Although the most pressing question may be where the funding for the Judiciary will come from in fiscal year 2005, the other side of the coin (so to speak) is the question: how does the Judiciary allocate the funding it receives?

Congress funds the Judiciary in various accounts for the courts and judicial agencies. In 2004, 94 percent of the Judiciary's funding went to the Courts of Appeals, District Courts and Other Judicial Services. This account is broken down further with 82 percent allocated to court Salaries and Expenses, by far the largest category; Defenders Services with 12 percent, Court Security at 5 percent, and Fees and Expenses of Jurors at 1 percent. Incidentally, these accounts are funded separately in the Judiciary's appropriations bill.

The court Salaries and Expenses account is divided into allotments for salaries and benefits, space and facilities, operating expenses, judges salaries and benefits, automation and technology, and other programs. The two largest accounts are personnel salaries, and space and facilities, which includes rental costs charged by the General Services Administration. Since 1985 rental costs have grown from $138 million to nearly $900 million. It is projected that by 2009, should the Congress fund all of the courthouse projects on the Judiciary's Five Year Plan, the Judiciary's annual rent bill will top $1.2 billion.

"The entire judicial branch of government faces the most serious funding challenge that I have seen during my 19 years as Director of the Administrative Office," Leonidas Ralph Mecham wrote to members of the Judiciary last month. "We were unable to secure sufficient funds, even during the current fiscal year, to pay fully for the missions mandated by the Congress. Now we face the probability that the fiscal situation for FY 2005 will be far worse."

Rental costs, judicial salaries and benefits, along with benefit costs for court support staff, chambers staff and benefits, and other costs such as FTS charges, interpreters, transcripts, and drug testing and treatment expenses for offenders, are grouped into an important part of the Judiciary's overall spending—expenses that the Judicial Conference has historically paid in full. Even in a fiscal year when the Judiciary doesn't receive the necessary funding, these expenses are still fully paid. This means the two expense items that come under the heading of discretionary spending—court operating expenses and court staff support salaries—must bear the brunt of any funding shortfalls. "These two vulnerable areas," said Mecham,  "can no longer carry the burden of the cutbacks."

Courts have not been fully funded for staffing for a number of years. In fact, if the Judiciary had been able to fund all the staff allowed by current work measurement formulas, the courts would have staffing of over 24,000 employees. Instead, workforce staffing will be reduced by shortfalls in funding to 22,468 in FY 2004. If the Judiciary is funded in FY 2005 at the "hard freeze" level being considered by Congress, these staffing levels would have to be further reduced by thousands of court employees.

The courts are developing contingency strategies that assume FY 2005 fundingallotments that are considerably below FY 2004. While every effort is being madeto obtain adequate funding from the Congress, it appears increasingly likelythat FY 2005 funding will not stretch far enough over both mandatory and discretionaryexpenses to enable the courts to operate at current levels.