Prison Health Care Almost Half Billion Over Budget

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Adding more angst to easily the worst budget situation in California history, officials confirm that the federal court appointed prison receivership has spent almost $500 million more than budgeted in the fiscal year that ends on June 30.

The cost overruns in the operation overseen by receiver Clark Kelso have been the subject of Capitol rumor for months. But the high price tag was only confirmed over the last 24 hours, first by comments made during a budget conference committe hearing on Tuesday and later by Kelso himself.

The $487 million overbudget problem, known as a "deficiency" in government parlance, is in the receiver's contract medical services operation, according to Kelso. That's the part of prison health care that sends inmates to medical facilities outside of prison walls when deemed necessary. "These are expenditures for out-of-prison hospital and specialty care," said Kelso in a phone interview this afternoon.

"There's a lot [of inmate care] that does have to be sent out," he said, "because we don't maintain that level of care within the prison."

Kelso said the range of medical treatments vary, from inmates with liver disease to those who have foot injuries and need podiatry services. The receiver said that his staff has known that such services were running over budget since the end of 2008, and have been working to implement planned efficiences sooner than expected as a result.

For some perspective, consider that the state budgeted $359 million for contract medical services in the 2008-09 fiscal year, which means that the actual expenditure will be $846 million... 136% more than expected. In fact, the entire prison health care receiver budget was just under $1.8 billion. This revelation pushes that total well over $2 billion.

Legislators say they were unaware of the cost overrun. "If he is half billion dollars over budget, he's certainly going to have to show us where and why," said Assembly Speaker Karen Bass.

Kelso said that he's constantly aware of the necessary balance between the state's fiscal woes and the court directive to provide health care for prisoners that doesn't violate the U.S. Constitution. But some lawmakers remained unconvinced.

"We need to make sure that the law-abiding citizens of California are not getting short-changed," said Sen. Bob Dutton (R-Rancho Cucamonga), "just because of some inmates that are getting more benefit than they are deserving." Dutton's comments came during a break from Wednesday's long the joint budget conference committee hearing, where citizen after citizen begged for social services programs not to be cut.

A budget spokesman for Governor Schwarzenegger said that the administration learned of the higher prison health care costs a few weeks prior to the revised budget released on May 14. As such, Schwarzenegger's budget takes into account the costs as part of its $2.3 billion in higher-than-expected costs for state government this year. The governor is expected to submit another $3 billion in budget cuts at the end of the week, cuts that come on top of the $5.6 billion in reductions offered at the start of this week.

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About John Myers

John Myers is Sacramento Bureau Chief for KQED Public Radio and "The California Report," heard daily on 23 public radio stations across the Golden State.

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