ALASKA STATE LEGISLATURE  SENATE JUDICIARY STANDING COMMITTEE  February 2, 2009 1:33 p.m. MEMBERS PRESENT  Senator Hollis French, Chair Senator Bill Wielechowski, Vice Chair Senator Kim Elton Senator Lesil McGuire Senator Gene Therriault MEMBERS ABSENT  All members present COMMITTEE CALENDAR  Institute of Social & Economic Research: "The Cost of Crime: Could the State Reduce Crime & Save Money by Expanding Education & Treatment Programs?" HEARD PREVIOUS COMMITTEE ACTION  No previous action to record. WITNESS REGISTER STEVE COLT, Associate Professor of Economics and Director of ISER University of Alaska, Anchorage Anchorage, AK POSITION STATEMENT: Delivered the ISER research summary on expanding education and treatment programs and reducing the cost of crime. STEPHANIE MARTIN, Assistant Professor Economics & Public Policy and ISER Faculty Member University of Alaska, Anchorage Anchorage, AK POSITION STATEMENT: Delivered the ISER research summary on expanding education and treatment programs and reducing the cost of crime. ACTION NARRATIVE  1:33:28 PM CHAIR HOLLIS FRENCH called the Senate Judiciary Standing Committee meeting to order at 1:33 p.m. Present at the call to order were Senators Elton, Therriault and French. Senators Wielechowski and McGuire joined the meeting soon thereafter. ^ISER Research Summary 1:33:52 PM CHAIR FRENCH announced that Steve Colt and Stephanie Martin from the Institute of Social and Economic Research (ISER) will present a study that came out of the 2008 Crime Summit. Last year Mr. Steve Aos from Washington state was invited to talk about his efforts to use an economist's perspective to get an idea of the payback to society for having invested a dollar in a rehabilitation program. His work was an eye opener; my colleagues and I were able to get $50,000 and we asked ISER to conduct a "Steve Aos style" evidence-based research inquiry into the Alaska rehabilitation program. 1:35:18 PM STEVE COLT, Associate Professor of Economics and Interim Director of ISER, University of Alaska, Anchorage, introduced himself. He said that he received his doctorate in economics from MIT and has been working in Alaska for about 25 years. Stephanie Martin, Assistant Professor of Economics & Public Policy, and ISER faculty, University of Alaska, Anchorage, also introduced herself. MR. COLT presented the research report titled: "The Cost of Crime: Could the State Reduce Future Crime and Save Money by Expanding Education and Treatment Programs?" and restated that it stems from Mr. Aos' visit about a year ago. The report is also available on the ISER web site at www.iser.uaa.alaska.edu. CHAIR FRENCH held up a sign showing the address and added that it can also be found by "Googling" ISER. MR. COLT said the goal of the analysis was to see if expanding effective intervention programs might reduce crime and save money. The study was based on work done in Washington state and pioneered by Mr. Aos. He will summarize the study process and the major conclusions. He thanked the Alaska Criminal Justice Working Group for its work and cooperation. It is chaired by Lieutenant Governor Parnell and Supreme Justice Carpeneti and includes members from departments that deal with criminal justice. They would particularly like to thank staff from the Department of Corrections, the Department of Health and Social Services, Juvenile Justice, and the Alaska Mental Health Trust. 1:38:24 PM CHAIR FRENCH recognized that Senator McGuire had joined the committee. MR. COLT explained that evidence-based policy analysis was used to perform the study. It is roughly similar to clinical trials in medicine and means that they generally used only the results of studies where there was a random assignment of people to a program or control group. Some studies were used where the control group was created by carefully matching program participants with non-participants after the fact. That method is used in medical epidemiology, but it isn't quite as good as a randomized clinical trial. For the most part they used studies that mimicked the medical clinical trial approach of randomly assigning people. He next outlined the step-by-step approach taken to conduct the study. 1. They made a base-line projection of prison inmates from now thru 2030. 2. They worked closely with the Alaska Criminal Justice Working Group to identify programs that are currently offered in Alaska. 3. They screened the list of programs and eliminated a few because adequate rigorous analysis wasn't available upon which to make a judgment. "We're trying to remain true to the ideals of this idea of evidenced based analysis." 4. They applied the Steve Aos model-and the empirical results he gathered from a review of hundreds of studies nationwide-to the Alaska data on the eligible populations and inmate populations. 5. They shared the results with the Criminal Justice Working Group, listened to their feedback and made adjustments to the analysis accordingly. 