Funding the Federal Judiciary

Underlying the focus on cost-containment options was the Judiciary’s commitment to its core missions, values, and responsibilities to the public to render justice fairly and expeditiously.

Comprehensive Cost-Containment Strategy for 2005 and Beyond

In March 2004, Chief Justice William H. Rehnquist charged the Executive Committee, chaired by Chief Judge Carolyn Dineen King (5 th Circuit), with conducting a comprehensive review of the policies and practices, operating procedures, and customs that have the greatest impact on the Judiciary’s costs, and with developing an integrated strategy for controlling these costs.

Unprecedented funding challenges face the Judiciary in FY 2004 and over the next several years due to overall budget constraints. For the past two years, the Judiciary has received funding that was inadequate to meet its needs, and estimates of probable future funding when compared to estimated needs show a growing gap approaching $848 million by FY 2009.

It was clear that fiscal year 2004 budget shortfalls could worsen in FY 2005. During FY 2004, AO staff coordinated the review of 271 supplemental requests from courts seeking additional financial resources in the amount of $22 million. Due to budget limitations, only $5.5 million in supplemental funding was distributed. Supplemental funds were provided for courts to downsize their staffs via buyouts and involuntary separations; for salary funding for courts where salary allotments fell below 96 percent of payroll requirements; and for critical non-salary operational requirements.

Planning for FY 2005 and beyond, the Executive Committee enlisted the assistance of chief judges, court staff, advisory groups, Conference committees, and the AO staff led by Associate Director Pete Lee, to scrutinize all spending categories, with the focus on whether expenditures—even though needed or desired—are affordable in the current budget climate. The Executive Committee and other Judicial Conference committees generated and reviewed hundreds of ideas. Individual teleconferences included the 10 committee chairs with funding responsibilities. Judge King asked the committee chairs to identify “quick hitting” action items that could be implemented immediately to reduce costs in 2004 and 2005, as well as long-term cost-containment ideas for 2005 and beyond. Committees proposed initiatives for the Executive Committee to consider incorporating in its overall cost-containment strategy. Underlying the focus on cost-containment options was the Judiciary’s commitment to its core missions, values, and responsibilities to the public to render justice fairly and expeditiously.

This massive effort was completed in five months with the Executive Committee’s strong leadership, with active involvement of Conference committees, and with extraordinary staff support from the Administrative Office. Thousands of staff hours were dedicated to this effort; virtually all AO units played a part.

At its September 2004 session, the Judicial Conference approved the long-term cost-containment strategy for the Judiciary presented by the Executive Committee. The strategy incorporates suggestions from all 10 Conference program committees, and includes these major components:

• impose tighter restraints on future space and facilities costs;
• trim future staffing needs through re-engineering work processes and reorganizing functions to increase efficiency, and by employing different staffing techniques;
• explore fair and reasonable opportunities to limit future compensation costs;
• invest wisely in technologies to enhance productivity and service, while controlling operating costs by revamping the service-delivery model for national information-technology systems;
• study and implement cost-effective modifications to defender services, court security, law enforcement and other programs; and
• ensure that fees are examined regularly and adjusted as necessary to reflect economic changes.

Administrative Office staff will continue to support Judicial Conference committees in developing and implementing these and other long-term cost-containment initiatives, which will be a major focus over the coming years and will assist the Executive Committee in its monitoring and coordination role.

AO Cost-Containment Initiatives

The AO began a review of programs it manages for the courts, such as information technology, training, etc., to parallel the strategic review of the Judiciary budget initiated by the Executive Committee in March 2004. Anticipating future budget reductions and the possibility of a hard freeze on appropriations for FY 2005, broad spending restrictions were implemented. These measures made it possible to maximize balances that could be carried forward from FY 2004 to FY 2005 and to operate within the constraints of the continuing resolution. Under the restrictions, AO offices proceeded only with essential activities required to support the Judicial Conference and its committees and ensure continuity of court operations.

Because 93 percent of the AO budget is required to cover compensation and benefits costs, specific attention was focused on containing personnel costs. Since 1995, total AO staffing declined slightly, while the court staffing grew 18 percent. Funding increases have not been sufficient for many years to keep all AO positions filled, and the AO has continuously maintained a substantial number of vacancies. During 2004, nearly all AO positions that became vacant were not filled, increasing the vacancy rate from 66 to over 100, or from 5 percent to nearly 10 percent of authorized positions by the end of the year.

As a consequence, AO staffing declined to a point below the 1991 level. Each directorate developed workforce restructuring plans to be prepared to operate, if required, at 10 percent below current levels in FY 2005. To assist in the restructuring effort, approval was sought from and granted by the Office of Personnel Management for early-out retirement for AO employees. Other personnel cost-cutting steps taken included reducing the salary progression factor incorporated in the budget, acquiring temporary help through local sources at little or no cost, and when positions are filled, hiring at entry or lower pay levels.

Travel was restricted to mandatory requirements in support of Judicial Conference committees, continuing court operations, and implementing approved information technology projects. The use of teleconferencing and videoconferencing was emphasized. Training was deferred unless required to continue essential functions. Orders for contracts, services, supplies, and equipment were restricted to those absolutely essential to the continuation of AO and court support functions. IT project funding was cut. The AO’s computer equipment replacement cycle, already a year longer than the courts’ cycle, was extended even further for lack of funds. Many other initiatives are underway to contain and reduce future costs, such as reducing office-automation equipment replacement costs by categorizing personal computer users based on the level of use; transitioning appropriate publications from hard copy to electronic format and distribution; and reviewing, eliminating, and consolidating library materials and online services.

