U.S. Department of Justice Office of Justice Programs Bureau of Justice Statistics Technical Report Justice Expenditure and Employment Statistics Justice Variable Passthrough Data, 1997 Sidra Lea Gifford BJS Statistician Stephen D. Owens Chief, Public Finance Analysis Branch U.S. Census Bureau November 2001, NCJ 190359 --------------------------------------------------------- This file is text only without graphics and many of the tables. A Zip archive of the tables in this report in spreadsheet format (.wk1) and the full report including tables and graphics in .pdf format are available from: http://www.ojp.usdoj.gov/bjs/abstract/jvpd97.htm This report is one in a series. More recent editions may be available. To view a list of all in the series go to http://www.ojp.usdoj.gov/pubalp2.htm#Justice Variable Passthrough Data. ----------------------------------------------- ----------------------------------------------- Highlights The State share of expenditures for justice has increased from 29% in 1971 to 41% in 1997 * In 1997 State and local governments spent $103 billion of their own-source revenues on police, prosecution and judicial activities, and corrections. * Local governments spent more on justice functions than did State governments. In 1997 the national ratio of local to State spending was 59% to 41%. * The State with the lowest variable passthrough (VPT) percentage was Alaska, with 24% being passed through to the local governments. * The State with the highest VPT percent was Nevada, with a local share of 72%. * Since 1990, the last year in which the VPT was calculated, the percent required for passthrough to the local governments has increased slightly, from 57% to 59%. * In Nevada, Pennsylvania, and Tennessee, the impact of the new VPT will be greatest. The amounts of their Byrne Formula awards that must be passed through to local govern- ments will increase by more than 20%. ----------------------------------------------- BJS provides the variable passthrough (VPT) data for use in the Edward Byrne Memorial State and Local Law Enforcement Assistance Programs authorized by the Anti- Drug Abuse Act of 1988, as amended (Public Law 90-351). The Byrne program focuses on assisting State and local law enforcement with the control of violent and drug-related crime and serious offenders, in support of national drug-control priorities (box on page 2). The Byrne program includes a discretionary grant program and a block grant program. This report describes the development of data used to compute the block grant formula. According to Public Law 90-351, the formula for distributing block grant funds to the States is based on each State's percentage of the total US population; the VPT data indicate how funds are to be distributed to State agencies compared to the localities within each State. In conjunction with the BJS Justice Expenditure and Employment Statistics Program, BJS estimates VPT distributions by conducting the Justice Assistance Data Survey (JADS) periodically, most recently in 1997. Features of the block grant program Eligibility Under Public Law 90-351, the 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands are each considered eligible State-level jurisdictions. In addition, the Territories of Guam, American Samoa, and the Northern Mariana Islands share a State allocation. --------------------------------------- Byrne Program purposes Grants may be used to provide personnel, equipment, training, technical assistance, information systems, victim assistance, prosecution and adjudication services, detention, and rehabilitation. Byrne Program mandates * States must use at least 5% of their formula grant awards for the improvement of criminal justice records. * States must develop methods to notify the U.S. Immigration and Naturalization Service (INS) of alien convictions and to provide records of those convictions to INS. * States must enact and enforce a law that requires sex offenders to be tested for HIV if the victim requests such testing. * States must establish 10-year registration requirements for persons convicted of certain crimes against minors and sexually violent offenses and a more stringent set of registration requirements for sexually violent predators. For more information about the Byrne Program, see Bureau of Justice Assistance's Fact Sheet Edward Byrne Memorial State and Local Law Enforcement Assistance (July 2001). ------------------------------------------------ Eligible local governments include "any city, county, township, town, borough, parish, village, or other general purpose political subdivision of a State, any law enforcement or judicial enforcement district that is established under applicable State law; and has the authority to, in a manner independent of other State entities, establish a budget and impose taxes, an Indian tribe that performs law enforcement functions as determined by the Secretary of the Interior, or, for the purpose of assistance eligibility, any agency of the government of the District of Columbia or the Federal Govern- ment that performs law enforcement functions in and for the District of Columbia, or any the Trust Territory of the United States.***Footnote 1: As defined in Public Law 90-351 sec. 901 (a)(3).