Members Attending: Ron Hjorth, co-chair, Kirk Johns, co-chair, Wayne Blair, Sophia Byrd, Richard Carlson, John Cary, David Donnan, Kim Eaton, Judge Deborah Fleck, William Fosbre, Judge Gordon Godfrey, Judge Bruce Hilyer, Mary McQueen, Barb Miner, Glenn Olson, Gail Stone, Judge David Tracy and Judge Richard White

Staff Attending: Gil Austin and Jude Cryderman

Call to order
The meeting was called to order by Ron Hjorth, co-chair.

Introductions
Kirk Johns asked that each attendee introduce him/herself.

Minutes
Approval of the June 19 minutes was tabled until next meeting. Members will have until the end of next week to provide comments to Jude Cryderman.

Status Report
The work group was advised that Jeff Hall had corresponded with the National Center for State Courts requesting studies relating to court fees, etc.

Select Reports
Kirk stated that there is no rationale or logic for state/local share of funding. He indicated that there is a trend to reassess how much state money goes to the courts. He continued, that unfortunately good data is not available because accounting systems differ not only from state to state, but even within the state.

SimCourt Data
Ms. McQueen provided a brief overview of the preliminary SimCourt Data. She advised that staff is attempting to obtain all of the survey data from the courts. When all of the data is collected the work group will be furnished updated information.

Preliminary Recommendations
Kirk Johns reported that during the recent work group co-chairs retreat, the co-chairs were requested to develop preliminary recommendations by September 5 task force meeting. Mr. Johns indicated the work group’s preliminary recommendations would include: 1) user fees, 2) proportional state/local funding, and 3) what do to do fix PSEA account.

Mr. Johns stated the work group will have two meetings prior to the full task force meeting in September. Those meeting will be devoted to the development of the preliminary recommendations.

General Tax Revenue
The handout distributed shows projections of various rates of increase in property tax, sales tax and business and occupation tax.

Various Funding Structure Models/Options
Ms. McQueen reviewed the following court budget concepts document.

Court Budgeting Concepts

1. State assumes additional responsibility for funding trial courts

2. Local government continues to share in funding trial courts

3. Decentralized administration – local courts retain control of the financial administration and accountability for the courts’ budgets

4. The BJA implements a Performance Audit Process

COURT BUDGETING MODELS

1. BLOCK GRANT PROGRAM

   • State makes flat contribution to local courts (not local government) based upon a formula (e.g., caseload, number of judges, population, etc.)

   • Local government’s contribution is stabilized at some level (FY 1999, 2000, etc) along with non-supplanting prohibitions

   • Annual appropriation directly to local courts through AOC

   Examples:

   California (before state funding)
   Pennsylvania
   Oregon (before state funding)

2. Functional Appropriation

   • State assumes cost of specific trial court function(s) (e.g. salaries/benefits; juror costs, interpreter costs, etc)

   • Local government’s contribution is stabilized at some level (e.g. FY 1999 -2000, etc.) with non-supplanting prohibitions

   • Annual reimbursement through AOC

   Examples:

   1998 Trial Court Funding Proposal
   Kentucky – facilities
   Ohio – Indigent defense
   Pennsylvania – Probation
   Arizona – Detention
   Kansas – Judicial Education
   Maryland – Clerk salaries; portion of juror fees
   Wisconsin – Court reporters, court interpreters
   Washington – Becca, JRA, JIS, Judicial Education

3. DISCRETIONARY GRANT PROGRAM

   • State establishes a program to fund innovative court projects (e.g. drug case management; family law case management; dependency case management; reduce congestion/delay)

   • Courts apply and are approved by a BJA committee

Ms. McQueen explained that block grants would require the development of a formula. She advised that block grants could be used for anything within the court system. This type of grant is not tied to use, but instead tied to work load. This money is an outright grant.

Ms. Stone said if the work group is trying to decide how the court budget concepts fit into the recommendations, it would be helpful to have information relating to the appropriate state/local funding ratio.

Mr. Olson feels it is time to get the legislature thinking about their money and the courts. Whether through new property or sales tax options, those funds should be dedicated in statute to the courts.

Judge Godfrey said if the option is taxes, information should be provided on past practices with option taxes. He pointed out there is a great disparity in the tax base among the counties. Judge Godfrey next spoke to block grants indicating those projects are usually tied into funding at the local level. He indicated his experience with block grants is that the haves can afford to go out and solicit the grants, while the have nots cannot. He continued, the counties just don’t have the start-up resources.

Ms. McQueen responded these block grants would not be a match, but instead direct appropriations.

Mr. Blair asked that staff provide examples where the state currently gives block grants to the counties. He also asked that they find out if the state put conditions on the money.

The work group briefly discussed issued relating to backfill and supplanting.

Mr. Carlson pointed out that if the goal is to have state/county assume percentage of costs for the operation of the courts, agreement must be reached on the components of the courts. He continued, agreement must also be reached on the appropriate percentage of the state’s role and the county’s role. Mr. Carlson added that block grants stay fixed, while over time money is lost through block grants due to the increase in actual costs.

Mr. Hjorth pointed out that the small group established (Resource Allocation Committee) at the June 19 meeting should assemble to discuss options. Mr. Hjorth requested that there be justification to support the state’s proposed responsibility along with the responsibility of local government. He inquired if Ms. Stone would agree to chair this group.

Ms. Stone agreeded, provided that the meeting is set soon.

Mr. Johns suggested the Resource Allocation Committee (RAC) use the onion chart to create an inventory of trial court functions. Each function should be identified as a state mandated function or a third branch of government function. The result will be an inventory of trial court functions. It was also suggested that RAC meet with the subcommittee of Problem Definition that created the onion chart to assist with the identification of onion chart functions.

