Summaries of Performance Incentive Funding Programs 

Introduction

Since 2007, ten states have implemented Performance Incentive Funding programs (PIF) for their criminal justice programs. Only the programs in California, Illinois, Pennsylvania, Kansas, and Ohio were funded, all of which were successful at reducing their targeted areas. These states reduced revocations substantially, averting between 3–100 thousand people from prison. Some of the programs that were not funded showed early signs of success in the first year.

Funded Programs

California

Brief:
SB 678 is the most successful example of incentive funding. Probation revocations dropped substantially statewide, and counties earned hundreds of millions of dollars in incentive funding. Taxpayers have saved over $1 billion.

SB 678:
Under the original version of SB 678, the state calculated the historic annual “probation failure rate” for a given county, determined the current probation population, and then estimated the number of people who would have been returned to prison at the historical rate. If the county was able to return a lower number of people than predicted, the county was entitled to 40-45% of the projected savings on each individual not returned (the estimated marginal cost of the time they would have spent in prison and on parole).¹ ² Another 5% of the total savings on averted people was distributed to counties that were already below 50% of the baseline, statewide return-to-custody rate as a reward for their excellent performance.

Although the rewards structure for county probation departments has changed slightly, the essential framework of SB 678 is still in place: counties are incentivized to rehabilitate as many inmates as possible, to obtain the maximum amount of shared savings.³ The results are staggering. Between 2009 and 2017, probation officers successfully averted thousands of supervised felons from incarceration, resulting in a total allocation of $703 million to California counties and over a billion dollars in estimated savings to California taxpayers.⁴

Illinois

Brief:
SB 1289 is another successful example of incentive funding. This model used both incentives and penalties to meet the ambitious goal of reducing recidivism by 25%. The program has been expanded to 45 counties and has consistently provided incentives to participants.

SB 1289 (2009):
In 2009, the Illinois General Assembly instituted a substantial criminal justice reform that included a PIF program: SB 1289.⁵ Illinois’ PIF program, called Adult Redeploy Illinois, provides financial incentives—the reallocation of state funds—to counties and judicial circuits to create and successfully implement “effective local-level evidence-based services” in order to “reduce crime and recidivism at a lower cost to taxpayers.”⁶ Failure to meet established targets—such as beneficial changes in recidivism, rate of revocations, employment rates, education achievement, successful completion of substance abuse treatment programs, and payment of victim restitution—requires localities to pay penalties. Unlike PIF programs in other states, it does not appear that these funds necessarily originate from cost savings. No cost savings are required to be calculated, nor are there any set percentages of such cost savings that are required to be allocated to successful localities. Reports of the success of such programs, however, are required to be presented on a timely basis to the governor and General Assembly.

Illinois has implemented more than one of these incentive programs, but the first one was focused on juvenile corrections—in the first three years, four pilot sites reduced the number of juveniles admitted to youth corrections facilities by 51%. The adult version of the program offered incentives to counties that reduced recidivism by 25% and assessed penalties to those counties if they were unsuccessful. The program has expanded to 45 counties across Illinois, offering $7 million in funding in 2018 alone.

Pennsylvania

Brief:
HB 135 has seen significant success. It is being expanded with a second phase. Incarceration levels have declined for six of the past seven years, while crime rates have also dropped. Hundreds of millions of dollars have been saved by the state. 

HB 135 (2012):
In 2012, the Pennsylvania General Assembly passed HB 135, a comprehensive criminal justice reform bill that included a PIF program.⁷ From the savings calculated under the parameters of HB 135, 75% of the savings are appropriated to the PIF program, but not to exceed $21,000,000. From that fund, $1,000,000 is distributed to the Pennsylvania Commission on Crime and Delinquency for programs relating to victims of crimes. $400,000 is distributed to establish models for risk assessment in sentencing. Of the remaining funds, 43% goes to grants for innovative policing, overseen by the Commission on Crime and Delinquency; 21% goes to implement contracts with counties for offender diversion; 26% goes to fund grants for county probation improvement; 6% goes to costs related to streamlining the State parole process; and 4% goes to support implementation, outreach, and use of community organizations. If additional counties participate to a degree that exceeds the amount authorized, then the General Assembly may appropriate additional funds. The remaining 25% of savings are also to be used in the fund between 2015–2018.

