If Oregon's legislature cuts funding for the state/county community corrections partnership, can counties walk away from supervising felony offenders and hand them back to the state?

Subject

Steven Marks, Chief of Staff to Governor Kitzhaber

Plain-English summary

In 1995, facing a projected surge in inmates serving Measure 11 mandatory-minimum sentences, the Oregon legislature passed Senate Bill 1145. The bill restructured community corrections so that counties took responsibility for supervising felony offenders on parole, probation, and post-prison supervision, in exchange for a statutorily prescribed level of state funding. The arrangement included a county "opt-out" provision that let counties pull out of the partnership if certain conditions were met.

By early 2002, Oregon faced a serious budget shortfall. The legislature had already cut $1 million from the 2001-03 community corrections appropriation in a special session. The Governor's office wanted to know whether a further legislative action, eliminating the 3.5% inflation adjustment that had been built into the biennial appropriation, would trigger the SB 1145 opt-out and allow counties to hand the supervision responsibilities back to the state.

The AG concluded the proposed change would not trigger the opt-out. The statutory baseline was the current service level, including an inflation adjustment at least equal to the one approved for ODOC's state corrections programs and services. Because the legislature had given those programs a zero inflation adjustment for 2001-03, it could reduce the community corrections appropriation to reflect zero inflation for the remaining months without triggering the opt-out.

The opt-out remained available if a future appropriation fell below the statutory current service level. A community corrections inflation adjustment smaller than the one approved for ODOC's state corrections programs could bring the appropriation below that baseline. The AG's conclusion addressed the specific proposed rebalance in a biennium when state corrections programs received no inflation adjustment.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Community corrections funding and the SB 1145 structure have been adjusted multiple times since. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

How did inflation affect the funding baseline for counties? The AG read the current service level to include an inflation adjustment at least equal to the one approved for ODOC's state corrections programs and services. The legislature had approved zero inflation for those programs in 2001-03, so a zero adjustment for community corrections would meet that part of the baseline.

What would have triggered the county opt-out?
A total state community corrections appropriation below the current service level defined in ORS 423.483 would allow a county to discontinue participation after written notice. That baseline includes an inflation adjustment at least equal to the one approved for ODOC's state corrections programs and services.

Would the proposed elimination of the inflation adjustment let counties opt out? No. The opinion concluded that the proposed reduction would not bring the community corrections appropriation below the statutory current service level, because state corrections programs had received no inflation adjustment. It did not address whether counties could stop performing while remaining in the program.

Why was the AG asked this question?
Because the answer mattered for legislative planning. If the inflation cut would let multiple counties exit, the state would have to absorb the community corrections workload directly, which could cost more than the savings from the cut. The AG's conclusion that the opt-out would not trigger gave the legislature room to proceed with that specific rebalance approach.

What would happen if a future cut did trigger the opt-out? Counties that chose to opt out would return the responsibility for felony offender supervision to the state. The state, through ODOC, would then have to absorb the workload, including hiring or contracting for supervision staff and managing the affected offenders directly. That outcome was generally more expensive than maintaining the partnership.

Background and statutory framework

SB 1145, enacted as Or Laws 1995 ch. 423, restructured community corrections in Oregon. The legislation was a response to projected increases in state prison demand from Measure 11 mandatory minimums. Rather than keep all community supervision at the state level, the legislature shifted responsibility for felony offenders on parole, probation, and post-prison supervision to the counties, with state funding through a grant-in-aid program now codified at ORS 423.530.

The state/county partnership was structured around a baseline funding level. The legislature appropriated $195,555,286 to ODOC for the 2001-03 biennium for community corrections grants under Or Laws 2001 ch. 631 § 1. That appropriation included a 3.5% inflation adjustment. The remainder of ODOC's appropriations did not include any inflation adjustment.

In early 2002, the legislature held two special sessions to rebalance the state budget. Or Laws 2002 ch. 2 § 1 cut the community corrections appropriation by $1 million. The hypothetical the Governor's office asked about was a further reduction eliminating the inflation adjustment entirely, leaving the community corrections grant flat.

The opt-out provision in ORS 423.483 allowed counties to withdraw from the partnership under defined conditions tied to the state's failure to provide statutorily required funding. ORS 423.483(2) lets a county discontinue participation, on 180 days' notice, if the total state community corrections appropriation falls below the baseline "current service level" defined in ORS 423.483(3). The AG applied the PGE methodology to interpret the trigger.

