Savings in Recently Passed Budget Bill Lower Than Claimed

A budget measure on Gov. Arnold Schwarzenegger’s desk that purports to save the state $2.3 billion likely saves far less – perhaps only half as much.

The bill, ABX8 2, predicts savings of nearly $1 billion by changing the way health care is delivered to California’s 167,000 prison inmates — $811 million – and commuting the sentence and then deporting illegal immigrant inmates, $182 million.

The Schwarzenegger administration has already said the $182 million is illusory.

After examining the number of illegal immigrant prisoners eligible – those with non-violent, non-sexual, non-serious offenses – the administration scaled back the estimated savings generated by the proposal to $6 million this year and $12 million in the fiscal year that begins July 1.

“We revised the estimate down after a case-by-case check showed a much smaller pool of inmates with immigration holds eligible for the program,” said H.D. Palmer, a spokesman for Schwarzenegger’s Department of Finance.

The $6 million in savings is 250 cases. The $12 million is 600, Palmer said.

Clark Kelso, the federal receiver charged with improving health care for California’s 33 heavily overcrowded prisons, said February 26 that Schwarzenegger’s estimate of $811 million is not an “unrealistic figure.”

But Kelso never said the Schwarzenegger administration’s estimate of savings would be generated by a variety of cost containment measures such as managed care and greater use of telemedicine – diagnosing and prescribing treatment by video or telephone.

“The governor’s budget has given me a very big challenge,” Kelso told reporters on a conference call. “Is it a realistic figure? I’ll give a half answer: It’s not an unrealistic figure.”

Schwarzenegger arrived at the $811 million by assuming California would lower its spending on inmate health care to that of New York — $5,757 per person.

Kelso said he supported the governor’s proposal.

“We should be getting our costs in line with prison health care costs in comparable jurisdictions. I agree completely with the governor’s sentiment there.”

But he repeatedly referred to the $811 million as a “target” and noted that the prisons would need to create better information technology to more efficiently treat inmates.

Kelso also acknowledged that it was “an unusual budget profile” to have the governor give the receiver an additional $519 million in the current budget year and an additional $532 million for the fiscal year that begins July 1 while also expecting $811 million in savings.

Also included in the budget bill is $450 million by reducing personnel costs in state departments. Doing so, the bill claims, would generate an additional $130 million in equipment and expenses savings.

Numerous times, state budgets have contained 5 percent or 10 percent across-the-board cuts in departmental spending. In most instances, the “savings” occurs on paper as unfilled job slots are left empty and then count as part of the salary savings.

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