FY 2004 Supplemental Appropriations

The Judiciary submitted a FY 2004 supplemental request to Congress totaling $55.7 million. The request included $39.2 million for the Courts Salaries and Expenses account to prevent reductions in court staffing, and to pay for critical information technology and infrastructure expenses; and $16.4 million for the Defender Services account to cover the projected shortfall in panel attorney payments. Over the course of the year, the anticipated shortfall in Defender Services grew to $26 million.

No additional funds were appropriated for the Salaries and Expenses account shortfall, and the courts lost over 1,350 jobs due to hiring freezes, involuntary separations, buyouts, and early retirements. However, panel attorney payments were spared from suspension in August, when a supplemental of $26 million for Defender Services was included in P. L. No. 108-287, the Department of Defense Appropriations Act, 2005.

FY 2005 Appropriations

The House of Representatives passed the fiscal year 2005 Commerce, Justice, State and the Judiciary (CJSJ) appropriation bill, H.R. 4754, on July 8, 2004 . The House bill provided the Judiciary with an overall 8.4 percent increase, and a lesser total increase for the courts’ Salaries and Expenses account of 5.6 percent. Under this funding level, current services could continue but without allowances for workload growth. The House bill would have funded almost all other Judiciary accounts at or very near a current-services level.

On September 15, 2004 , the full Senate Appropriations Committee cleared its version of the fiscal year 2005 CJSJ appropriations bill (S. 2809). The bill provided a 4.8 percent increase for the Judiciary overall. The increase to the courts’ Salaries and Expenses account was the equivalent of only 3 percent, after adjusting for the transfer of Federal Protective Services security charges to the Court Security Account. Under the bill, courts stood to lose an additional 570 employees from end-of-2004 staffing levels—which represented a loss of nearly 1,350 employees from end-of-2003 staffing levels. Nearly all Judiciary accounts were funded significantly below current services in the Senate bill, which never came before the full Senate for a vote. Congress recessed in late October with nine appropriations bills pending, including the Judiciary’s.

Fiscal year 2005 began under a series of continuing resolutions (CRs). To avoid interruption to court operations under the CRs, the Executive Committee of the Judicial Conference approved an interim financial plan. When temporary allotments reflecting a 4 percent increase were issued on October 1, 2004 , all courts were advised to refrain from hiring and from purchasing non-essential goods and services, pending a final financial plan.

The fiscal year 2005 CJSJ appropriation was ultimately included in an omnibus bill (H.R. 4818) with eight other spending bills passed by the House and Senate on November 20, 2004 , during their lame duck session. After a delay for necessary amendments unrelated to the Judiciary, the President received and signed the bill, P. L. 108-447, on December 8, 2004 .

The overall bill was fiscally lean, providing a freeze, or zero growth, in discretionary spending government-wide. The Judiciary fortunately fared better, with a final funding level of $5.426 billion, a 6.1 percent increase overall. However, the final Salaries and Expenses appropriation for the courts was $4.125 billion, a lesser 4.3 percent increase over FY 2004, and slightly above the amount assumed in the interim financial plan approved by the Executive Committee. This amount will prevent further loss of staff and the courts may be able to fill some vacant positions.

The Defender Services account received a 2005 budget of $667.3 million, an 11.6 percent increase over 2004. The final bill also provides for a $160 increase in the hourly rate paid for capital case representation, and allows for an increase in the statutory case maximums.

The Fees of Jurors account is nearly fully funded at $60.7 million. However, the Court Security account did not fare as well and is funded below FY 2004 levels. Although the final funding level of $327.5 million represents an increase of $57.2 million, once the cost of transfer of Federal Protective Service charges from the Salaries and Expenses account is accounted for, the account is approximately $4.2 million, or 1.5 percent below last year’s Court Security level.

With a funding level of $67.3 million, the Administrative Office is funded at 3.0 percent over fiscal year 2004, as usual, well below the courts’ increase. While this funding level will allow the AO to maintain on-board staffing levels, unlike the courts, the AO will be unable to fill any of the vacancies it experienced in FY 2004.

The Executive Committee met in mid-December and approved a final fiscal year 2005 financial plan based on the funding provided in the omnibus appropriations act.

Long-Range Planning Activities

The Administrative Office supported long-range planning meetings of Judicial Conference committee chairs in March and September 2004. The meetings were led by the Executive Committee’s planning coordinator, Chief Judge Michael Boudin (1st Circuit). Committee chairs focused on broad trends and issues affecting the work, resources, and operation of the courts. The overarching planning issue for the past two years has been to address budget challenges by considering long-term changes that may reduce the need for future resource growth.

The planning discussions contributed to the development of a comprehensive cost-containment strategy for the future.

Judiciary Voluntary Separation Incentive and Early Retirement Programs

The Judiciary’s technological advances are reshaping its workforce, at the same time shortfalls in Congressional funding require downsizing and restructuring of many court offices.

In fiscal year 2004, the Judiciary conducted two voluntary buyout and early-retirement program periods, with the second extending into FY 2005. These programs have proven to be valuable management tools, as they afford employees the opportunity to voluntarily separate. As of September 19, 2004 , 243 buyouts and 90 early retirements were processed. 

In September 2004, the Judicial Conference extended the buyout program through fiscal year 2005. Under the provisions of P. L. 107-296, the Director of the Administrative Office has the authority to approve buyout plans for court units. In August 2004, the Office of Personnel Management (OPM) approved the Judiciary’s request to offer early retirement to non-chambers employees of courts and federal public defender organizations throughout fiscal year 2005. Having this expanded authority from OPM permits more efficient and timely approval of courts’ requests. 

Continued use of the voluntary separation and retirement programs will help court offices that must restructure, delay, and realign positions and personnel in order to fulfill their mission.

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