Citations

• ORS 423.475 to 423.560 (SB 1145 community corrections framework)
• ORS 423.530 (state grant-in-aid program)
• ORS 423.483 (county opt-out provision and "current service level" baseline)
• ORS 423.478(2) (offenders covered by the partnership)
• Or Laws 1995 ch. 423 (SB 1145 enactment)
• Or Laws 2001 ch. 631 § 1 (2001-03 community corrections appropriation)
• Or Laws 2002 ch. 2 § 1 (first 2002 special-session rebalance)
• PGE v. Bureau of Labor and Industries, 317 Or 606 (1993) (statutory interpretation)

Source

• Landing page: https://www.doj.state.or.us/oregon-department-of-justice/office-of-the-attorney-general/attorney-general-opinions/
• Original PDF: https://www.doj.state.or.us/wp-content/uploads/2002/04/op2002-3.pdf

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

April 3, 2002

Steve Marks, Chief of Staff to Governor Kitzhaber
Office of the Governor
State Capitol
Salem, OR 97310
Re:

Opinion Request OP-2002-3

Dear Mr. Marks:
This letter responds to your request for advice regarding the county “opt out” provision enacted as part of Senate Bill 1145 (1995). Specifically, you have asked whether counties could withdraw from the SB 1145 state/county community corrections partnership if the Legislative Assembly were to enact a new budget law as part of a budget rebalance plan that reduces ODOC’s line item appropriation for community corrections to reflect a zero adjustment for inflation for the remaining months of the current biennium. We conclude that the counties could not withdraw on the basis of the suggested legislative action. Discussion 1.

Funding of Community Corrections Under SB 1145

In 1995, facing projections of significantly increased demand for state secure facilities to incarcerate offenders sentenced to lengthy mandatory minimum sentences under Measure 11, the Legislative Assembly enacted legislation that had the effect of restructuring statewide community corrections supervision and services. Or Laws 1995, ch 423. As part of that restructuring, the legislation, referred to collectively as SB 1145, established a partnership between the state and counties in which the counties assumed responsibility to provide community-based supervision, sanctions and services for felony offenders on parole, probation or post-prison supervision in exchange for a statutorily-prescribed level of state funding. ORS 423.475 to 423.560. For the 2001-03 biennium, the Legislative Assembly appropriated $195,555,286 to ODOC for the purpose of providing community corrections grants to the counties under the SB 1145 grant-in-aid program described in ORS 423.530. Or Laws 2001, ch 631, §1. ODOC officials advise that this appropriation included a 3.5% adjustment for inflation for the current biennium. ODOC officials further advise that none of the remainder of ODOC’s appropriations included an inflation adjustment.

1162 Court Street NE, Salem, OR 97310 Telephone: (503) 378-4620 Fax: (503) 378-3784 TTY: (503) 378-5938

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 2

In the second of two special sessions held in February and March of this year, the Legislative Assembly reduced the 2001-03 biennial appropriation to ODOC for community corrections grants to counties by $1,000,000. Or Laws 2002, ch 2, §1. It is possible that the Legislative Assembly, at a future special session, could further reduce the appropriation for community corrections to reflect a zero adjustment for inflation for the remaining months of the biennium. In order to advise you in this matter, we must interpret the meaning and legal effect of the SB 1145 county opt out provision in the context of the suggested budget rebalance plan. When interpreting statutes, our task is to discern the intent of the legislature. PGE v. Bureau of Labor and Industries, 317 Or 606, 610-612, 859 P2d 1143 (1993) (outlining methodology for interpreting a statute). In doing so, we must first examine the text and context of a statute because the wording of a statute “is the best evidence of the legislature’s intent.” PGE, 317 Or at

610. A statute’s context may include other provisions of the same statute and related statutes, id.
     at 610-11, and prior enactments and prior judicial interpretations of that statute and related statutes, Owens v. Maass, 323 Or 430, 435, 918 P2d 808 (1996). Only if the intent of the legislature is not clear from the first level of analysis may legislative history be considered. PGE, 317 Or at 611. 2.