1:41:49 PM MR. COLT set forth the findings and conclusions from page 1 of the report as follows: · With no change in policies, the number of Alaska inmates likely will double by 2030-from 5,300 to 10,500. · If the state spent an additional $4 million a year to expand programs it already has, ISER estimates that the prison population in 2030 might be 10 percent smaller than projected-about 1,050 fewer inmates. · Finding three extends the analysis through time and tallies the costs and benefits in dollar terms. That finding is that the state would spend about $124 million for expanded programs through 2030. By doing so it could avoid $445 million for a net savings of $321 million. It would save money by incarcerating fewer people and by delaying prison construction costs. Fewer people would be incarcerated because fewer people because they would be committing fewer crimes. · The fourth major finding is that education and substance-abuse treatment programs in prison, after prison, and instead of prison would save the state two to five times what they cost and would reach the most people. They also found that programs for teenagers are effective at reducing crime and saving money, but they reach fewer people. 1:43:49 PM CHAIR FRENCH recognized that Senator Wielechowski had joined the committee. He summarized what had been covered and noted that today this report was released to the public for the first time. MR. COATS agreed. CHAIR FRENCH added that this is the first opportunity to see that investing a few dollars today can save thousands a few years out. MR. COATS agreed that the analysis does show that. SENATOR ELTON noted the report focuses on the state and asked if there had been any analysis to suggest that municipalities would see comparable reductions. MS. MARTIN clarified that the study specifically looked at state spending, but just as trooper costs would go down she believes that police costs also would go down. SENATOR ELTON said that in addition to saving $321 million, he would assume that additional cost savings would accrue to municipalities, which are a taxing authority in the state. MS. MARTIN nodded. SENATOR ELTON asked how they settled on $4 million and did they run numbers on whether or not spending more would bring additional benefits. MS. MARTIN explained that cost was not the first thing they looked at. Initially they looked at the number of people the programs could serve and the amount by which each program could be expanded. After that they tallied the numbers and arrived at $4 million. SENATOR ELTON characterized the $4 million as a policy suggestion to the Legislature. MR. COLT said he would strongly hesitate to call it a policy suggestion, but that does anticipate several points he intended to make. One point is whether $4 million is a high or a low number. For several reasons it could be either high or low, but he believes the estimates are on the low side of what would accrue. First, they did not do an exhaustive catalog of downstream savings to other law enforcement agencies or governmental entities. The second reason relates to how they arrived at the $4 million figure and the program expansions that drive that number. "You'll have to make your own judgment, but after you hear a little bit more about how that number was arrived at you'd probably conclude that yes there is room for additional expansion beyond what we've plugged in to get the $4 million." Diminishing returns is one reason they used the relatively conservative number for the scope of program expansion. Although it's not in the report, the third thing he wants to emphasize is that no attempt was made to quantify the cost savings to the victims themselves. In part that is because it is very difficult to monetize those costs, but in any event that cost is zero in this analysis. "We believe that lends an additional element of conservatism to the analysis," he said. 1:49:40 PM MR. COLT asked Ms. Martin to expand on the list of programs. MS. MARTIN explained that they looked at education programs, substance abuse programs and transition programs. The latter are for people who are leaving an institution and reentering the community. The various programs serve different populations. Prison-based education programs include: adult basic education, GED, vocational, and job training. Prison-based substance abuse programs in Alaska include residential programs within institutions as well as out-patient programs. They also looked at sex-offender treatment and found that it is effective but it's necessary to have both a community component, which there is, and a prison component, which does not exist in Alaska. That was added to the list of programs. As an aside she noted that sex offender programs reduce recidivism but they are not cost effective. That is clearly demonstrated in Figure 6 chart that ranks programs in terms of how much money they save and how much they reduce crime. Sex offender programs show up just above the bottom axis indicating there is no savings. 