House and Senate Subcommittee Approve FY 2014 Budgets for Corrections

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On March 19, the House and Senate Appropriations Subcommittees for the Department of Corrections approved their separate versions of the Fiscal Year 2014 budget. The Senate Subcommittee budget is nearly $9 million (0.4%) below the governor’s recommendation. The Senate Subcommittee includes $2.02 billion in total funding for the DOC in Fiscal Year 2014, a 0.1% increase over current year funding.

The budget approved by the House Subcommittee is $14.5 million (0.7%) above the Executive Budget recommendation. The House Subcommittee’s budget includes $2.04 billion in total funding for the Department of Corrections in Fiscal Year 2014, a 1.3% increase over current year funding. The governor recommended $2.03 billion for the DOC for the upcoming fiscal year, a 0.5% increase over the current year.

Of critical importance, neither budget includes the expected $24 million in savings from the expansion of Medicaid under the Affordable Care Act.

BACKGROUND

Until 2008, prison and corrections spending were growing rapidly in Michigan, consuming an increasing portion of the state’s General Fund, and preventing the state from investing in other critical priorities, including human services, higher education, and health prevention and promotion.

In Fiscal Year 1983, 5% of the state’s General Fund was dedicated to prisons and corrections; by 2013, corrections spending accounted for more than one of every five General Fund dollars (21.5%).1 At $1.9 billion, the DOC budget is the second largest General Fund budget—exceeded only by the Department of Community Health. Approximately 96% of the funding for the DOC is from state General Funds.2

After a period of growth, funding for the DOC began to taper off. Between fiscal years 2004 and 2008, DOC funding increased by 22%, from approximately $1.7 billion to $2.1 billion. Between 2008 and the current fiscal year, DOC funding fell by 3%, from approximately $2.1 billion to $2.0 billion.

Michigan’s prison population has also been declining in recent years, driven by a reduction in parole and probation violations that lead to prison returns.3 Between 1990 and 2006, the number of prisoners increased from 31,200 to 51,500, an increase of 65%. Between 2006 and 2012, the prison population dropped 15%, and the Governor and lawmakers are projecting an average population of 43,953 in Fiscal Year 2014—a slight increase over the current population of 43,600.4

 Included in the House and Senate Subcommittees are the following:

MEDICAID EXPANSION

Governor: The governor’s budget includes 100% federal funds to support the expansion of Medicaid coverage to low-income individuals up to 133% of the federal poverty level. This influx of federal revenue would increase total Medicaid funding to $12.3 billion, and result in savings in the state’s General Fund of $206 million by allowing the state to use federal funds to provide comprehensive services.5

The Medicaid expansion would cover some health care services for an estimated 80% of prisoners and parolees under the jurisdiction of the Department of Corrections, with expected savings in the DOC budget of $24.2 million. Although inmates do not qualify for Medicaid while incarcerated, offsite inpatient hospitalizations would qualify for reimbursements, as would substance abuse, mental health and sex offender treatment for parolees in the process of re-entry back into the community. Access to basic and preventive health and mental health services is a critical component of a successful transition back into the community and helps to lower recidivism rates. Unfortunately such access is currently limited, resulting in greater overall costs when parolees seek treatment in hospital emergency rooms.

State spending for prisoner health care and mental health services increased significantly between fiscal years 1998 and 2012, from $162.1 million to $291.1 million, an increase of 80%. During that period, the average cost per prisoner increased for health and mental health services from $3,831 to $6,685. One probable factor in the rise in prisoner health care costs is the aging of the prison population. In 1994, only 22.3% of prisoners in Michigan were over 40 years of age; by 2009, the percentage increased to 42%, with 17% over age 50.6

Senate Subcommittee: The Senate Subcommittee, reflecting the rejection so far by the Legislature of a Medicaid expansion in Michigan, did not accept the Governor’s recommendation to expand Medicaid coverage to the estimated 49,500 prisoners and parolees who would qualify, and removed his projected savings of $24.2 million.