Legislative Discretion to Adjust for Inflation in Determining Current Service Levels

The county opt out provision at issue is codified at ORS 423.483. That statute states: (1) The baseline funding for biennia beginning after June 30, 1999, is the current service level for the expenses of providing management, support services, supervision and sanctions for offenders described in ORS 423.478(2). At a minimum, each biennium's appropriation must be established at this baseline. (2) If the total state community corrections appropriation is less than the baseline calculated under subsection (1) of this section, a county may discontinue participation by written notification to the director 180 days prior to implementation of the change. If a county discontinues participation, the responsibility for correctional services transferred to the county, and the portion of funding made available to the county under ORS 423.530 reverts to the Department of Corrections. In no case does responsibility for supervision and provision of correctional services to misdemeanor offenders revert to the department. (3) As used in this section, “current service level” means the calculated cost of continuing current legislatively funded programs, phased in programs and increased caseloads minus one-time costs, decreased caseloads, phased out programs and pilot programs with the remainder adjusted for inflation as determined by the Legislative Assembly in its biennial appropriation to the Department of Corrections.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 3

By its terms, ORS 423.483 permits a county to withdraw from the SB 1145 state/county community corrections partnership only if the total state community corrections appropriation is less than “the calculated cost of continuing current legislatively funded programs, phased in programs and increased caseloads minus one-time costs, decreased caseloads, phased out programs and pilot programs with the remainder adjusted for inflation as determined by the Legislative Assembly in its biennial appropriation to the Department of Corrections.” (Emphasis added.) a.

Text and Context

Under the statutory definition of “current service level” contained in ORS 423.483(3), within the state’s baseline funding obligation it is left to the Legislative Assembly’s discretion to determine the cost of funding statewide community corrections programs and services at current levels through the legislative appropriation process. Without the final clause of ORS 423.483(3) the Legislative Assembly would nonetheless have the authority to account for inflation in calculating a “current service level.”1/ Nothing in the text of the final clause binds the Legislative Assembly to rely upon or adopt any particular inflation index or other economic indicator as a measure of inflation. Under the rules of statutory interpretation, it is necessary to ascribe meaning to all parts of a statute. See Owens, 323 Or at 435 (citing general rule of construction in ORS 174.010 that, when construing a legislative enactment, we may not "insert what has been omitted" nor "omit what has been inserted."). Because the final clause of ORS 423.483(3) provides the Legislative Assembly with no greater authority than it normally holds under the appropriation process, we look for meaning in the direction that the inflation adjustment be in the “biennial appropriation to the Department of Corrections.” The legislature may have intended this language simply to direct where the money for community corrections grants would appear within its appropriations enactments. Alternatively, the phrase may be read to qualify or limit the Legislature’s discretion to set the amount or rate of any inflation adjustment in the community corrections appropriation by tying that determination to the inflation rate or amount established for ODOC corrections programs and services. Because we are unable to conclusively discern the legislature’s intent from our examination of the statute’s text and context, we turn to the second level of analysis, which is to consider the legislative history of ORS 423.483. See PGE, 317 Or at 611-12. b.

Legislative History

Following its introduction in the Senate Judiciary Committee, SB 1145 was referred to the Joint Committee on Ways and Means. Most of the substantive work and consideration of the bill took place in the Ways and Means Committee’s Special Subcommittee on Corrections. Legislators and witnesses discussed the subject of what constituted “baseline” funding of state community corrections and the county opt out provision on several occasions during the subcommittee’s consideration of the bill.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 4