1:51:45 PM MS. MARTIN said that the education programs they looked at included Head Start preschool programs, which serve three and four-year-olds. Those have an unbelievable effect on future crime, but the effects are not apparent until years later. "In general the programs that are directed at young people are way more effective than [those that are] directed at adults." CHAIR FRENCH said he assumes that they build in the time-cost of money and the delay in the reduced crime rate. MS. MARTIN said that's correct. SENATOR THERRIAULT asked if they used data from Head Start research since it's probably the oldest early-intervention program. MS. MARTIN replied they used Mr. Aos's evaluation of the Head Start Program to determine how effective it is in reducing crime. His data came from about a dozen nationwide random assignment studies of Head Start. She added that a lot of early education programs do not look at crime as an outcome. Most look at outcomes like high school graduation and teen pregnancy. Under transition programs they looked at the Institutional Discharge Project Plus (IDP Plus). It has a very good recidivism reduction rate but it only serves about 70 people statewide. Alaska has a prison population of about 5,000 and approximately 40 percent are mental health trustees. We did not put a large expansion in their model simply because it's so small, she said. MS. MARTIN said they looked at alternatives to incarceration including therapeutic courts, mental health courts and drug courts. Those are very effective and have an immediate benefit. Rather than adding to the cost of being in prison, they're a dramatically less costly alternative than the $44,000/year cost of incarcerating a person. "With those programs you get an immediate payoff." They also looked at electronic monitoring. It does not affect crime rates, but it is cost-effective because people aren't put in prison. "The most expensive way to treat people is to incarcerate them." It costs about $44,000 to incarcerate an adult and nearly $90,000 for a juvenile. For juvenile offenders they looked at aggression replacement training, which has been implemented in the institutions and is starting in schools. Also, they looked at family therapy programs and transition programs. For young children they looked at Head Start. 1:55:22 PM MS. MARTIN directed attention to Figure 6 and said you really can't say which program is best because each one has a cost dimension, an eligible pool dimension and a time dimension. CHAIR FRENCH focused on adult education and said that as a lay person he wouldn't generally associate getting a GED with reducing the crime rate. He asked her to walk through how much crime might be reduced and why that produces a savings to the state. MS. MARTIN explained that without any programs about 68 percent of people who are incarcerated will return to prison within three years of their release. Typically they return soon. SENATOR WIELECHOWSKI asked what the average education level is in the correction system. MS. MARTIN said she didn't know, but most inmates do not have high school diplomas or GEDs. Continuing, she said that recidivism is reduced by about 70 percent, which is about 5 percent lower. "These are small small effects but over time they become big numbers." CHAIR FRENCH mused that when you spend $44,000 per person per year on 5,000 inmates, a 4 or 5 percent reduction can produce dramatic results over time. "You can't look for a 'Hail Mary touchdown pass;' you've got to just get a few yards on each program and it adds up." SENATOR MCGUIRE asked if they considered what reinstituting some community-based mental health programs could do to address issues prior to an event that leads to incarceration. MS. MARTIN said no; they talked about that around the table but that's all. SENATOR MCGUIRE asked why. MS. MARTIN explained that the Criminal Justice Working Group developed the list and she believes that they were programs that were coming off of federal grant funding onto state funding or they were programs that departments were thinking about asking for more money for. There had to be a limit and the first thing was to look at transition programs and evaluate how effective they were. The next step would be to look at community programs. CHAIR FRENCH asked for more information about the transition program they looked at and whether they were targeted at mental health trust beneficiaries or all inmates including the mentally ill. MS. MARTIN said it was trust beneficiaries but Mr. Jessee could probably provide a more thorough answer. 1:59:47 PM JEFF JESSEE, Chief Executive Officer, Alaska Mental Health Trust Authority, said the IDP Plus program is for people coming out of corrections who have a serious mental illness. Everyone coming out of corrections isn't eligible, but a sizeable percentage are. CHAIR FRENCH observed that although they didn't look at treatment for the mentally ill, they did focus on transition programs for that population. MR. JESSEE said yes; the working group's direction was to identify a discrete number of programs for expansion. His view is that it wasn't a comprehensive view of what might be put together as a coordinated strategic effort over time. It was to build a basic understanding of the connection between recidivism and having or not having some of these alternative programs. SENATOR MCGUIRE observed that there seems to be a direct correlation between budget cuts in community-based mental health treatment programs and a rising prison population of the mentally ill. She encouraged continuing focus on that connection and what the Legislature can do to address