Mr. Johns also suggested that Ms. Michels, co-chair of the Problem Definition Work Group, be asked if an hour could be allocated at their next meeting to assist in the identification of items that should be included in the inventory.

Factor and Considerations Relevant to Court Fees

Mr. Johns reviewed the information below.

Court Costs.
Fees.
Fines.
Penalties.
Assessments.
Forfeitures.

Court Costs:	All amounts assessed against or paid by parties.
Fees:	Amounts charged as a condition of initiating a court proceeding or procedure, or obtaining a service from the court. Examples: filing fees, motion fees, certified copy fees, jury fees.
User Fees:	A subcategory of “Fees.” Intended to contribute to or cover the cost of a procedure or service. Examples include filing fees, motion fees, etc.
Misc. Charges:	Amounts assessed for services provided by persons or entities other than the court and court staff. Examples: sheriff's fees, per-page transcript fees, sequestration of jurors, witness mileage fees.
Surcharge:	Amounts assessed and earmarked for a specific purpose or program. Typically added to other fees, fines, or penalties. May be assessed for purposes which have no direct relationship to a case, procedure or service, and may provide no direct benefit to the persons paying the surcharge. Some surcharges benefit the judiciary, others do not. For these reasons, they are often considered "hidden" taxes. Examples: law library assessments, JIS assessments, indigent defense, crime victims' programs.
Fines:
Penalties:
Forfeitures:

Constitutional considerations.

Separation of powers.

Third branch of government.

Judicial independence / autonomy.

Fundamental to public confidence in the
administration of justice.

Access to justice.

Fees should not impede access to justice.

Relief from user fees should be available in
appropriate circumstances.

Waivers, exemptions, reductions, postponed.

Uniform administration of justice.

Procedures and services that benefit the general public should be funded by the public with general revenues appropriated through the legislative process.

Exceptions to this principle:

Should be invoked with caution;

Should not jeopardize the above
considerations;

Should reflect the extent to which a br>procedure or service principally benefits private parties; and

Should not require private parties, even
when deriving a private benefit from a procedure or service, to contribute a disproportionate amount for that procedure or service.

Funding of the courts -- the Third Branch of government -- should not depend on the volume of proceedings in the courts.

Trial court funding should be provided by both public funds and the parties.

There is an indivisible and largely unallocable
public-private benefit to every court procedure and service.

The public has a legitimate interest in expecting users of the court system who derive a direct private benefit from court procedures and services to contribute to the costs of providing those procedures and services, wherever feasible.

There is always / inherently a mixed public and private benefit stemming from any court procedure or service.

It is not possible to characterize any procedure or
service as a wholly private benefit.

It is difficult (impossible?) to allocate the benefit
with precision or certainty.

User fees can force discipline and caution on the parties, e.g.:

Fewer unmeritorious cases filed or pursued;

Earlier settlements;

More cautious use of motions.

Parties who make a greater use of court procedures, services and resources should make a proportionately greater contribution to the costs associated with providing those procedures, resources and services than parties who make less use of same.

Is this a legislative function?

Exclusively?

Constitutional requirement?

What role can the judiciary play constitutionally?

What role should the judiciary play?

Joint role with legislature?

Advisory?

Exclusive within established parameters or
benchmarks?

What “separation of powers” and “public perception” issues are raised by the judiciary’s involvement in establishing fees?

How can these be addressed / ameliorated?

Fees should be uniform.

Fees should be rationally related to the cost of providing the procedure or service involved.

Fees should be subject to periodic review and adjustment.

To what extent should the amount of fees vary according to:

Parties’ ability to pay (by objective criteria);

Nature of the parties (private, commercial,);

Nature of dispute.

Uniformity.

Simplicity.

Rationale nexus to procedure or service for which charged.

Fixed / flat (non-discretionary).

Discretionary fees involve administrative time and


expense.

Expense of:

Collecting;

Administering;

Accounting.

Where is fee initially deposited (upon payment)?

To which fund or entity are fees subsequently transmitted?

For what purposes may fees be used?

Court funding?

Court funding and other purposes?

Any purpose?

What body determines how funds will be expended?

King County Bar Report

Judge Fleck briefly explained some of the findings in the report issued by the King County Bar Association.

User Fees

The work group discussed the option of user fees. The following points/questions were made during that discussion:

• In the executive branch user fees are common and necessary. User fees can parallel across all branches of government.

• Should some type of ancillary service for fast track/different discovery rules be offered.

• Comments overlook the fact that we have a user fees system now and have for many years. Given funding crisis we are facing, not short term, assume expectation that funding proposal will make use of every resource of funds and use in reasonable way. Structure and propose reasonable amount.

• Two types of user fees—1) judgment fee and 2) cross claim fee. Once set up they will be the well to which local/state government turns.

• The public to a great extent would not be bothered by user fees. Make user fees sliding fees. Concern that depending on user fees will set up another beau racy for judge to have to decide things. See pluses and negatives.

• Should have an abuser fee—sanctions. Those that engage in unlawful, illegal conduct make court system whole.

• Simple fact of some fee, that were are calling user fee, don’t confuse concept. One that pays everything and one that pays some costs.

• Must be careful on sanctions and user fee issues. Don’t use judicial power to finance the system.

• If the work group comes up with user fee recommendation, that recommendation will be relied on to make up short fall. Won’t fund courts with user fees because user fees are a relatively modest contribution to make up shortfall.

It was suggested that those wanting to recommend user fees should draft a proposal. These proposals are to be circulated to the work group in advance of the next meeting. The members were asked to review and decide how they would vote on each proposed by the July 31 meeting.

Kirk reminded the members that the goal is to have a preliminary recommendation prepared for the full task force meeting in September. He continued, a recommendation will not be made that does not accurately reflect the feeling of the work group.

There being no further business, the meeting was adjourned.