During an early subcommittee hearing on proposed amendments to the bill, in response to a question from the Subcommittee Chair, Senator Neil Bryant, Bill Carey of the Department of Corrections explained: Carey: That section [Section 6 of the proposed A5 amendments to SB 1145] deals with the opt out that people are concerned about for the counties. Unless the state reduces funding below current service level, counties will not have an option to opt out. They are in the partnership as long as we can continue our level of funding as described by current service fund. Chair Bryant: When it says "with the remainder adjusted for inflation," what type of inflation measure do you use? Carey: Mr. Chair, it would be the inflation that the legislature approves in a budget. Testimony of Bill Carey, Joint Committee on Ways and Means, Special Subcommittee on Corrections, (SB 1145), May 16, 1995, tape 3, side A, at 214 (emphasis added). In a later hearing, the subcommittee continued consideration of, and adopted, bill amendments containing a revised definition of “current service level.” That definition, which was incorporated in section 6 of the A6 amendments to SB 1145, is the definitional language that ultimately was enacted and is now codified in ORS 423.483(3). The new language that was added to the definition was the phrase, “as determined by the Legislative Assembly in its biennial appropriation to the Department of Corrections.” In the subcommittee hearing, Sue Acuff, then a fiscal analyst with the Legislative Fiscal Office who staffed SB 1145 for the subcommittee, explained the intended purpose of the clarifying amendment: Sue Acuff: Okay, the opt out provisions are still in the bill. The current service level is becomes – what you use to determine future funding. And that’s defined as the calculated cost of continuing current legislatively funded programs, phased in programs and increased caseloads minus one-time costs, decreased caseloads, phased out programs and pilot programs with the remainder adjusted for inflation. And the A6 amendments clarify the inflation rate is the one – the same as that approved for the Department of Corrections. And the last part of it there - if the appropriation is less than the resulting calculation the county can give the responsibility back to the state. Testimony of Sue Acuff, Joint Committee on Ways and Means, Special Subcommittee on Corrections, (SB 1145), June 2, 1995, tape 11, side B, at 451-469 (emphasis added).

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 5

Finally, an exhibit referencing the A6 amendments to SB 1145 was presented and received by the subcommittee during its consideration of the amendments.2/ That exhibit echoes Ms. Acuff’s testimony regarding the intended meaning and purpose of the definitional change to “current service level” incorporated in the A6 amendments:

Establishment of funding baseline and “opt out” provisions.
•
•

•
•

The baseline funding for future biennia is established as the current service level for the expenses of providing management, support services, supervision and sanctions for all offenders described in section 9(2) of the act. The current service level is defined as the calculated cost of continuing current legislatively funded programs, phased in programs, and increased caseloads, minus one-time costs, decreased caseloads, phased out programs and pilot programs, with the remainder adjusted for inflation. The A6 amendments clarify the inflation rate is to be the same as that approved by the Legislature for the Department of Corrections. If the appropriation is less than the resulting calculation the county can give the responsibility back to the state.

Joint Committee on Ways and Means, Special Subcommittee on Corrections, (SB 1145), June 2, 1995, exhibit entitled “SENATE BILL 1145 – COMMUNITY CORRECTIONS RESTRUCTURE” (emphasis added). The foregoing legislative history demonstrates that the legislators involved in the Ways and Means subcommittee work on SB 1145 intended that within the state’s baseline funding obligation for purposes of the “opt out” provision the legislative determination of the amount of an inflation adjustment in the community corrections appropriation, if any, be the same as that approved by the Legislative Assembly for state corrections programs and services in its biennial appropriation to the Department of Corrections. Although isolated statements of witnesses made in committee are not necessarily indicative of the intent of the entire legislature, in view of the fact that we have found no suggestion, either by a legislator or any witness in committee, that SB 1145 was intended to have any different effect, and because the vast majority of the substantive work and consideration of the bill’s provisions took place in the subcommittee in which the witnesses testified and the exhibit was presented, those comments and exhibit are significant. See Davis v. O’Brien, 320 Or 729, 740-46, 891 P2d 1307 (1995). We conclude, therefore, that the legislative history supports a construction of the statute that a county may not “opt out” of providing community corrections services when the legislature provides an inflation adjustment in its biennial appropriation to ODOC for community corrections that is at least equal to that provided in its biennial appropriation to ODOC for state corrections programs and services.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 6

3.

Conclusion

Because the Legislative Assembly provided a zero inflation adjustment for state corrections programs and services in its 2001-03 biennial appropriation to ODOC, we conclude that the Legislative Assembly may enact a new budget law in a future special session that further reduces ODOC’s line item appropriation for community corrections to reflect a zero adjustment for inflation for the remaining months of the current biennium, without triggering the statute’s “opt out” provision for counties under ORS 423.483. Sincerely,

Donald C. Arnold
Chief Counsel
General Counsel Division
DCA:jvv:naw/GENA8961

1

This is so because a determination of the “calculated cost of continuing current legislatively funded programs” necessarily includes consideration of whether those costs are projected to be higher or lower in the coming biennium due to inflation. 2 It appears from the nature of the exhibit that it was prepared by and presented to the chair and members of the subcommittee by subcommittee staff as a summary of the key policy choices embodied in the proposed amendments and as a guide to moving the amendments for adoption by the subcommittee.