HB 135 (2012):
In 2012, the Pennsylvania General Assembly passed HB 135, a comprehensive criminal justice reform bill that included a PIF program.⁷ From the savings calculated under the parameters of HB 135, 75% of the savings are appropriated to the PIF program, but not to exceed $21,000,000. From that fund, $1,000,000 is distributed to the Pennsylvania Commission on Crime and Delinquency for programs relating to victims of crimes. $400,000 is distributed to establish models for risk assessment in sentencing. Of the remaining funds, 43% goes to grants for innovative policing, overseen by the Commission on Crime and Delinquency; 21% goes to implement contracts with counties for offender diversion; 26% goes to fund grants for county probation improvement; 6% goes to costs related to streamlining the State parole process; and 4% goes to support implementation, outreach, and use of community organizations. If additional counties participate to a degree that exceeds the amount authorized, then the General Assembly may appropriate additional funds. The remaining 25% of savings are also to be used in the fund between 2015–2018.

In 2010, Pennsylvania’s prison population was projected to grow to approximately 60,000 inmates by 2017. Since HB 135’s introduction, DOC’s prison population has declined in six of the last seven years, and 2018 saw the largest decline in the state’s history to 47,370. At the same time, crime rates have decreased. Between 2012 and 2016, DOC reports Pennsylvania’s crime rate dropped by more than 18 percent. In addition, DOC estimates a $400 million cost avoidance in 2017-18 due to the reforms in HB 135 and the reduction in prison population.⁸

Kansas

Brief:
SB 14 is a different kind of PIF, which uses grants to incentivize reductions in supervision revocations. In the first year, revocation rates dropped 21.9%. In three years, the statewide revocation rate dropped 25%, well beyond the 20% goal.⁹ Not all agencies met their goal, but most showed considerable progress. Because of this success, the parameters of the incentive changed, and any agency that had a 75% completion rate was eligible for the grant.

SB 14 (2007):
The earliest of the PIF programs, the Legislature of the State of Kansas enacted SB 14 in 2007.¹⁰ The goal of the grant program was to reduce the revocation rate of community supervision by 20%. The program is open to any counties that operate community correctional services, with priority given to counties in which the revocation rate of offenders on community supervision is higher than the statewide average. These prioritized counties, however, must have target reductions greater than the minimum 20%. Unlike other state programs, it is not tied to savings associated with the reforms.

Ohio

Brief:
HB 86 is similar to Kansas’s grant model. Nearly 2,900 people were averted from prison over four years, and Ohio is looking to expand its justice reinvestments due to this success.

HB 86 (2011):
In 2011, the Ohio General Assembly created a PIF program through HB 86, an omnibus reform.¹¹ The DRC administers the probation improvement grant program and the probation incentive grant program. The probation improvement grant provides funding to counties and municipalities to adopt evidence-based policies and practices in an effort to reduce the number of supervised individuals whose probation is revoked. The allocation of the subsidy is based on the number of offenders placed on probation annually in the jurisdiction. The probation incentive grant provides performance-based funding to counties and municipalities that are successful in reducing the number of supervised individuals whose probation is revoked. Under the rules governing this incentive program:

“The department shall calculate annually any cost savings realized by the state from a reduction in the percentage of people who are incarcerated because their terms of supervised probation were revoked. The cost savings estimate shall be calculated for each jurisdiction served by the probation department or community-based correctional facility eligible for a grant under this section and be based on the difference from the average of such commitments from the five calendar years immediately preceding the calendar year in which application for the grant was made and the fiscal year under examination.”¹²

This program is estimated to have successfully averted nearly 3,000 people from prison in its first four years. In 2017, Ohio created the Justice Reinvestment Committee to explore policies similar to HB 86’s PIF program.¹³

Not Funded

Arizona

Brief:
SB 1476 achieved results in its first year, but was never funded and later repealed. Some of these results likely stemmed from the expectation of funding.

SB 1746 (2008):
A substantial criminal justice reform was passed by the Arizona Legislature in 2008: SB 1476.¹⁴ Under this law, the board of supervisors designated a chief fiscal officer who established and administered a probation services fund that included county and state appropriations. In addition to those appropriations, the probation services fund would also include calculated savings from reductions in probation revocation and crime. Annually, the Joint Legislative Budget Committee would calculate the cost savings from reductions in the percentage of supervised individuals whose probation is revoked and who are imprisoned or placed in a probation violation center.

The adult probation services fund of each county is appropriated up to 50% of that calculated cost savings. 20% of that calculated savings is appropriated if the percentage of revoked probations is reduced; 20% of that calculated savings is appropriated if the number of individuals on probation who are convicted of a new crime is reduced; and 10% of that calculated savings is appropriated if there is no reduction in the rate of collection of victim restitution payments for individuals on probation.