House Subcommittee: The House Subcommittee also rejected the Governor’s recommendation to incorporate budget savings resulting from expanded Medicaid coverage for eligible prisoners and parolees.

EMPLOYEE TRAINING SCHOOL

Governor: The governor recommended a one-time increase of $9.03 million to train 400 additional corrections officers to meet staffing needs, bringing total spending in Fiscal Year 2014 to approximately $18 million, more than twice current year spending. Funds for this program cover a range of expenses associated with the training of new officers, including salary and payroll costs for new officers during their training period, uniforms and training materials.

Senate Subcommittee: The Senate Subcommittee included a total increase of $1.8 million for training, bringing funding to $10.5 million. The Senate debate focused in part on efforts to transition some new employee training to universities and colleges.

House Subcommittee: The House Subcommittee rejected the Governor’s recommendation.

PRISONER RE-ENTRY AND COMMUNITY SUPPORT

Governor: The governor’s budget reduces funding for two prison re-entry and community support programs, while retaining current funding for his public safety initiative:

  • Prisoner re-entry local services providers: The governor reduces funding for local services providers from $22.7 million in the current year, to $13.8 million in 2014. Funds are currently available for 18 regional prisoner re-entry service providers responsible for assisting prisoners in transitioning back into their local communities after release from incarceration. Included are transitional housing support; employment training and education programs; transportation and family support services, including assistance with accessing public assistance and other services; and substance abuse and mental health services.
  • Prisoner re-entry DOC programs: The governor reduces funding for DOC prisoner re-entry programs from $23.5 million to $9.7 million. Funds are used for services within prisons, including risk and needs assessments, programs to reduce offender risk, and the preparation of re-entry plans. Funds are also used for a re-entry project for offenders with special needs (medically fragile, youthful offenders or those with mental health issues), and community-based sex offender treatment programs.
  • Public safety initiative: The governor provides continuation funding ($4.75 million) for a portion of the public safety initiative he outlined in his special message to the Legislature on public safety. This funding is used by distressed communities in high-crime areas to purchase jail space in neighboring counties to avoid backlogs.

Senate and House Subcommittees:

  • Prison re-entry programs: The Senate and House Subcommittees provided $12.9 million for DOC prisoner re-entry programs (up from the governor’s recommendation of $9.7 million), and $14.2 million for prisoner re-entry local service providers (up from the governor’s recommendation of $13.8 million).
  • Public safety initiative: The House Subcommittee reduced funding for the initiative by $250,000, to a total of $4.5 million. The Senate Subcommittee reduced funding by $2.5 million, to total funding of $2.25 million.

Governor: The governor made no major changes in DOC food services, but recognized agreements with the Department of Human Services to cover food service at Maxey/Green Oaks Center, and with the Department of Community Health for food service at the DCH Forensic Center.

Senate Subcommittee: Following Subcommittee discussions regarding the DOC’s decisions to not accept bids from private companies to provide some services, the Senate Subcommittee cut $2.2 million GF from food services.

House Subcommittee: The House Subcommittee concurred with the Governor.

ENDNOTES:

1. The Michigan Prison System: Basic Facts, Citizens Alliance on Prisons & Public Spending (3/27/12), and Bob Schneider, Corrections Share of State GF/GP, Corrections Background Briefing, House Fiscal Agency (December  2012).
2. Bob Schneider, Corrections Funding Sources, Corrections Background Briefing, House Fiscal Agency (December 2012).
3. Bob Schneider, Michigan’s Prison and Camp Population, Corrections Background Briefing, House Fiscal Agency (December 2012).
4. Government of Michigan, Executive Budget Recommendation for Fiscal Years 2014 and 2015, Moving Michigan Forward – Continuing Our Comeback.
5. Ellen Jeffries, Department of Community Health Recommendations, Overview of Governor Snyder’s FY 2013-14 Budget, Senate Fiscal Agency (February 13, 2012).
6. Bob Schneider, Prisoner Health Care and Mental Health and Average Cost Per Prisoner and Prisoner Age Distribution and Health Care, Corrections Background Briefing, House Fiscal Agency (December 2012).