Vol. 36, Number 2—February 2004

FY 2004 Appropriations Finally OK'd;
But Courts Still Face Fiscal Threat

Four months and many anxious moments into the new fiscal year, the Judiciary has its 2004 appropriation. The Senate passed the consolidated appropriations bill, H.R. 2673, on January 22, 2004, at the start of the second session of the 108th Congress and nearly seven weeks after the House passed the conferenced bill. The President signed the bill into law, P.L. 108-199, the next day.

The bill consolidates seven appropriations bills, including the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2004. The total appropriations package contains $820 billion in funding, with $5.1 billion appropriated for the Judiciary, plus $222 million for courthouse construction and $248 million for building repair and alteration in the Transportation, Treasury and Independent Agencies Appropriations bill, also part of the package.

Judges received a 1.5 percent Employment Cost Index (ECI) in the New Year, but will receive an additional increase retroactive to January 1, 2004, depending on how the General Schedule ECI adjustment is divided between an ECI and locality pay. The President is expected to make that determination in the coming weeks. Any ECI adjustment for federal judges, as well as for Executive Schedule officials and members of Congress, is capped by the General Schedule ECI adjustment, excluding locality pay.

"It is clear that the amounts contained in the Consolidated Appropriations bill are much less than we require to perform the duties prescribed to the Judiciary under the Constitution or by statute," Administrative Office Director Leonidas Mecham said. "The Judiciary received a 4.7 increase for FY 2004 when we needed a 7 percent increase over FY 2003 just to provide current services. We will face some tough choices and belt-tightening in the coming months. Because of budget constraints, many court units face the prospect of having to take some adverse personnel actions, including involuntary separations and furloughs. However it would have been far worse if the Judiciary had been compelled to operate under a continuing resolution for a full year."

The 4.7 percent increase provides $4.0 billion for the Judiciary's main Salaries and Expenses account, $129 million below the amount needed to maintain current services. Shortfalls in the Salaries and Expenses account and the Defender Services account will reduce court support staffing below FY 2003 levels, and suspend for a period of time payments to court-appointed attorneys.

Based on the 4.7 percent increase, the Judicial Conference Executive Committee approved a financial plan for the Salaries and Expenses account that could result in a reduction of some 800 positions throughout the courts from the level funded in FY 2003. Some of those reductions may occur through lapsed vacancies, early retirements, and buyouts. Some furloughs and involuntary separations already have occurred.

For FY 2004, the Judiciary had requested $5.4 million, a 10.5 percent increase over the FY 2003 appropriation of $4.9 billion, an amount needed to fund rising workload-related needs. In the last decade, filings in the courts of appeals have risen 26 percent. In the district courts, the number of criminal cases filed has increased 55 percent and the number of civil cases filed has risen 7 percent. The number of bankruptcy cases filed in the federal courts since 1994 has increased 98 percent. Persons under supervision in the federal probation system have increased 24 percent.

Judiciary Asks for Supplemental Funding

To avoid the anticipated shortfalls in FY 2004, the Judicial Conference has submitted an emergency supplemental appropriations request of $55.6 million to the White House for FY 2004. The bulk of the supplemental, $39 million, would go to the courts' Salaries and Expenses account, to help avoid some of the adverse personnel actions and also restore funding for critical court infrastructure and automation requirements. A portion of the funds would go to the Defender Services account, which is underfunded by $16.4 million. Without supplemental funding, approximately three weeks of court-appointed attorney payments would have to be deferred until FY 2005. While it is unlikely Congress will pass a supplemental in time to avoid planned employee buyouts, early-outs and involuntary separations, the Judiciary hopes to receive one in time to avoid employee furloughs.

"The Office of Management and Budget has agreed to transmit our supplemental request to Capitol Hill," said Director Mecham. "Congress has hinted strongly that no supplemental bills will be considered in FY 2004, due to the tight fiscal situation, but we are hopeful that the critical needs of the Judiciary will be the exception."