*** Formula Public Law 90-351 contains a formula for distributing the funds available for block grants to the States. In general, this formula -- * Reserves some funds for Bureau of Justice Assistance discretionary grants and administrative costs * Awards to each State a base amount of money specified in the legislation (0.25% of the total allocation) * Allocates the remaining funds to each State according to its percentage in the total U.S. population * Requires a minimum passthrough amount to local governments based on the percentage of funds expended by units of local government relative to the total State and local criminal justice expenditure in the State. The specific features of the formula used to distribute the block grants among States have changed several times since 1968 when Public La w 90-351 was enacted. This report provides the basis for the amount of Federal funds retained at the State level and the amount distributed to local jurisdictions within the State. Calculation of the variable passthrough percentages The Justice Expenditure and Employment Series and the JADS, which produce the VPT data, collect extensive, detailed data for three justice functions (police protection, judicial and legal, and corrections) and for three character and object classes (current operations, capital outlay, and intergovernmental expenditure). Public Law 90-351 indicates that expenditures used in the calculation of variable passthrough percentages are to be from a government's "own revenue sources." Thus, a government would not benefit from spending another government's money, as in revenue from payments for boarding prisoners. Expenditures from sales or property tax revenue are included; amounts expended from intergovernmental revenue, such as Federal grant monies, are excluded. The computation of own-sources expenditure involves summing certain character and object classes of expenditure within each State. From this total are subtracted certain revenue amounts for the State government and for the aggregate of local governments within the State. In general, the own-sources computations assume that all intergovernmental payments received by a government will be expended during the same fiscal year. While every jurisdiction did not spend all the money received, the total generally balanced out because some jurisdictions spent money received in 1996 while others did not spend all money received in 1997. The local government totals within a State are actual amounts based on the 1997 Census of Governments. The Federal revenue amounts received by local governments are actual 1997 amounts received during the Federal fiscal year which ran from October 1, 1996, through September 30, 1997. These amounts were derived from the Federal Assistance Award Data System (FAADS) developed by the Census Bureau. The local government own-sources calculation -- * Use actual expenditures for all local governments in the State * Use actual Federal revenue amounts received by all local governments * Use the actual amount of payments made by the State government to local governments according to State records * Do not use intergovernmental expenditures between local governments within the State (which would result in double-counting). 1997 variable passthrough percentages In fiscal 1997 the VPT share for local governments ranged from 24% in Alaska to 72% in Nevada. Conversely, the State share in these States ranged from 76% in Alaska to 28% in Nevada. Most States showed less dramatic differences between the State and local share: the national ratio was 59.2% local to 40.8% State. The organization of criminal justice functions in each State can affect the ratio of State-to-local own-sources expendi- ture. For instance, State governments with low VPT percentages tend to have more criminal justice services at the State level relative to States where similar services are delivered at the local level. Alaska, with a State share of 76%, Delaware with 73%, Vermont with 71%, and Connecticut with 62% are examples of States in which the majority of courts, public defense systems, and correctional systems are funded at the State level. ------------------------------------------------- Examples of own-source revenues Taxes Property General sales Motor vehicle license Motor fuel Income (individual and corporate) Death/gift Utility revenue Liquor store revenue Insurance trust receipts for: Employee retirement Unemployment compensation Charges and fees Parking Sanitation Parks and recreation Airport Toll roads Hospital fees College tuition Special assessments Interest earnings Sale of government property Bond issue proceeds Examples of revenues not from own- sources Federal payments received for: Housing Federal prisoners Police overtime in emergencies State assistance payments received for: Aid to local police Aid to local corrections State or local payments received for: Housing another government's prisoners Providing police protection to another government Training another government's justice personnel Federal grants Juvenile justice grants Anti-drug abuse grants Alcohol safety program Child support enforcement Research participation Victim assistance ------------------------------------------------ ----------------------------------------------- Coumputing own-source expenditure for State governments A State government's total justice expenditure is derived by summing the State government's justice expenditures for -- Current operations Capital outlay Intergovernmental expenditure to local governments. To produce the State government's own-sources expenditure, the following are deducted from the total: Justice revenue received directly from the Federal Government Local justice payments to the State government Cumputing own-source expenditure for local governments The total justice expenditure for all local governments in a State is derived by summing the total local justice expenditures for-- Current operations Capital outlay Intergovernmental expenditure to the State. To produce own-sources expenditure for all local governments in the State the following are deducted from the total: Revenue directly from the Federal Government and earmarked for justice purposes State payments to local governments for justice purposes, including Federal grants "passed through" to the State government ---------------------------------------------------- Why variable passthrough percentages change In fiscal 1990, the last year in which these data were calculated, the VPT percentage for local