Budget Cutback Strategies


The slowing economy is impacting state, county and local governments. Lower sales tax revenues, property tax reductions resulting from home devaluations, and other faltering revenue sources are making it necessary for legislative bodies to request courts cut current expenditures and reduce future budgets.

Many urban trial courts are facing hiring freezes, reductions in force, frozen capital programs, and across-the-board decreases. Budget cutback strategies and lessons learned from similar economic problems occurring after the 9/11 tragedy from 2002-2004 are being dusted off and re-worked by chief judges and executive officers. Alan Carlson, President of the Justice Management Institute, a non-profit court consulting, research and education group headquartered in Denver, and a NCMC Board member, presented a quick review of the current situation at the NCMC Annual Meeting in Las Vegas (February 20-22, 2008). His workshop, entitled The Mounting 2008 Budget Crisis: Effectively Addressing Reduced Revenues, Hiring Freezes and Budgetary Mandates, provides insight for judicial leaders on the common problems and possible responses for urban courts.

Carlson outlined a useful thought process urban court policymakers may wish to use in reviewing possible revenue increases over short and long term time spans, and “intelligent” ways to explore possible decreases ranging from “nick and cut” one-time responses to more structural changes targeting business reorganization and “rational deconstruction” of programs by abandoning non-mandated services and performing required functions in new, more cost-effective ways. Although data from urban courts about budget problems is spotty1 , there is little doubt that a nationwide funding dilemma among trial courts is growing and likely will continue for at least a few years into the future.

Increase Revenues

Short Term / One Time Strategies

Redirect resources by moving a funding stream from one source to another to offset expenses in the General Fund. Miami/Dade Superior Court channels user fees to its self-help and DWLS programs to avoid drawing money from operating dollars.

Redirect expenses by moving costs to another fund or revenue source. Orange County CA has shifted some expenditures from state to local funding. Fulton County GA has moved some capital project costs from the General Fund to DHS grants. Other courts report heavier use of reserve funds and borrowing or leasing to finance capital projects or equipment purchases.

Long Term / Multi-Purpose Strategies

Enhance Revenue Collections by increasing the rate of collection. Counties in CA have grown fine revenues by converting defaults to a civil judgment and adding a civil assessment fee. AZ, MN and MO courts have increased collection rates on unpaid fines, fees and costs by outsourcing early in the “debtflow process” to technology integrators who are breaking into the traditional collections market. The National Center for State Courts conservatively estimates there is $5B in uncollected court debt nationwide. The most productive collection programs target limited jurisdiction traffic and parking fines.

Develop New Revenue Sources through fees or assessments. Maricopa County AZ has developed new fees for post-dissolution proceedings and probation surcharges. Miami/Dade FL imposed service fees for providing interpreters in civil cases and drug court. King County WA has incorporated new fine revenue from photo radar (traffic safety cameras). Several states have added a myriad of assessments to fines over the years.

Leverage Resources through coordination and partnerships among trial courts or between courts and other agencies or institutions. Such approaches include sharing administrative support services, the use of volunteers and channeling work to other agencies such as promoting self-help literature and assistance through public and neighborhood libraries.

Reduce Expenditures

Short Term / One Time Strategies

These approaches are designed to have minimal impact on programs, services and service levels. The expectation is that there will be a return to normalcy before the impact on services and performance is destructive or irreversible.

“Nick and Cut” tactics include across the board percentage cuts. Both state and locally funded courts in CA, AZ, MD and NJ are responding to executive and legislative branch requests to submit decreased budget requests for FY 2009 from two to twenty percent. Travel and training cuts have been imposed by many judicial authorities. Budget freezes at prior year levels are commonplace as well as developing early retirement incentives to reduce staff levels in large-scale ways. Stop or postpone supply and/or equipment purchases, upgrades and improvements. Montgomery County MD has frozen a 300K square foot addition to the courthouse. The CA Legislature has postponed the creation of new judgeships scheduled for 2008.

Long Term / Multi-Purpose Strategies

“Rearranging the Deck Chairs” focuses on changing the way courts do business. By strategically performing services more effectively, programs are allowed to continue to meet their objectives but at a lower cost. The ultimate goal is to promote permanent savings by using resources more wisely. An example is the work being done in Maricopa County AZ to promote faster front-end felony case processing to reduce jail overcrowding and the cost of housing inmates for the entire justice system. San Jose CA promoted new, more cost-efficient ways to use information technology by introducing new electronic traffic citation devices to reducing error rates from 10% to 2% which cut staff costs to fix errors by 2 FTE positions, eliminated duplicate data entry, and reduced citation filing time. The new program was paid for from federal grant money. Changing business practices, however, can be a long and cumbersome process.

“Rational Deconstruction” asks the questions: What could the court stop doing, or dramatically do differently? The expectation is to introduce a permanent, fundamental reduction in costs. Making these decisions requires court policymakers to identify key roles and core functions for the judicial branch, determine what the court is mandated to do by law, explore whether the court must perform its obligations in a required manner, research the possibility of another agency performing court services, and clarify the level of service required. Maricopa County AZ trial courts identified mandated functions, prioritized non-mandated programs, and assigned costs during an economic downturn in 2003. They are re-visiting those issues. King County WA has re-opened a zero-base budgeting process examining the need for numerous court programs. On the upside, rational, permanent reduction does afford court leaders an opportunity to eliminate a program or service that has little support or minimal value.

Ways to Minimize Proposed Court Reductions

Exempt Mandated Costs from Percentage Cuts by identifying “irreducible” costs and arguing that percentage reductions not apply to these costs. An example is judges’ salaries and benefits.

Garner Support with the Funding Body. This should be a ubiquitous approach court leaders follow in both good and bad times. Budgeting is a political process in large measure. The court’s story needs to be told in real and moving ways. Stakeholders, especially non-lawyers, who benefit from court programs can be very effective in lobbing on behalf of the judicial branch.

Establish Credibility of Court Spending by routinely demonstrating cost effectiveness and accountability in programs and practices. The use of the National Center for State Courts’ CourTools performance measures has helped many urban trial courts in working with their funding bodies.

Documenting the Impact of Cuts on public safety and judicial services has proven to be an effective approach for many urban courts in dissuading budget officials from draconian reductions. Caution in painting realistic scenarios is important, however.

Lump-Sum and Carry-Forward Budgeting are useful ways to let the court decide where to make cuts or channel money from savings and cost reductions. CA courts, as an example, have the discretion under their new state funding statute to lump sum budget.


1 Examples of state revenue shortfalls sampled in February 2008 range from $3.8 B in California for FY 08 (estimated to be $15B in FY 09) to $500M in New York in FY 08. The majority of states are facing budget difficulties according to the National Conference of State Legislatures.