that issue. "I certainly don't think it's the intention of Alaskans to house our mentally ill in our prisons," she said. MR. JESSEE replied there are efforts underway that are independent of this. For example, there's been discussion about a housing trust because it's critical to connect support services to housing. The governor's budget has a $10 million set of increments that are directed toward implementing year one of the Council on the Homeless ten-year plan. He believes that this study presents a baseline understanding that you can impact recidivism and the corrections population over time if there is a strategic action plan that is monitored and managed. "Any initiative like this has to be actively managed," he said. That became clear in the Bring the Kids Home initiative. A particular group has to oversee implementation of the strategy, constantly reevaluate the data and make adjustments over time. 2:03:57 PM SENATOR ELTON said the challenge goes beyond just identifying the exact amount of money that's put into the programs. Part of the challenge also is to coordinate who will prioritize the programs and decide what entity can best deliver the service. For example, if you look at transitional housing he can see a role for the Mental Health Trust, tribes and community groups. He asked Mr. Jessee if he could discuss whether the Criminal Justice Working Group or some other structure would be the coordinator. "If you buy in to the notion that some of these programs are effective, how do you create the structure to make sure that you have the right people delivering the services and you have the right kind of mileposts to make sure that the money is being spent as best it can be?" MR. JESSEE referenced the successful Bring the Kids Home initiative and said the key stakeholders have to be at the table and take responsibility for the outcomes. Tribal entities, providers, family members and others have to be part of developing the strategies and monitoring implementation. With respect to implementing, monitoring and revising the initiative he noted that the Criminal Justice Working Group is weighted in the criminal justice area yet many of the programs come from health and social services and education. Some modification of the working group certainly could provide oversight but the main point is that funding a one time $4 million increment and doing nothing to manage a strategic plan could be disappointing and not translate into expected savings. "Again, if you set those outcomes and you manage towards them, I think you can get there." Understand that the charge was only to establish what works. "Translated into a specific strategic plan and vision for Alaska and implementing it…is taking the next step." 2:07:50 PM SENATOR ELTON said he appreciates the answer because one of the challenges is the "silo effect," which is that corrections does this, education does this and health and social services does this. He suggested that the next step might be to charge the working group or some other entity with figuring out who will make things work across those boundaries. CHAIR FRENCH asked Ms. Martin to discuss the line graph in Figure 1. MS. MARTIN explained that Figure 1 has three pieces of information. The top line represents the inmate population in Alaska; it shows a 500 percent increase between 1981 and 2007. The second line shows the inflation-adjusted state operations spending for criminal justice, which includes corrections, the courts, the troopers and juvenile justice. Those numbers are up [192 percent]. Line three shows a 30 percent decrease in crime rates. The graph demonstrates that there is crime reduction with increased spending but you have to spend a lot of money. Over time as more bad guys are put in jail it becomes more difficult to show reduced crime numbers by increased spending, she said. Figure 2 is a pie chart of 2002-2007 release data. During that six-year period about 82,000 people were released from prison or jail; 78 percent had been incarcerated for misdemeanor offenses. Alaska has a strict sentencing system and the most serious violent offenders are incarcerated for a long time. CHAIR FRENCH added that those crimes include murder, rape and kidnapping. MS. MARTIN agreed. CHAIR FRENCH recognized that Senator Davis had joined the meeting. 2:11:32 PM MS. MARTIN continued. Figure 3 is titled Potential Effects, Costs of, and Savings from Expanded Prevention or Intervention Programs. Information on the left side of the chart shows that the state is currently spending $17 million on programs. To get the results that we estimated the state must spend $4 million [every year to expand programs]. CHAIR FRENCH summarized that the state is spending about $17 million now and your study assumed a $4 million increase, which is approximately a 25 percent increase. MS. MARTIN agreed. She continued to explain that the middle figure shows that for every ten people who return to prison one will not be re-incarcerated if these programs are expanded. "These are not big numbers, but over time they add up." The figures on the right show that inflation proofing the expanded programs would cost $124 million between 2009 and 2030. Avoided inmate costs would amount to about $45 million for a net savings of over $300 million. Most of the savings come from delayed prison construction. SENATOR ELTON said he assumes that most of the savings accrue in later years. MS. MARTIN agreed; in the early years you spend more than you save. There's about a two-year lag between the time the program starts and when you'd see recidivism. CHAIR FRENCH commented that if you spend the $4 million it's not as though there won't be any more crime. "You're just not going to see that except for the slow accumulation of the savings and the reduced crime from that one out of ten." MS. MARTIN agreed. 