The Real Costs of Jessica's Law: Deconstructing the Fiscal Note for HB 8

Now that the Texas Legislature has begun its biennial ritual of passing new penalty enhancements, it's time for Grits to begin hashing through the various ways in which costs for these penalty hikes are systematically low-balled when calculating the state budget.

A great example may be found in the fiscal note for Jessica's Law, HB 8, which passed out of the Criminal Jurisprudence Committee yesterday at a surprise meeting called immediately after the House adjourned.

I should begin, though, by acknowledging that the Legislative Budget Board (LBB) appears to have made a signficant improvement in their method of calculating fiscal notes. In the past, when the Lege increased sentences on more serious crimes, LBB routinely gave the bills "zero fiscal notes," which means they predicted no new costs must be added to the state budget to accomodate them. That's because when penalties increase, say, from 15 to 25 years, all of the extra incarceration costs must be borne by future Legislatures, not in the current budget. So legislators could pass penalty increases willy nilly claiming, with LBB's official imprimatur, that their bills would cost taxpayers nothing.

Of course, that's hogwash, especially when EVERY Legislature does the same thing. Over time these enhancements drive new prison building and heighten incarceration pressures in ways that are, in fact, very costly.

So I was glad to see a new twist in HB 8's fiscal note. Yes, they did declare the bill would have no new costs in the first five years, which I think is incorrect. But for the first time in memory, LBB actually calculated those future incarceration expenses and determined that the bill would require Texas to build 489 new prison beds within 20 years. While something tells me even that figure is low-balled (for reasons detailed below), simply attempting to calculate those out-year expenses marks a dramatic improvement in the cost information given to legislators. I congratulate LBB on this change in methodology. Including out-year costs is a helpful, new approach, and I appreciate them addressing this long-time shortcoming in their estimates.

That said, the HB 8 fiscal note still appears to avoid counting nearly all the obvious new costs from the bill. With apologies in advance for the length of this post, here's why:

According to the HB 8 fiscal note, "For fiscal year 2006, the Texas Department of Criminal Justice (TDCJ) received 633 offenders for the offenses of indecency with a child, and sexual performance of a child, where the offense was punishable as a felony of the second degree," approximately 537 of whom committed the offense against someone under 14. These are the numbers upon which LBB based its calculations.

But HB 8 would expand the statute of limitations on these crimes from 10 years after the victim's 18th birthday to 20 years, and LBB's fiscal note estimate does not assume ANY increase in the number of prosecutions resulting from that change. How could that be?

The only reason to expand the statute of limitations is to allow MORE cases to be filed. Even an increase of 10-20% in the number of filed cases, given the long, expensive sentences, would add substantial additional costs, including new costs in the first five years. The only way around that conclusion is to assume that the law will be ineffective, increasing the statute of limitations won't matter, and NO new victims will come forward as a result of the change in the law. If that's true, then why do it?

If the number of filed cases increased just 10%, in the first five years we'd be talking about 250 or so new beds required to house those prosecuted under the expanded statute of limitations. That fact alone makes the idea that only 489 new beds would be required in 20 years seem highly suspect.

Another provision of the bill would require GPS tracking for paroled certain offenders, and again, LBB reports that "The Department of State Health Services has stated that they anticipate no fiscal impact from the provision of the bill further specifying tracking services for civil commitment outpatients."

But GPS tracking is actually quite expensive, not just for the technology but for resources for monitoring offenders. One estimate I've seen found that GPS tracking costs $6-8 per day for "active monitoring," and $4-5 per day for "passive monitoring." HB 8 requires "real time" monitoring, which I assume falls into the "active" category. So whatever the number of offenders required to submit to tracking, by these estimates (depending on the tracking scheme) the state must pay between $2,190 - $2,920 per year. That's cheaper than incarceration, certainly, but it doesn't indicate a fiscal cost of zero.

What's more, GPS tracking makes it more likely an offender will be revoked to prison (since the only reason for it is to more closely supervise offenders to prevent violating parole terms.) But no increase in the number of revocations was tallied to determine the short or long-term costs to the state from more revocations.

As to the penalty increases, I must say I'd really like to see the actuarial details of LBB's "discrete event simulation model that calculates the difference in sentencing and release policy based on whether the offenders are treated as second degree felons or first degree felons." LBB correctly notes that

The provision of the bill that is expected to have the largest and most immediate impact is the provision that would enhance the punishment of the offenses of indecency with a child, and sexual performance by a child, from a felony of the second degree to a felony of the first degree if the victim of the offense is younger than 14 years of age.

I think they're wrong that this would have the most "immediate impact," since the statute of limitations expansion will likely increase incarceration pressures in the near term. But certainly the enhancements will have the greatest long-term effect on the budget.

At the 2006 estimated offense rate (and discounting additional cases from lengthening the statute of limitations) approximately 10,740 offenders will be convicted of these crimes over the next 20 years. The penalty for a second degree felony is 2-20 years, and the penalty for first degree felonies is 5-99. So those 10,000+ offenders will face potentially MUCH longer sentences, with any possibility of parole denied. Given that, although I haven't seen their model to assess its specific calculations, LBB's estimate that HB 8 would only require 489 new beds in 20 years seems to seriously short-change the real cost to taxpayers.

Finally, the fiscal note declares that "No significant fiscal implication to units of local government is anticipated." But that's absurd. While the expansion of the statute of limitations will result in more prosecutions and therefore more local costs, the biggest new cost may be the expansion of the death penalty to include child molestation. Capital cases are incredibly expensive, and many counties can barely afford to pursue them. According to this analysis, "In Texas, the Dallas Morning News concluded that a death penalty case costs an average of $2.3 million, about three times the cost of imprisoning someone in a single cell at the highest security level for 40 years."

So let's say five counties per year pursue the death penalty once for this type of crime (or perhaps more likely, that no one else does and Harris County goes for it five times annually) - the cost by these estimates would be more than $11.5 million, or three times higher than if the same defendants received live without parole. If ten more capital cases are pursued, the cost would be double that.

So where does the zero come from?

For all these reasons, LBB's Fiscal Note lowballs the cost of HB 8. These estimates are highly political because everyone knows a high fiscal note makes a bill less likely to pass in a tight budget environment. In this case, Jessica's Law might be such a political hot potato that legislators would spend any price to avoid appearing to oppose it. Even so, I wish they were given more realistic cost estimates in case SOMEBODY found the courage to address the many problems with this bill.

See prior, related Grits coverage:

• Innocence reforms needed to make sex offender law palatable
• Sex offender Tuesday in House Criminal Jurisprudence
• House Corrections Committee: Community-based treatment more effective for sex offenders
• When tough on crime is hard on the coffers
• Victim advocates oppose sex offender enhancements
• Unintended consequence: Why the death penalty for repeat child molesters would harm children's safety