percent. Arrestees were also held for longer periods of time, even though the newly added captives were arrested for less serious crimes (with a maximum possible sentence that was 60 percent shorter). With less pressure on their budgets, police departments started arresting not just people who were suspected of lesser crimes, they also started arresting people who were less likely to be charged at all. But some of the new arrests did target the right people, and reported crime dropped by 4 percent after the reform.
What does this suggest for California? Remember that in California, control over prisons was shifted in the opposite direction, closer to local law enforcement. Under the same logic of organizational boundaries and responsibilities we saw materialize in Israel, one would expect the shift to lead to fewer arrests, especially of less violent and dangerous criminals. This would ultimately reduce budgetary pressures, but it would also likely lead to an increase in crime – a tough trade-off and not one that suggests delicious free lunches all over the place.