By 2011, this reform was repealed after never receiving funding in its three-year existence. Recidivism rates in the state did, however, decline in those years, possibly due to the expectation of incentive funding that never was appropriated.¹⁵

Arkansas

Brief:
SB 750 was never funded, but it achieved impressive reductions in prison and jail populations. Like Arizona, this was likely due to the expectation of funding.

SB 750 (2011):
The Performance Incentive Act was passed by the Arkansas General Assembly in 2011, amending the Arkansas Code Title 16 by adding Chapter 99 Performance Incentive Funding for Recidivism and Crime Reduction. Section 117 of the Performance Incentive Act mandates that state agencies, counties, or judicial districts that have implemented “proven risk-reduction strategies” are monetarily rewarded for doing so.¹⁶

The Department of Community Correction (DCC) would distribute the funds. At least one-third of the funds received by the DCC through cost savings must be distributed to the individual probation or parole areas responsible for the reductions in parole revocations. The DCC can fund up to five local programs who apply through a competitive grant process overseen by the Board of Corrections. Four of these five programs must be jurisdictions with the largest number of annual commitments provided they submit an acceptable application, and one of the five must be a rural jurisdiction provided they too submit an acceptable application. New programs are eligible for a one-time grant not contingent on measured performance, but any future funding through the program is tied to measured performance. Grant recipients are entitled to 50% of the averted costs from their programs. The DCC is also required to collect data on these programs and report that information to the Board of Corrections.

No funding was rewarded, but there were results in the first year. From FY 2006 to FY 2010, Arkansas’s population increased more than 3 percent each year, growing to 16,204 in FY 2010, a 7 percent increase from the previous year. In FY 2011, that trend reversed. From FY 2011 to FY 2012, Arkansas’s prison population decreased by 9 percent, from 16,108 to 14,654 inmates. A corollary to the reduction in Arkansas’s prison population is the reduction in its jail backlog; that is, the number of state prisoners held in county jails owing to lack of prison capacity. In FY 2012, the average jail backlog was 637 inmates, a dramatic decrease from an average backlog of 1,613 in FY 2011.¹⁷

Kentucky

Brief:
HB 463 was never funded and the corrections situation in Kentucky has only gotten worse. The program relied on a complicated grant program that was likely not understood, and thus results were not achieved even without the funding in the first year.

HB 463 (2011):
A substantial reform of Kentucky corrections was passed with bipartisan support in the Kentucky General Assembly in the 2011 session: HB 463.¹⁸ One part of this reform was the creation of a PIF program for the state. Each biennium, the cost savings resulting from amendments to or creation of the statutes contained in the provisions of HB 463 would be calculated. These calculated savings would be reinvested and distributed to the (then-created) local corrections assistance fund in the amount of 25%. This corrections assistance fund is then used to fund up to ten pilot projects approved by the Kentucky State Corrections Commission, five of which must be programs in judicial circuits with high rates of imprisoned offenders, and five of which must be programs with high rates of supervised individuals who are revoked for violations and thus imprisoned or re-imprisoned. Under such programs, 50% of any state expenditure savings are deposited into a separate community corrections fund, and 50% goes into the state’s general fund. These funds would supplement but not supplant appropriations for probation, parole, or community corrections programs.

This program was never funded, and incarceration levels in Kentucky have not improved.

South Carolina

Brief:
South Carolina’s program was never funded, but it did achieve success not only in the first year, but over most of the past ten years. Even so, the legislature has never funded the incentives despite the recommendation of the oversight body.

SB 1154 (2010):
The South Carolina General Assembly passed the Omnibus Crime Reduction and Sentencing Reform Act, SB 1154, in 2010.¹⁹ Section 62 amends Title 24 of the 1976 Code to add Chapter 28, which creates a Sentencing Reform Oversight Committee to calculate cost saving resulting from reductions in supervision revocation. The committee terminated in 2015, but it produced three expenditure savings reports available to the public. SB 1154 did not mandate that any expenditure savings be appropriated to the South Carolina Department of Probation, Parole, and Pardon Services (SCDPPPS), and it does not contain provisions for funding local programs. The committee’s reports were, however, required to issue an unauthoritative recommendation as to whether 35% of cost savings should be appropriated to SCDPPPS by the General Assembly.

Although savings in excess of $6,000,000 were reported in 2015 alone, and despite the recommendation by the committee for SCDPPPS to receive the 35% incentive funding, the South Carolina General Assembly has declined to appropriate the incentive funding created in SB 1154 every year since the committee has issued reports recommending that appropriation.²⁰

Texas

Brief:
Due to financial issues, the 2011 PIF program was not fully implemented and no counties could enroll. The 2005 PIF initiative, however, achieved reductions in technical violations by participating counties, while non-participants saw increases.

