Court Funding: From Crisis to Stability National Foundation for Judicial Excellence Fifth Annual Judicial Symposium Robert N. Baldwin Executive Vice President And General Counsel National Center for State Courts

State and Local Revenue will be Severely Constrained at Least through 2010 and most likely 2011 Basic Message 2

Source: Center on Budget and Policy Priorities 3

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What is the status of state court budgets? 5

Source: COSCA Budget Survey June 12,

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Special Programs that are likely to be eliminated or reduced because of budget cuts—Percentage of States 8

How will the federal stimulus package affect court budgets? Source: COSCA Budget Survey June 12,

Statement of the Problem Particularly difficult for states to recover from current fiscal situation  Housing markets slow to recover  Depressed consumption and sales taxes  Property tax revenues affected  Unemployment deteriorates income tax revenues and creates further downward pressure on sales tax revenues 10

Statement of the Problem Primary actions state can take during fiscal crisis:  Draw down reserves (rainy day funds)  Cut expenditures (can slow economy)  Raise taxes (can slow economy) 11

Statement of the Problem States have implemented or are considering cuts that will affect:  Low income children/families health insurance or access to health care  Programs for elderly and disabled  K-12 and early education  Public colleges and universities  State workforce 12

Statement of the Problem Can Courts Avoid Cuts? 13

The Current Fiscal Crisis – How is it different?  Appears that it will get worse for next several years  Structural deficits in state budgets  Demographic shifts (fewer workers, more retirees)  Rising health, education and transportation costs  Both state and local governments are being hurt severely  Merely relying on cutbacks may not be adequate  Tax increases and fee increases used last recession. May not be available  Accounting tricks already used 14

The Good News Courts are being significantly shielded from the worst of the budget impacts in most states. Federal stimulus will lessen reduction in court budgets—for now 15

State Strategies from Last Recession 16

How are Court’s responding this recession? A.50% will not be filling judicial vacancies B.Will not be recalling retired judge to sit C.Reducing hours of operations D.Limiting weekly hours worked E.Implementing hiring freezes F.Implementing voluntary furloughs 17

How are Court’s responding this recession? (cont.) G.Restricting travel H.Deferring pay raises I.Reducing employer contributions to health benefits J. Creating mandatory furloughs K.Cutting funding to special services and programs e.g. ADR, Problem Solving Courts 18

How are Court’s responding this recession? (cont.) L.New or additional technology M.New emphasis on collection of fines and costs -Private collection agencies N.Increase in fees - May not work because this has already been done 19

Impact of cuts A.Increased backlogs in civil, criminal and family/juvenile cases B.Reduction in service to public C.Diminished record keeping D.Limited access to the courts -Reduction in hours of operations -Increased filing fees E.Diversion of resources from civil to meet constitutional and statutory mandates in criminal, juvenile and family matters F.Possible reduction in jury trials G.Jurors seeking recusal for financial hardships H.Voluntary Judicial pay cuts 20

Elements of Budgeting Strategies Focus on overall mission of the courts – “constitutional necessity” “core function of government” A.Budget Justification  Relate needs to mission and goals  Develop a cost accounting mentality  Evaluate alternatives  Present budget requirements as part of the justice system  Include particular costs of statutory and constitutional requirements  Cite all applicable legal provisions 21

Elements of Budgeting Strategies B.Accountability Measures  Develop analytical data to indicate performance and shortfalls (CourTools)  Define areas where lack of funds will affect the programs C.Inherent Powers – can this be used? 22

Strategies Administrators May Consider for Responding to the Fiscal Crisis -Judicial independence is enhanced by increased managerial credibility and entrepreneurial court management -Fiscal crisis requires prioritization of court services, strategic panning and agile management -Court should accept fair share of budget cutbacks, but could seek freedom in return e.g. lump sum budgets 23

Strategies Administrators May Consider for Responding to the Fiscal Crisis -Leverage technologies based upon return on investment and cost avoidance strategies -Establish partnership and ongoing dialogue with funding bodies -Create a Performance Measurement System -Exempt mandated expenditures from basic budget reductions e.g. salaries of judges 24

Strategies Administrators May Consider for Responding to the Fiscal Crisis -Shift non-court costs out of the court budget, e.g. indigent defense costs -Outsource specialized functions and staff intensive operations e.g. collections -Enhance judicial collections  Outsource to private sector collectors  Tax intercept programs -Leverage opportunities for Process Re-engineering and Restructuring 25

Service Redesign -What does a court do when all other remedies for budget cuts fail to solve the problem? -Best Practices for Redesigning the way courts deliver services 26

 Think in terms of services for stakeholders instead of functions that courts perform. Example: Payment of traffic fines online instead of traffic citation case processing.  Think in terms of external stakeholders instead of internal staff.  Think in terms of redesigning business process to deliver more with less instead of maintaining current business processes while delivering less with less. Some Baseline Concepts 27

 Reduce court hours  Reduce court locations  Reduce therapeutic courts  Reduce non-constitutional services  Reduce staff  Reduce pay Reduce external services to stakeholders! Typical Current Strategies 28

 Automation of processes  Centralization of processes  Changes in court organization  Standardization of processes  Outsourcing processes Reduce the cost of existing services Low-hanging Fruit for Redesign 29

 Electronic filing & docketing of documents and motions  Electronic payments  Electronic Document Management System  Litigant self-help  Notifications  Creation of the official court record  Integrated Case Management System  Provision of the record on appeal Automated Services 30

 Filing  Payments  Collections  Document access  Data queries  Jury services (partial)  Interpreters (partial) Centralized Processes 31

-Consolidation of courts -Changes in venue requirements or jurisdictional lines -Greater flexibility in assigning judges and court personnel across jurisdictional lines Changes in Court Organization 32

 Every administrative process statewide?  Every technology statewide?  External interfaces only  Services only  Applications, Systems, Infrastructure Standardized Services 33

 Technology infrastructure  Network  Servers   Security  Collections  E-filing  Data entry Outsourced Services 34

 Happier customers, because they get improved services  Happier staff, because they get improved jobs and pay  Happier society, because it gets a court system with renewed institutional viability and improved efficiencies. The Pot of Gold 35

 Public wants all three branches of government to play a big role in addressing significant justice problem  90% think it is important for heads of the three branches to meet regularly on justice system issues  Public thinks courts should be provided enough money to function properly Separate Branches, Shared Responsibility 36

 Over 80% oppose raising filing fees  85% oppose cessation of jury trials  71% say state Supreme Court should have the final say in deciding controversial issues  74% of well informed categories express confidence in the courts compared to 65% confidence in the legislatures and 66% in the governor Separate Branches, Shared Responsibility (cont.) 37

1.Periodically survey court administrators to track budgets, shortfalls and strategies 2.Budget Resource Center Interactive maps where you can see state specific activity and learn from other states What is NCSC Doing? 38

3.SJI Grant to track shortfalls and identify the principles by which courts should be funded - Funding Guidelines or Principles - Collecting best practices - Providing technical assistance – SWAT team with court connection network 4.Developing Redesign Methodologies - High Performance Courts What is NCSC Doing? 39