How Can California Reduce the Costs of Incarceration?

California Governor Gavin Newsom has agreed to give state prison correctional officers a 3 percent raise. According to the Legislative Analyst’s Office, there is “no evident justification” for this raise.

A recent article in the Sacramento Bee summarizes portions of the LAO report, writing “The last time the state compared state correctional officers’ salaries to their local government counterparts, in 2013, state correctional officers made 40 percent more than officers in county-run jails, according to the LAO analysis,” and, “Since 2013, salary increases for state correctional officers have increased by a compounded 24 percent, according to the LAO.”

Within the LAO report, it is made clear that the rising cost for pensions is a major factor in escalating compensation costs for California’s prison guards. In theory, the cost to provide pension benefits is reasonable. The so-called “normal cost” of a pension is how much you have to pay if your pension system is fully funded. Unfortunately, that’s a big if. Today, the normal cost is only a small fraction of total pension costs. Most of the money going to CalPERS is to pay down their unfunded liability, built up over years of insufficient annual payments, along with lower than projected investment returns, and benefit enhancements that were justified using overly optimistic financial projections. CalPERS, the pension system that serves the California Correctional Officers, is underfunded by at least $138 billion. It is only 71 percent funded.

To see how this translates into the cost of individual pension […] Read More