California Prison Czar Threatens $7 Billion Raid on State Coffers

SACRAMENTO, Calif. — The court-appointed receiver for California prison healthcare is preparing to seize the funding he needs to add 10,500 medical beds after state lawmakers twice rejected a proposal authorizing $7 billion in funding.

The California Prison Health Care Receivership will soon run out of funds and prison healthcare czar J. Clark Kelso is prepared to seize up to $70 million immediately from the state’s general fund, according to reports.

With the state and the California Department of Corrections and Rehabilitation under federal court order to raise the level of healthcare to constitutional standards, Kelso could circumvent state legislative procedures to procure funds to improve infrastructure and service delivery under the authority of U.S. District Court Judge Thelton E. Henderson.

Henderson placed the state prison healthcare system in federal receivership in 2006 following several inmate class-action lawsuits in the 1990s. Henderson ruled the standard of inmate medical care and facility conditions — with an average of one unnecessary death per week — violated the Eight Amendment against cruel and unusual punishment.

Kelso could use the court’s authority to appropriate an additional $3.5 billion from the state treasury for fiscal year 2008-09, $2 billion in 2009-10 and $1.5 billion in 2010-11.

A prison healthcare spending proposal (SB 1665) sponsored by Sen. Mike Machado (D-Linden) twice fell short of the two-thirds majority support required for passage — the Senate vote went largely along party lines as Republicans defeated the bill 23–15.

“The state’s failure to make the necessary financial commitment is not a result of inadvertent neglect or mere incompetence,” writes Kelso in a court filing to Henderson. “It is a result of conscious, deliberate obstruction.”

In 2007, the Legislature authorized $7.7 billion in corrections spending to relieve prison overcrowding and many state legislators balked at additional corrections spending. However, state investment in prison healthcare, facilities and bed space is no longer a discretionary issue and lawmakers may have little choice but to fund the proposal in full, officials say.

“The state has declined to fund major capital projects the receiver considers essential to fulfilling the charge given to him by the court,” according to a court notice issued in June.

In June, Henderson agreed to Kelso’s request to add state controller John Chiang to the list of defendants in the prison healthcare suit, Plata v. Schwarzenegger. With the controller named as a co-defendant, Kelso could now file a motion asking the court to order Chiang to release funds from the state treasury without the approval of lawmakers, experts say.

However, even with a court order in hand, Kelso may not find it easy to obtain the necessary funding, experts say. The state is more than $15 billion in debt and general fund reserves for the current fiscal year are depleted, according to reports.

Funds could be diverted from other areas, such as education or healthcare, forcing cuts in state spending, officials say.

The Machado-sponsored proposal sought $6 billion in lease revenue bonds to build seven long-term chronic-care facilities in northern and southern California. An additional $1 billion in bonds and general funding would be used to upgrade existing medical facilities at the state’s 33 prisons.

Up to 75 percent of the proposed beds would be dormitory, sheltered-living settings, which could be reconfigured and repurposed as needed to function as standard, nonmedical housing units for healthy inmates, officials say. The proposal calls for the remaining beds to be of assisted-living and skilled-nursing home quality.

The plan comes a year after the governor and state legislators enacted AB 900, a $7.7 billion measure to build 45,000 prison, jail and community re-entry beds. The package also includes $1.14 billion to construct 8,000 medical and mental health beds.

CPHCR Selects $2.5 Billion Phase I Design-Build Teams

The California Prison Health Care Receivership Corp. announced Clark/McCarthy/HDR/HGA, DPR/Boldt/Kiewit/Stantec/GKK/Rosser, and Hensel Phelps/HOK/HKS as the final design-build bid teams that will compete for $2.5 billion in Phase I construction projects under the receivership’s proposed prison healthcare improvement plan.

The expansion in healthcare space could also help alleviate general prison overcrowding statewide — the CDCR houses approximately 170,000 inmates in facilities with a design capacity of 85,000 beds. Several thousand medium- and maximum-security inmates currently housed in prison cells could be transferred to the new healthcare facilities.

Negotiations with federal mediators, Elwood Lui and Peter Siggins, who were appointed by a three-judge District Court panel in an ongoing prison-overcrowding lawsuit, and plaintiffs’ attorneys also reached an impasse after lawmakers rejected a proposed settlement.

The parties are proceeding to trial as the state faces the prospect of a federally mandated prison population cap and the mass early release of inmates, experts say.

With the state in dire financial straits, lawmakers insist prison healthcare reform and facility construction should form part of a comprehensive effort to solve the state’s prison overcrowding crisis, according to reports.

If state lawmakers approve the proposal or the receivership secures the necessary funding via court order, construction of the first facilities could begin by January 2009, officials say. 

The proposed sites for medical centers in northern California are Deuel Vocation Institution, in Tracy; California State Prison, in Sacramento; California State Prison, Solano; and Northern California Youth Correctional Center, in Stockton.

The southern California sites are R.J. Donovan Correctional Facility, near San Diego; Ventura Youth Correctional Facility, in Camarillo; California Institution for Men, in Chino; and Fred C. Nelles Juvenile Correctional Facility, in Whittier, according to reports.

A construction advisory board will be established to oversee implementation of the plan, which will utilize an innovative coopetition model for integrated project delivery and design-build services, officials say.