Major Changes to trial court funding statutes! Reforms favored by the Alliance of California Judges to become law!

Posted on June 28, 2012

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June 27, 2012

Dear Members and Others:

Today the Legislature enacted major reforms to the trial court funding statutes long advocated by the Alliance of California Judges.  We are gratified that the Legislature has heard our voice and thank legislative leaders and all who assisted in bringing about this result for recognizing the need for change and making it a reality.

The Legislature has agreed with the Alliance that all Trial Court Trust Funds not legislatively authorized for use by the AOC should be allocated to the trial courts, and not held in reserve, or disposed of at the discretion of the Judicial Council without trial court authorization.

Based upon new provisions of Government Code section 68085, the AOC may no longer spend money from the TCTF based upon the implied “consent” of the participating courts, as they did to fund the CCMS project, but must now have the “authorization” of the courts. This new provision is effective immediately. This means that the AOC must now seek the express authority of affected courts before spending any money from the Trial Court Trust Fund if the AOC proposes not to allocate it directly to the trial courts unless that money has been specifically appropriated by the Legislature. The Judicial Council and the AOC are prohibited from taking any money from the TCTF for any statewide or general expenditure, if it would otherwise reduce the allocation of funds to any courts, without the express authorization of the courts or Legislature.

Expenditures for CCMS V4 and for new deployments of any version of CCMS are expressly and immediately prohibited.

Additional beneficial changes will also soon take effect.

Beginning on January 1, 2013, a new provision of section 68085 will read as follows:

(p) Nothing in this section or any other provision of law shall be construed to authorize the Judicial Council to redirect funds from the Trial Court Trust Fund for any purpose other than for allocation to trial courts or as otherwise specifically appropriated by statute. 

This repeals the AOC’s authority under Government Code section 68085 to reimburse itself from general trial court operating funds without authorization of all affected courts, and requires that 100% of TCTF money not expressly and legislatively authorized for other purposes be allocated to the trial courts. Any direct services by the AOC to the trial courts now requires a specific appropriation by the Legislature and the AOC must report these expenditures quarterly.  The January 1, 2013 version of the statute will also retain the total ban on CCMS V4 and deployment spending.

The Legislature has also decided to severely cut the AOC budget. As a result of the AOC’s share of branch ongoing reductions, and an additional cut imposed by the Legislature, it appears that the AOC budget is being reduced over one-third. This assumes that $4.0 million in additional reductions imposed by the Legislature will likely be funded from AOC operations. Furthermore, fifteen million is being cut from the AOC budget to mitigate reductions to the trial courts.

As expected, the budget provides for an ongoing reduction from prior years of $350 million. However, rather than leave this amount unallocated and left to Judicial Council discretion, the Legislature has adopted the Alliance position that the reduction be allocated directly in the budget.

The Governor’s proposal to eliminate trial court fund balances, so called “reserves,” has been mitigated somewhat. The Legislature has taken away the Judicial Council’s discretion over trial court reserves and has now expressly granted the right of the trial courts to maintain reserves for two years. After June 30, 2014, that authority is repealed, and trial courts will only be allowed to maintain a reserve up to 1% of their total budget. A 2% reserve will be retained at the state level with 1.5% to be distributed for hardships by August 31, and .5% to be held back for emergencies until March 15.  After that, any remaining amounts will be allocated to trial courts based on past allocation methodology.

The budget document is a difficult read. Our view of the final budget numbers follows.

The budget provides for past and future ongoing cuts to the Judicial Branch, as well as very significant one time cuts.

The previous reductions total approximately $650 million. Of this amount, the stated plan is to provide for ongoing mitigation of $300 million, and for $350 million to be permanently “operationalized” by the branch.

The $300 million will be mitigated as follows:

SB 1732 Construction Funds -$59.5
Terminate CCMS -46.0
Redirection from Modernization Fund -27.2
Deloitte Cash Credit -16.0
New Civil Fees (3 year sunset) -50.0
Misc. -1.3
       Total -200.0

This leaves $100 million as an impact to the trial courts both for this year and ongoing.

An additional $350 million will be operationalized as reflected in the following figures, which means the trial courts will absorb an additional permanent $214 million reduction.

State Judiciary -47.1
2009 Fee Changes -6.4
2010 Fee Changes -64.0
Security Savings -17.0
Other State Trial Court Funding Programs* -1.4
Trial Court Reductions -214.1
       Total -350.0

*This amount increases to $12.6 million beginning 2012- 2013 providing additional relief to trial court reductions.

As expected from the May Revise, the budget also provides for an additional $544 million of cuts to the trial courts. $240 million will be redirected from SB 1407 construction funds to mitigate this cut. The AOC will be expected to absorb or find an additional $4.0 million from sources within state operations other than trial court funding, such as their own budget, or the Supreme Court, Courts of Appeal, Judicial Branch Facility Program, or the Habeas Corpus Resource Center. In addition, fifteen million is being redirected from the AOC budget to offset local court cuts, leaving $285 million in cuts to be absorbed this year by the trial courts, rather than the $300 million originally proposed in the May Revise.

After this fiscal year, there will be an ongoing $121 million cut to the trial courts, which will be mitigated by a permanent transfer of $50.0 million from the Immediate and Critical Needs Account (the “1407” construction funds).

With some adjustments not detailed here, the bottom line is that the trial courts will suffer a $285 million one time reduction and a $331 million ongoing reduction for FY 2012- 2013, to be followed by a permanent ongoing reduction of $496 million for FY 2013- 2014 and thereafter.

Finally, the following provisions are enacted:

  • The Trial Court Improvement Fund and the Judicial Administration Efficiency and Modernization Fund are consolidated into a single statewide fund to support trial court projects. This will make the accounting of this money much more transparent.
  • $7 million in CCMS system evaluation funding is eliminated. This is a strong policy statement by those that control the purse strings that no more money be spent on CCMS period.
  • Excess funding for assigned judges, if available, is directed to trial court operations and courts are encouraged to use sitting judges when available rather than assigned judges.
  • Creates a $30 fee for court reporter services under an hour.
  • Adopts a 20% increase to appellate first filing fees to offset cuts to the Supreme Court and Courts of Appeal.

This budget requires the judges of this state to face a new reality. Every judge must recognize that we are all called upon to exercise our independent constitutional responsibility to decide the funding priorities of the local courts and to recognize that we are independent constitutional trial courts. A new model of trial court cooperation and communication is now necessary. We cannot act as if we are dependent upon only a chosen few. The Alliance will continue to strive toward democratic governance of the judicial branch, and continue to work for additional funding changes reflecting our philosophy that judges, not bureaucrats, should determine the future direction of the judiciary.

Directors, Alliance of California Judges

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Congratulations to the Judges and Justices of the Alliance of California Judges – and Yen Interactive Media on a bitterly fought victory.

Our work is not yet finished….