Major Reforms:
In 2005, Texas pledged $55 million in incentive-based funding to probation departments that used graduated sanctions to try to reduce technical revocations by 10%. Departments that participated reduced technical violations revocations by 13.4%, while those who did not opt-in increased such revocations by 5.9%.²¹

SB 1055 (2011):
Gave counties the opportunity to enroll in PIF programs for reducing prison populations, reducing recidivism, increasing probationer employment rates, and increasing the number of probationers that provided victim restitution. Counties wishing to qualify for such funding must create commitment reduction plans that achieve these outcomes, after which they are eligible for an award of a one-time lump sum equal to 35% of the savings to the state. In addition, programs that reduce the percentage of supervised individuals who commit a new felony while under supervision are entitled to 15% of the remaining 65% of savings on a biennial basis; programs that increase the percentage of supervised individuals who are not delinquent in making restitution payments are entitled to 5% of the remaining 65% of savings on a biennial basis; and programs that increase the percentage of employment among supervised individuals are entitled to 5% of the remaining 65% of savings on a biennial basis.²² These funds may be used, in addition to any per capita or formula funding, for any program or service that it is authorized to provide.

...

[1] Counties with a return-to-prison rate of over 125% of the statewide failure rate were entitled to 40% of savings if they reduced their population relative to their county return-to-prison rate; counties with a return-to-prison rate of under 125% of the statewide failure rate were entitled to 45% of savings relative to their historical county rates. This funding structure changed in 2015, see appendix for details.
[2] Initial funding was a federal grant under the American Recovery and Reinvestment Act of 2009, which seeded $45 million to the counties. See: Flynn, Kathleen. “Putting Teeth into A.B. 109.” Golden Gate University Law Review, 2013.
[3] See technical appendix 1.
[4] https://www.courts.ca.gov/documents/lr-2017-JC-SB-678-CCC-performance-incentives-act.pdf
[5] SB 1289, Acts of the Illinois General Assembly, Section 20. http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=096-0761
[6] Ibid.
[7] 2012 Act 196, Pennsylvania General Assembly, Section 8.1a–g. https://www.legis.state.pa.us/cfdocs/legis/li/uconsCheck.cfm?yr=2012&sessInd=0&act=196
[8] https://www.commonwealthfoundation.org/policyblog/detail/an-overview-of-justice-reinvestment-initiative-ii
[9] https://www.doc.ks.gov/community-corrections/news/2010-risk-reduction-initiative-report-sb14/view
[10] SB 14, Acts of the Legislature of the State of Kansas, Section 1. http://www.kansas.gov/government/legislative/bills/2008/14.pdf
[11] Chapter 5149.311, Title 51, Ohio Revised Code.http://codes.ohio.gov/orc/5149.311
[12] Chapter 5149.311, Title 51, Ohio Revised Code. Division (C)(2).
[13] https://csgjusticecenter.org/jr/oh/
[14] SB 1476, Senate of the State of Arizona, Section 2, Title 12, Chapter 2, Article 7, A–B.https://www.azleg.gov/legtext/48leg/2r/bills/sb1476p.pdf
[15] Vera Institute of Justice. 2012. “Performance Incentive Funding, Aligning Fiscal and Operational Responsibility to Produce More Safety at Less Cost.” Pg. 21.
[16] SB 750, Acts of the Arkansas General Assembly, Section 117, pg. 157. http://www.arkleg.state.ar.us/assembly/2011/2011R/Acts/Act570.pdf
[17] https://www.urban.org/sites/default/files/publication/22211/412994-Justice-Reinvestment-Initiative-State-Assessment-Report.PDF
[18] HB 463, Acts of the Kentucky General Assembly, Chapter 2, Sections 67–74, pg. 37–42. https://apps.legislature.ky.gov/law/acts/11RS/documents/0002.pdf
[19] SB 1154, Acts of the South Carolina General Assembly, Part II, Section 44.https://www.scstatehouse.gov/sess118_2009-2010/bills/1154.htm
[20] Sentencing Reform Oversight Committee, State Expenditure Savings Reports. https://www.scstatehouse.gov/citizensinterestpage/SentencingReformOversightCommittee/SROC.php
[21] https://files.texaspolicy.com/uploads/2018/08/16103231/2016-11-PP27-IncentivizingResults-CEJ-GregGlod.pdf
[22] SB 1055, Legislature of the State of Texas, Section 6. https://capitol.texas.gov/tlodocs/82R/billtext/html/SB01055E.htm         

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