2:13:32 PM CHAIR FRENCH recognized that Senator Thomas had joined the meeting. MS. MARTIN said that Figure 4 on page 2 shows annual state spending per inmate from 1981 to 2008. Currently it costs $44,000 per inmate per year. Adjusting for inflation the spending was higher in the 1980s when the state had more money. MR. COLT clarified that they aren't certain that all of the capital costs for the prison system are included in that number. $44,000 might be a little low; it's somewhat dependent on when prisons were built, how they were paid for and how it's being done now. MS. MARTIN continued. Figure 5 is a pie chart that shows that 60 percent of Alaska inmates have substance abuse issues, 6 percent have mental health disorders, 30 percent have both substance abuse issues and mental health disorders and 4 percent have neither. Clearly, a lot of people could benefit from these programs, she said. SENATOR WIELECHOWSKI asked if she has a further breakdown on the percentage of people who have alcohol abuse issues versus the percentage that have drug, narcotic or prescription abuse issues. MS. MARTIN suggested Mr. Jessee might have that information in his head. MR. JESSEE said he doesn't have the breakdown, but the vast majority substance abuse issues relate to alcohol. 2:15:59 PM MS. MARTIN continued. Table 1 lists the programs they reviewed and shows the population currently being served, reasonable expansion of the programs and the eligible pool. CHAIR FRENCH said that for example the education programs include adult basic education and vocational. About 1,000 inmates are currently taking advantage of one or both of those and the suggested expansion would be 500 inmates. MS. MARTIN said yes; they put those numbers into the model to generate the estimates. CHAIR FRENCH said he would guess that education isn't the most expensive program. MS. MARTIN said that's right; the most expensive programs are residential treatment but they're less expensive than incarceration. "They save more money even though the up-front costs are higher." Figure 6 is a chart that demonstrates how effective the various programs are at saving money and reducing crime. The vertical axis shows a multiple of how much the state could expect to save for each dollar it spends and the horizontal axis shows the percentage points that the programs reduce crime. For example, electronic monitoring yields a huge 22 to 1 payoff, but there is no associated crime reduction. CHAIR FRENCH noted that electronic monitoring saves the state money because someone who is wearing an ankle bracelet at home isn't in a $44,000/year prison cell, but no study says that they don't go out and reoffend once their sentence is up. MS. MARTIN clarified that there is a study that tests that and it has no effect on crime. CHAIR FRENCH said so there is no difference in the recidivism rate between a person who is home and wearing an ankle monitor and a person who is in a prison cell. There is no difference in later behavior based on their previous experience. MR. COLT clarified that is based on the evidence and he would defer to anyone who knows more. It could be that the evidence base in inadequate and that the conclusion is more of an unknown than zero. CHAIR FRENCH suggested that needs further testing because you could reach the conclusion that everyone should be on an ankle monitor. MS. MARTIN responded "unless you wanted to reduce future crime." 2:19:05 PM CHAIR FRENCH recognized that Senator Ellis had joined the meeting. SENATOR MCGUIRE asked if there have been any studies that look at the population that doesn't reoffend and ask what the significant events were that kept them from reoffending. Was it treatment, ankle monitoring, transitional housing, family or church support or something else? MS. MARTIN said she doesn't know the answer to that question. SENATOR MCGUIRE said that's something to keep in mind because it might be a way to get at that question. SENATOR ELTON said he was surprised to see electronic monitoring lumped in with education treatments because he's always considered it to be another form of incarceration. Lumping it in with treatment would assume that they're incarcerated in a different way, but those individuals aren't receiving any treatment at all to help reduce recidivism. MS. MARTIN explained that they tried to make the groups as concise as possible. Ankle monitoring was placed in that group because it doesn't incur the cost of incarceration, but it could have been split out differently because it's not a treatment. "But it is a way to save the state money," she added. CHAIR FRENCH referred to Figure 6 and observed that Head Start is the most effective program they looked at. It saves six times more than it costs and reduces future crime among participants by about 16 percentage points. MS. MARTIN said that's correct. SENATOR WIELECHOWSKI calculated that the actual drop would be 40 some percent. MS. MARTIN agreed it's about 42 percent. 