SQ 780 should save Oklahoma millions next year

Last November, Oklahoma voters passed two significant criminal justice reform measures by wide margins. SQ 780 reclassified simple drug possession and low-level property crimes from felonies to misdemeanors, taking away the possibility of prison time for these less serious offenses. SQ 781 directs state officials to calculate the savings from keeping those people out of prison and send it to counties to invest in rehabilitative programs like mental health and substance abuse services. Using any reasonable calculation method, the savings from SQ 780 should be several million dollars in FY 2018, the first year that the questions go into effect. Lawmakers should begin planning how to fit this significant but foreseeable investment into the FY 2019 budget.

SQ 781 directs Oklahoma’s Office of Management and Enterprise Services (OMES) to “use actual data or best available estimates where actual data is not available” to calculate “the savings and averted costs that accrued to the state from the implementation of the Oklahoma Smart Justice Reform Act [SQ 780].” OK Policy’s analysis of Department of Corrections (DOC) data suggests that the savings will be millions of dollars the first year, growing substantially in the years following.

Key assumptions will affect the SQ 781 calculation

The first consideration when estimating savings is to decide what to use for the DOC’s daily cost of incarceration per prisoner and the number of prison days averted by SQ 780. For the daily rate, OMES could use the jail backup reimbursement rate of $32, the daily per-inmate rate of about $42 at minimum security state facilities, or the overall average daily cost of about $52. Or they could estimate the marginal cost for inmates state prisons — a figure that only takes into account costs like food and healthcare for one additional inmate. Community Resources for Justice (CRJ), the organization that provided technical assistance to the Governor’s Justice Reform Task Force last year, calculates that marginal cost at $12.21 per day.

OMES will also have to estimate the number of people who avoid prison next year as a result of SQ 780. About 3,200 people in DOC custody were serving sentences for possession in FY 2015. While SQ 780 also reclassified some minor property crimes by raising the felony theft threshold, it’s very difficult to know how many of the approximately 2,600 inmates serving time for larceny, bogus checks, and similar crimes will be affected. 

A look at the data shows that the number of receptions for Possession has spiked in recent years. For the Fiscal Years 2005 to 2015, Possession of a Controlled Dangerous Substance was the most common reason for people entering Oklahoma prisons, accounting for nearly 18 percent of receptions. The number of receptions fluctuated between 1,300 and 1,900 per year, and those people served about 19 months in prison on average.

A complicating factor is that some of the people who would have gone to prison for SQ 780’s covered offenses could instead be charged with other felonies, like Possession with Intent to Distribute, that could come with a prison sentence. For that reason, CRJ estimates the full impact of SQ 780 at only about 1,700 fewer inmates. The problem is that prosecutors — in Oklahoma and across the country — have broad discretion to decide what charges to pursue. This results in vastly different outcomes for similar cases depending on the attitude of the local District Attorney’s office.

While fewer people in Oklahoma prisons does mean some averted costs, DOC’s funding and staffing levels are already dangerously low. Persistently overcrowded and underfunded prisons means reducing the agency’s appropriation is not feasible in the short run, so the investment mandated by SQ 781 will functionally become a new General Revenue Fund expense. The real savings will be realized when the prison population is lowered enough to be able to close facilities or sections of facilities.

Based on marginal prisoner costs and historical possession sentencing, SQ 780 would save nearly $45 million over first six years

This information can be used to make informed estimates of the savings to the state if SQ 780 had been implemented in previous years. For the first year of implementation, the Department of Corrections will avoid incarceration costs only for the people who would have gone to prison in that Fiscal Year. In the second year, the savings will include people who were admitted that year and the previous year, and so forth.

Using this data, we calculated how many days were served in DOC in each year by people received on Possession convictions, and used a $12.21 per day estimate of costs for these inmates (This does not take into account changes in prosecution and excludes inmates serving time for low-level property crimes). No matter what year is chosen as the start date, the implementation of SQ 780 would have saved the state millions of dollars in the first year, then increasing sharply. If implemented in 2010, for example, the state would have averted over $3.2 million in the first year. The second year, the savings jumps to over $7 million, since the state would save money for the full year spent by most people admitted the first year, in addition to all the people admitted in the second year. By FY 2015, the state would realize $13.6 million in savings from the thousands of people diverted from prison — with savings totalling $44.8 million in those first six years.

Avoiding the fate of California’s Prop 47

SQ 780 and SQ 781 were modeled on the success of California’s Proposition 47 in 2014, which reduced many drug possession and property crimes from felonies to misdemeanors and, like SQ 781, directed that the savings be invested in services. Unlike Oklahoma’s initiative, however, Prop 47 was retroactive, allowing many people convicted of these crimes to apply for resentencing.

Despite initial estimates of savings of $100 million to $200 million, Gov. Jerry Brown’s official calculation came to only $29.3 million for FY 2016, prompting accusations that he was intentionally lowballing the estimate. The difference lies in the assumptions that Gov. Brown used: a “blended” daily cost that his office created, and an estimate that Prop 47 reduced the prison population by 4,712 — just over half of the total reduction from the previous year. The Governor’s office did not release a full explanation of either number. The calculation also included $33.4 million in new court and parole expenses that the state would be responsible for, reducing the savings number significantly.

Using a more ambitious estimate for savings could pay off for Oklahoma over the long-term, because providing the treatment needed to avert a mental health or addiction crisis brings savings for families, businesses, communities, and government alike. Lawmakers should view this as an opportunity to make up some of the ground that Oklahoma has lost in funding mental health in recent years. For a state with the second highest rate of mental illness, we must do much better than 44th in per capita spending on mental health services. While lawmakers missed failed to restore mental health funding or pass more significant smart on crime reforms this year, Oklahoma can’t wait much longer, when the alternative is adding hundreds of millions in costs to build more prisons.