BATTLE LOOMS OVER PRISON SPENDING IN STATE BUDGET

SACRAMENTO -- Facing a historic fiscal crisis, California Gov. Gray Davis
is calling for deep cuts to schools, health care for the poor and scores of
other programs. But one corner of government is being spared such pain: the
state's sprawling prison system.

Davis, a Democrat who treasures his law-and-order image, actually wants to
boost Department of Corrections spending in the coming year, though
modestly. The governor proposes opening a new prison, building a
$160-million department headquarters and remodeling San Quentin's
deteriorating death row.

Critics are angry about what they see as an inequity, and a state Senate
subcommittee will meet today to begin paring back the $5.2-billion prison
budget. But many analysts say the only way to make meaningful cuts is to do
what has been politically unthinkable in California for a quarter of a
century: Put more felons back on the street.

Some other hard-pressed states have begun to do just that, permitting some
lightweight offenders to go free before their terms are up. Davis, however,
views such steps as perilous and is unwilling to take them.

"If people can find other reductions that don't compromise public safety,
I'm open to that," Davis said. "But I don't favor letting prisoners out
earlier."

Most lawmakers appear to agree. But an influential group from Davis' own
Democratic Party say the budget crisis demands a look at cost-cutting
alternatives to incarceration -- in particular, the early release of some
nonviolent or elderly convicts.

"We've been a law-and-order state -- building more prisons, locking up more
and more people for life, making penalties tougher and tougher," said state
Sen. Gloria Romero (D-Los Angeles), who heads the Senate's prison oversight
committee. "But in a lot of ways, we've been tough on crime without
thinking through the consequences."

Senate President Pro Tem John Burton (D-San Francisco), frequently at odds
with Davis, is leading the voices suggesting it is time for a look at early
releases. At his request, prison officials have prepared a list of options
that, if fully implemented, could save the state hundreds of millions of
dollars.

Burton says he is not contemplating "letting Charlie Manson out of jail."
But he argues that there is no reason to imprison people convicted multiple
times of petty theft, also known as shoplifting. Corrections officials
estimate that 2,120 people -- enough to fill about half of a prison -- are
serving time for petty theft with a prior offense. Eliminating state prison
as an option for those people would save the state $14 million.

Burton also raises the possibility of freeing inmates who have up to 13
months remaining on their sentences, saving the state $132 million next
year. The proposal would exclude those convicted of serious or violent
felonies and sex crimes.

"Their budget is going to get real scrutiny, and there will be reductions,"
said Sen. Sheila Kuehl (D-Santa Monica), who sits on the subcommittee that
will take up the issue today. She believes there may be cheaper and more
effective alternatives to prison for nonviolent drug offenders and elderly
inmates.

Prison officials caution that releasing prisoners early may not save as
much money as some lawmakers hope; rather, it could add to local law
enforcement costs as some of those paroled early cause trouble in the
communities that receive them.

"It isn't just as simple as letting people out," said Stephen Green,
assistant secretary of the Youth and Adult Correctional Agency, which
oversees the prison system. "The infrastructure we have for parolees is
already very thin. If we dump a bunch more people out there, they will need
help, or they will prey on the most vulnerable in these local communities."

Green added that the $40-million spending increase proposed for prisons is
compelled by a rising inmate population, while the new headquarters, a
maximum-security prison at Delano and the $220-million rebuilding of San
Quentin's death row are being financed with bond money that cannot be used
for other projects.

A decade ago, California's prison budget was $2.6 billion, half its current
size, and there were 109,000 inmates in 24 prisons. Today, there are
160,000 felons in 33 lock-ups.

Mirroring the system's expansion has been the growth of the prison, parole
and California Youth Authority work force. It has ballooned by 50% in the
last decade to 50,000 this year. The overall state work force grew much
more slowly -- by 22% -- during that time, according to the Department of
Finance.

Nationally, the population of state prisons has surged as well, with
corrections consuming an ever larger share of state revenue. The National
Assn. of Budget Officers estimates that about 7% of state general funds are
used for penal systems. California spends almost 9% of its general fund,
the part of the budget used for schools, parks and health care.