2:22:11 PM MS. MARTIN explained that Figure 6 shows that the farther you are to the right on the bottom axis the more effective the programs are at reducing crime. The higher on the vertical axis the larger the cost savings "so there's a lot of trade offs." Figure 7 is a bar graph that projects how expansion of each program type contributes to reduced growth in numbers of inmates. The entire triangle shows that by 2030 1,049 fewer inmates are projected. Each bar is color-coded and shows the reduction that is expected from each program type. The programs don't all have the same effect on the prison population; it depends on the number of people served and the effect on recidivism. The cost benefit of each program type is described. For example, pre-school programs cost about $1,000 per child and saves about six times that much, but the effects of that program aren't seen until about 2025 when those pre-schoolers are about 18 years old. For comparison, the bottom segments include programs like therapeutic courts. Those divert people from the prison system so they show an immediate reduction in the number of inmates. CHAIR FRENCH asked her to describe the largest, red segments. MS. MARTIN explained that those represent education and job training programs in the prisons. They have a big impact because they reach the most people. ["Education and job training programs in prison add about $1,000 to inmate costs, but they reach the most people and save about four times more than they cost."] She added that they're not most effective programs but they're the easiest to expand. SENATOR WIELECHOWSKI recalled that Mr. Aos had statistics that showed that one of the most cost-effective ways of reducing crime is to fund foster care. "I think it was $73 for every $1 spent." He asked if ISER looked at that. MS. MARTIN said that program wasn't on the list; she believes there are some impediments to implementing it here in Alaska. Another program that has an unbelievable effect is the nurse- family partnership. Nurses go into houses of low-income expectant or new mothers. "The group decided that it's not practical or possible to implement it in Alaska." She doesn't know what the constraint was. 2:25:41 PM Figure 8 is a line graph showing the average number of Alaska Inmates from 1971 to 2007 and the projected number from 2008 to 2030. In 2007 there were 5,327 inmates in prisons, jails and halfway houses. The dotted blue line projects 10,513 inmates by 2030 at the current program level. The dotted red line projects 9,464 inmates in 2030 if the programs are expanded as proposed, which is a 10 percent fewer inmates. The financial benefit comes from delaying prison construction. Currently a new prison is built every six or seven years and that can be stretched to every nine or 10 years if these programs are expanded. "At $300 million per facility that's a lot of money," she said. CHAIR FRENCH noted that he just received an email invitation to the signing of the contract to build the new Point McKinsey Correctional Facility so it's timely to hear about some alternatives. MS. MARTIN added that the MatSu prison is scheduled to open in 2012 and part of the program there is to bring home the inmates who are incarcerated in Arizona. Those 900 inmates combined with the expected increase of 600 inmates will fill that prison as soon as it opens so we're already behind the curve, she said. MR. JESSEE referred to the visiting nurses program for at-risk families and explained that Alaska had a similar program called Healthy Families. The Mental Health Trust invested about $500,000 over five years to have John Hopkins University evaluate the outcomes and the data demonstrated that it didn't work. Again he emphasized that investing money in a strategy that is effective on paper and expecting it to get intended results doesn't necessarily get you there. He recalled telling the Legislature it either needed to fix the program or stop funding it and the decision was to stop funding it. But it doesn't mean that the model wasn't good, he said. "It's just if you're going to invest in it you have to have somebody paying attention to whether it's being implemented with fidelity to the model and whether it's getting the results that you intended." Another failed program was called the Alaska Youth initiative. It provided wraparound services to kids to keep them instate and in their homes, but over time it degenerated. The Bring the Kids Home initiative is basically recreating that program. "The difference is we learned from the last time that you have to keep tripwires in place to identify when these programs cease to be functioning as they intend." 2:30:16 PM CHAIR FRENCH thanked Mr. Colt and Ms. Martin and adjourned the Senate Judiciary Standing Committee meeting at 2:30 pm.