governments ranged from 22% in Alaska to 67% in Minnesota. Most States were similar to the national State-to-local ratio of 42.6% to 57.4%. The new data, based on 1997 expenditures, effectively increased the share of funds going to the local governments. The national ratio is 40.8% to the States and 59.2% to the localities. The State with the highest passthrough percentage is California, with 67% going to the local governments. The State with the lowest percentage to be passed through to local governments is still Alaska, with 24%. Between 1971 and 1990, the State share of variable passthrough percentages increased steadily from 28.9% to 42.6% (Highlights). Although there was a slight decrease from 1990 to 1997, future JADS conducted using the 1997 methodology should indicate a continuing trend of increasing State shares. State shares decreased from 42.6% in 1990 to 40.8% in 1997 because the Federal grants portion was collected differently in 1997. Prior to 1997 respondents were asked to provide information for specific justice grants that they may have received during the fiscal year. In 1997 the grant information was pulled from the FAADS survey. This survey goes to all Federal grant-making agencies every 3 months and asks for the types and amounts of Federal grants given to State and local governments. This approach is more accurate because it collects information from a few granting agencies as opposed to thousands of State and local governments. Several new Federal justice grants were authorized in the period spanning from 1990 to 1997, which can impact the proportion of State to local expenditure. The most notable of which was the Child Support Enforcement Grant program. In 1988 State and local governments reported approximately $529 million in justice revenue receipts. In 1997 State and local governments received over $2.5 billion from the Child Support Enforcement program alone. Over $2 billion of this amount was granted directly to the States, in effect reducing their own-source expenses for child support enforcement. The remainder went to the local governments, reducing their own- source expenses to a lesser degree. The VPT percentages for individual States can vary widely from year to year. Prison and jail construction can have considerable impact on the VPT percentages because the expenditures can be tabulated in the year in which construction of the facility began, not necessarily the year(s) in which the cost was incurred. State governments that had large capital outlays for prison construction in 1990, but not in 1997, had State-share decreases in the VPT percentages in 1997, all other factors being constant. Prison construction in 1990 combined with reduced construction expenditures in 1997 contributed to the following decreases in State VPT percentages: Kansas, down 9.6 percentage points Alabama, down 9.2 points Virginia, down 5.1 points North Dakota, down 2.5 points Connecticut, down 1.3 points. In some States large capital outlays for corrections and increases in current operations expenditure increased the State VPT share for 1997 relative to 1990. This was the situation in Pennsylvania, up 8.8 percentage points, and in Montana, up 6.0 points. Between 1990 and 1997 the Commonwealth of Massachusetts abolished a few of its county governments and absorbed their justice functions. This contributed to the slight increase in the State share in Massachusetts. States with considerable increases in funding between 1990 and 1997 often displayed corresponding increases in their State VPT shares. The State than doubled their total criminal justice spending during the period and had subsequent increases in their VPT shares. Methodology The expenditure data used to calculate the variable passthrough percents were collected by the Census Bureau for BJS during the 1997 Census of Governments. Data were collected for -- All State governments All county governments All municipal and township governments. The Census included a total of 39,044 local governments (3,043 county governments, 19,372 municipalities, and 16,629 townships). The District of Columbia was treated as a municipal government. Expenditure data were not collected for Puerto Rico and the territories because their justice expenditures occur at only one level of government and the VPT does not apply to them. Data collection From August 1997 to September 1998 Census Bureau employees compiled expenditure data from government records for the 50 States, 25 largest counties, and 24 largest cities. The Census Bureau mailed questionnaires to the other local governments in November 1997. Nonresponse follow-up was conducted until the response rate for local governments reached 85%. Response for field-compiled units was 100%. Subsequently an effort was made to canvass State agencies that performed justice functions, but not as their primary function. Responses varied by State. Data collected were added to existing State justice expenditures. The survey period The State expenditure data presented in this report cover the fiscal year ending June 30, 1997, for all States except four whose fiscal years ended as follows: New York, March 31, 1997; Texas, August 31, 1997; and Alabama and Michigan, September 30, 1997. Some State agencies operate on a different fiscal year basis from the State government. In such instances, the data in this report are for the agency's fiscal year that ended within the State's regular fiscal year. For local governments the expenditure data here are for the governments' fiscal years that ended between July 1, 1996, and June 30, 1997. By using the July 1, 1996, to June 30, 1997, reference period, some governments' data are for a fiscal year that the local government may refer to as fiscal 1996, for example those that ended December 31, 1996. The fiscal year reported for Washington, D.C., ended September 30, 1997. Limitations of the