January 14, 1998
	The Honorable Pete Wilson Governor of California
	The Honorable Bill Lockyer President Pro Tempore of the Senate     and Members of the Senate		The Honorable Rob Hurtt Senate Republican Floor Leader
	The Honorable Cruz M. Bustamante Speaker of the Assembly     and Members of the Assembly		The Honorable Bill Leonard Assembly Republican Leader

Dear Governor and Members of the Legislature: After more than a decade of investing in new county jails and state prisons, California faces an inmate overcrowding crisis that worsens each day. Over the last decade an increasing percentage of a growing population has been sentenced to state prison, and correctional officials see that trend continuing into the foreseeable future. In the course of its review, the Little Hoover Commission was presented with compelling evidence that prison overcrowding is not just the product of tougher sentences enacted in recent years. Overcrowding is compounded by inappropriate sanctions for low-level property criminals and a policy of incarceration instead of treatment for drug users, who because of repeated failures end up in state prisons. In addition, two out of three paroled felons in California -- far more than in most other states -- fail to successfully reintegrate into society. Consequently, they are returned to prison, too often having committed another crime. But if a multi-faceted correctional strategy were adopted fewer felons would graduate to state prison, fewer paroled felons would return to state prison -- and most importantly, fewer crimes would be committed. That new correctional strategy should incorporate the significant progress in carefully targeting programs and inmates to decrease drug use and violence and increase sobriety and employability -- and as a result substantially reduce crimes inflicted on California communities by released felons. This strategy also should capitalize on a maturing private correctional industry, which provides the opportunity to contract for prisons that can be less costly to operate in the short run and more effective in the long run at "correcting" criminals. The Commission's report, which is transmitted with this letter, makes recommendations that if correctly implemented could confidently be expected to result in an integrated system of criminal sanctions that would correct criminals and reduce crime, in addition to incapacitating the worst of the worst. The recommendations would maximize the use of existing facilities by aggressively implementing the correctional tools proven to reduce recidivism. And the recommendations would accommodate the need for additional prison beds through a competitive process that ultimately compensates prison operators on two equally important outcomes -- managing safe prisons and reducing crimes by released felons. Moreover, the recommendations seek to develop a common ground for resolving an issue that has engendered stalemate and divisiveness. Many of the underlying facts that define the problems and should ultimately define the solutions have been known to policy makers for some time. Today the State has more options for crafting a widely acceptable solution. But the intensity of the crisis and the price of the solutions have escalated. Time and intransigence remain the enemies of reasonable and affordable solutions. California is at a crossroads: The State must do something to reduce the crime committed by previously convicted criminals, or be prepared to redouble the $5 billion investment it has made in constructing new prisons, or watch the tougher sentences enacted in recent years be eroded by the inability to incarcerate repeat felons. The Little Hoover Commission stands ready work with the Legislature and the Governor to make these reforms a reality.

	Sincerely, Richard R. Terzian Chairman