Though no governor wants to appear soft on crime, several states facing
budget shortfalls are taking steps to save money on corrections. In
Oklahoma, Republican Gov. Frank Keating has asked the parole board to
identify 1,000 nonviolent inmates for early release. Iowa laid off prison
guards. Other states have relaxed sentencing for certain crimes, mostly
drug offenses.

Kentucky last month began releasing 900 prisoners to help shrink its
$500-million budget shortfall. In ordering the emergency releases, Gov.
Paul E. Patton, a Democrat, acknowledged that some of those freed -- a
group that included convicted arsonists, burglars and thieves -- would
likely commit new crimes. But Patton suggested that he had no choice: "I
have to do what I have to do to live within the revenue that we have," he
declared.

Even Texas, second only to California in the number of people it
incarcerates, has taken steps to save money by funneling some parole
violators into lower-security detention and drug treatment facilities.

In California, any move to open prison doors early is sure to face
opposition. The 26,000-member prison guards union, known as the California
Correctional Peace Officers Assn., long has pushed for tough sentencing.
The union is among the biggest campaign donors in California, giving $3.4
million to Davis directly and indirectly since his first run for governor
in 1998, including more than $1 million last year alone.

Davis press secretary Steve Maviglio said there is "no connection
whatsoever" between campaign money and the prison budget.

Davis will have legislative allies in any fight against releasing inmates
early. Assembly Republican leader Dave Cox of Fair Oaks called the concept
"a very slippery slope." Freshman Assemblyman Rudy Bermudez (D-Norwalk)
also opposes it. Before winning his Assembly seat, Bermudez was a state
parole officer, and is a longtime member of the California Correctional
Peace Officers Assn.

Bermudez is in a position to exert some influence over the corrections
budget, having been named by Speaker Herb Wesson (D-Culver City) as
chairman of the Assembly subcommittee that oversees prison spending.

In a hearing last week, Bermudez went out of his way to act tough toward
the department that has employed him. He voted to delay the opening of the
new prison at Delano by a year, saying that would save about $12 million,
and upbraiding Youth Authority and Department of Corrections officials.

Rather than trim sentences or release inmates early, Bermudez is homing in
on prison administration. He made what he called a surprise visit to
corrections headquarters in Sacramento, bringing the union's lobbyists and
one of its top executives. Bermudez said he is "looking at total
restructuring of the administrative side."

Among items troubling Bermudez and other critics is the department's
continual overspending of its budget.

In December, as Davis called on lawmakers to make $10 billion in emergency
cuts to an array of programs, his Department of Finance requested $70
million to cover unexpected prison costs from last fiscal year. That
request followed $170 million in extra prison spending approved by the
Legislature earlier in 2002.

On top of that, the administration has asked lawmakers to approve another
$150 million so the prison system can meet its obligations in the current
budget year. The bulk of unanticipated costs are attributed to overtime,
sick leave, workers' compensation, a rising inmate population and medical
costs.

California prison officials say many expenses are beyond their control. The
state, for example, must feed each prisoner three times a day. It does so
for about the cost of a kid's meal at a fast-food restaurant. Spread over a
year, however, that amounts to $224 million.

The cost of mental health care has risen largely because the state settled
a class-action lawsuit by prisoners seeking proper treatment. In the coming
year, the state will spend $245 million on psychiatric care, up from $20.5
million a decade ago. The overall health care cost will be $939 million,
triple what it was 10 years ago.

While many prison-related costs are locked in, critics say the Department
of Corrections fails to contain spending.

In 1997, it spent $43.8 million on pharmaceuticals. Last year's cost:
$110.5 million. State auditors reported last year that the department could
have cut the cost significantly by using a more up-to-date system to buy
and dispense prescriptions.

A major cost in coming years will be the labor accord reached by the Davis
administration and the guards union a year ago -- and approved by a
near-unanimous vote of the Legislature, including Burton and others who now
are looking to cut the corrections budget.

Over the five-year life of the pay package, prison workers' pay could rise
by 37%, costing more than $500 million a year, the state auditor reported
last year. The Davis administration estimates the pay hike will be 28%.

"Contrary to what people think, we have a budget that is very difficult to
cut," said Green of the Youth and Adult Correctional Agency. "The only way
... is to let a bunch of people out early, and the governor does not want
to do that."