data Readers should compare States with caution. Differences in functional responsibilities from State to State affect the comparability of the data. Some State governments directly administer activities that local governments administer in other States; for example, the State governments of Alaska, Connecticut, Delaware, Hawaii, Rhode Island, Vermont, and to some extent Massachusetts operate local jails as well as State prisons. All data are subject to possible inaccuracies in classification, response, and processing. Every effort was made to keep such errors to a minimum by careful examining, editing, and tabulating of the data submitted by government officials and by extensive follow-up procedures to clarify inadequate or inconsistent survey returns. Definitions of terms More explicit definitions can be found in the Justice Expenditure and Employment Extracts, 1997, at . The following definitions are the same as those presented in the 1990 report. Total expenditure includes only external cash payments made from any source of monies, including any payments financed from borrowing, fund balances, intergovernmental revenue, and other current revenue. It excludes any intragovernmental transfers and noncash transactions, such as providing employees' meals or housing. It also excludes retirement of debt, investment in securities, extensions of loans, agency transactions, and government contributions for employee benefits. Variable passthrough percentages are developed to comply with the Omnibus Crime Control and Safe Streets Act of 1968, as amended (Public Law 90-351), which requires that the block grants made by the Bureau of Justice Assistance (and formerly by the Law Enforcement Assistance Administration) to each State be allocated between the State and local governments according to the ratio of State-to-local criminal justice expenditures. The legislative history of this act indicates that these expenditures are to be own-source expenditures. Unit of local government as specified by Public Law 90-351, only includes expenditures of units of general local government, and independent law enforcement or judicial enforcement districts. Of the five broad classes of local government identified by the Census Bureau, the Public Law 90-351 definition encompasses three (counties, municipalities, and township or "town" governments), part of one (special districts), and excludes another (independent school districts) altogether. Only special district governments whose primary function is law enforcement are included. Thus, a transit authority that has a police force would not be eligible as its primary function is public transit. Justice expenditure includes the justice functions of police protection, adjudication, prosecution, and legal services, public defense, corrections, and a residual "other" category, as defined below. Police protection is the function of enforcing the law, preserving order, and apprehending those who violate the law, whether these activities are performed by a city police department, sheriff's department, or State police. Private security police are outside the scope of the survey, but government contract payments to a private security firm would be tabulated as direct expenditures of the government. Adjudication includes all civil and criminal courts and activities associated with courts such as clerks of court, law libraries, grand juries, and petit juries. Prosecution and legal services includes the civil and criminal justice activities of the attorneys general, district attorneys, State's attorneys (and their variously named equivalents), and corporation counsels, solicitors, and legal departments with various names. It also includes government payments to private legal counsel. Public defense includes legal counsel and representation in either criminal or civil proceedings as provided by public defenders and other government programs that pay the fees of court-appointed counsel. Corrections involves the confinement and rehabilitation of adults and juveniles convicted of offenses against the law and the confinement of persons suspected of a crime awaiting trial or adjudication. It includes jails, prisons, probation, parole, pardon, and correctional administration. It includes drug treatment and rehabilitation programs that are administered by a justice agency. Other justice activities includes expenditures that are not elsewhere classified, that cut across more than one category, or that are not allocable to separate categories. Examples are crime commissions, neighborhood crime councils, State criminal justice coordinating councils, and criminal justice planning agencies. Sources of additional information To obtain other reports on Justice Expenditure and Employment Statistics, visit the BJS website at Further information about the Bureau of Justice Assistance grant programs is available on the Internet at In addition, information about both BJS's Justice Expenditure and Employment Series and BJA's Byrne Program can be obtained from the National Criminal Justice Reference Service (1-800-732-3277). ----------------------------------------- The Bureau of Justice Statistics is the statistical agency of the U.S. Department of Justice. Lawrence A. Greenfeld is acting director. Sidra Lea Gifford, statistician in the Law Enforcement, Adjudication, and Federal Statistics Unit at BJS, and Stephen D. Owens, Chief of the Public Finance Analysis Branch in the Governments Division at the Bureau of the Census, wrote this Technical Report. Steven K. Smith at BJS supervised this project. Tom Hester edited the report and Jayne Robinson prepared it for final production. At the Census Bureau, Paul C. Clark II performed legal research for the project, and Lynn Zhao coordinated the supplemental State data collection. November 2001, NCJ 190359 ------------------------------------------- End of file 11/07/01 ih