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August 2008

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This article is in the news archives --- for current news go to the Third Branch News.


A Changed Judiciary Still Needs to Save

Over five years ago, the federal Judiciary looked into the future and saw its rent projected to top $1.2 billion by 2009. That and other “must pay” requirements would consume 72 percent of the budget and create a $1.4 billion shortfall between available funding and requirements. Massive layoffs of staff seemed inevitable. Something had to be done to address this problem. Chief Justice William F. Rehnquist asked the Judicial Conference Executive Committee and its chair, Chief Judge Carolyn King, to coordinate an effort to contain costs in the Judiciary.
“If we had continued unchanged,” said Judge Julia Gibbons, chair of the Judicial Conference Budget Committee, “we would have seen drastic reductions in service to litigants and the public.”

Instead, the Judiciary initiated a comprehensive strategy that included sweeping cost- containment measures.

“As a result our current funding situation is—for the moment—adequate to meet our needs,” said Gibbons.

Containing Rent Costs
As a direct result of cost-containment efforts, the Judiciary’s rent bill in 2008 is $150 million less than projected back in 2004. Rent that had been anticipated to increase 6 to 8 percent a year only increased by 2.9 percent in fiscal year 2008.

“Controlling our rent was absolutely critical to our success,” said Gibbons. “If we had succeeded in cutting costs in other areas, but not in our rent, we still would have had a major problem.”

The rate of growth in rent was slowed by proactive measures. The first step was a national moratorium on courthouse construction that lasted 24 months and gave the Judiciary time to re-evaluate.

Then a national rent validation initiative spearheaded by the U.S. District Court for the Northern District of New York identified mistakes in rent charges, giving the Judiciary rent credits and cumulative savings including cost avoidance over a 3-year period of more than $50 million. Additional rent adjustments and credits are anticipated, and the Judiciary now has a program in place to ensure accurate rent bills in the long term.

In 2007, the Judicial Conference endorsed the Circuit Rent Budget (CRB) program. While new courthouses are still prioritized and funded at the national level, each circuit judicial council now has an allocated rent budget, and must decide which projects it can afford. Incentives encourage efficient space use decisions. Over the next eight years, the CRB program will hold space cost growth to no more than 4.9 percent, on average.

Changes to the U.S. Courts Design Guide over the last two years have also contributed by reducing office size for staff and chambers space for judges. Requirements for the clerk’s office space, especially intake areas and records storage, have been reduced with the comprehensive use in the district and bankruptcy courts of the Case Management/Electronic Case Filing (CM/ECF) system. Library space has been downsized 13 percent as a result of reductions in lawbook collections.

A recently signed Memorandum of Agreement with the General Services Administration changes the way the Judiciary’s rent is calculated for all federally owned courthouses delivered in the future, providing the Judiciary with certainty about the amount of rent it will pay for a 20-year period. Rental rates will be determined based on a return-on-investment methodology, rather than be subject to dramatic changes every five years as a result of changing commercial market conditions.

“Because aggressive steps were taken,” said Administrative Office Director James C. Duff, “even with a modest assumption of increases in rent, the Judiciary’s rent bill will not grow out of control over the next few years.”
Containing IT Costs
Technology has helped the Judiciary handle a growing workload, but multiple local servers across the country are expensive to maintain and update. Consolidating servers at a single location saves money. The Judiciary reduced by 89 the number of servers needed to run the jury management program, saving $2 million in the first year and saving an expected $4.8 million through FY 2012. Servers that run the case management system for the Judiciary’s probation program were consolidated, creating projected savings and cost avoidances of $2.6 million through FY 2012. The recently completed consolidation of servers for the Judiciary’s national accounting system will result in savings and cost avoidances totaling $55.4 million through FY 2012. The accounting system also is faster, more responsive, and more secure.

Containing Personnel Costs
If workload projections, staffing formulas, and compensation policies had remained unchanged, by 2017 the Judiciary would spend almost $1.4 billion above current levels on court support staff. Anticipated future funding levels could not support that level of spending.

As an immediate step, the Judicial Conference Committees on Judicial Resources and Criminal Law have agreed to limit their FY 2010 requests for additional staffing by 500 positions—essentially setting a cap on staffing.

Limiting the growth in staffing increases is only part of the Judiciary’s efforts. Reducing the growth in staff compensation is another key cost-containment component.

The federal Judiciary undertook a major court job classification and compensation study, with recommendations adopted by the Judicial Conference that will affect staff positions throughout the court system. Overhauling the Judiciary’s court personnel system, giving courts greater say in managing and paying personnel, updating court unit staffing formulas, and limiting the number of career law clerks may produce up to $200 million in cost avoidances over the next decade.

“In the short term, court managers can and should hire the people needed to do the work,” said Gibbons, “because we’re planning and saving for the long term.”
Capping Growth
The Budget Committee has worked with other Judicial Conference committees to set budget caps for the Judiciary’s accounts. In addition to the rent cap of 4.9 percent, the Salaries and Expenses account is capped at 8.2 percent, the Defenders Services account at 7.5 percent (excluding certain panel attorney rate increases), and the Court Security account at 6.6 percent. The caps indicate the limits of spending; but with cost containment as an incentive, growth in these areas may be substantially below these limits.

“The process of developing caps was different with each Conference committee and, by working back and forth, we arrived at mutually agreeable results,” said Gibbons. “We hope that caps will be a way to constrain growth. Certainly, growth under the caps will be more modest than it might have been.”

Long-term Efforts
“When I think of what the future could hold, it’s a pretty daunting prospect,” said Gibbons. She points to a future where domestic spending is restrained, spending for Defense and Homeland Security increases, and where both entitlement requirements and the federal deficit are guaranteed to grow.

“We still face a large potential shortfall between our expenditures and our appropriations,” she said. “And unlike other branches of government, we don’t control our workload and we can’t eliminate programs. Down the road, the same factors still exist that drove Chief Justice William Rehnquist in 2004 to task the Judicial Conference Executive Committee with the implementation of a cost-containment program. We still need to be good stewards and more forward with our efforts.”

Congress is aware that the Judiciary has taken drastic measures to contain costs, which has, according to Gibbons and Duff, increased the courts’ credibility when it asks Congress for funding.

“There’s no longer an immediate financial crisis but, as with much of the federal government, the long-term problem remains,” said Duff. “The long-term ‘must pays’ are still expected to grow faster that we can support them. But we have time to manage our way by continuing to emphasize cost containment and looking for new initiatives.”