SAN FRANCISCO (Reuters) - In 2012, under court order to reduce prison overcrowding, California announced an ambitious criminal justice reform plan that promised not only to meet the court mandate but also to improve criminal sentencing and “save billions of dollars.”

Now, three years after implementing the changes, California has reduced its prison population by some 30,000 inmates, and the state is in the vanguard of a prison reform movement spreading across the country, with support from both the right and the left.

But the promise of savings – a chief goal of prison reform nationwide – has not been realized. Instead, costs have risen.

The price tag for housing, feeding and caring for a prisoner in California has climbed to almost $64,000 annually, up from $49,000 five years ago. Per prisoner, the state spends more than three times the amount it did 20 years ago when the population was a similar size.

This fiscal year, despite the recent decline in inmate numbers, California’s corrections budget is one of the largest ever at $10.1 billion.

The state also spends an additional $1 billion annually outside the corrections budget to help counties implement sentencing alternatives and handle higher numbers of offenders serving time in local jails. Another $2.2 billion of state money is slated for county jail construction.

The cost per prisoner has swelled for a range of reasons. Some money-saving moves haven’t happened, including shuttering the state’s most dilapidated facility and ending out-of-state private prison contracts. Additionally, court rulings have required the state to spend billions improving medical care.

The biggest driver of higher costs, however, has been personnel. The state budgets for about the same number of positions as it did five years ago, when the state system housed nearly 30,000 more inmates.

“Their numbers go up, not down. There is no way that could be justified,” state Sen. Jim Nielsen (R-Gerber). “It was a deceit and a fraud to everybody that we were going to save money in corrections. We have not.”

COURT-ORDERED REDUCTIONS

California’s reforms are rooted in a 2011 U.S. Supreme Court ruling, which found that the state’s overcrowded prisons violated the Eighth Amendment’s ban on cruel and unusual punishment.

At the time, 20,000 inmates were sleeping on makeshift triple bunk beds set up in prison gymnasiums and day rooms. The court ordered California to reduce crowding from 200 percent of capacity to a more manageable 137.5 percent.

To comply with the mandate, Democratic Gov. Jerry Brown transferred responsibility for thousands of felons from the state to counties. Under the new initiative, known as realignment, certain kinds of felons would no longer be sentenced to state prisons but rather would serve their time in local jails or alternative programs. In turn, jails released - or didn’t take in - thousands of inmates with less serious convictions.

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The idea was part of a broadly embraced approach to reform aimed at keeping low-level criminals out of jails and prisons and addressing mental illness or addiction issues in less expensive and restrictive settings. Social reformers saw the shift as more effective and humane, while budget hawks approved of its potential for reducing costs, which Brown promised would drop by about $1.5 billion by 2015-16.

“California is finally getting its prison costs under control,” Brown said in 2012, when he laid out the state’s blueprint for change in a document titled, “The Future of California Corrections.”

Initially, the state seemed to deliver on its promise to reduce both the prison population and costs. The department eliminated triple bunk-beds and closed 15 contract facilities. Six months after realignment, the number of prisoners had dropped by 22,000.

During those early months, the department froze hiring, reduced staff through attrition and cut programming, each initiative achieving savings. By late 2012, the budget had dropped by about $1 billion from two years earlier to $8.7 billion.

But the savings were short-lived. In years that followed, the economy improved, staff was added, the legislature voted to spend more on rehabilitation, and the courts required additional spending, said Matt Cate, who headed the California Department of Corrections and Rehabilitation from 2008 to 2012.

“It’s an interesting phenomenon,” said James Austin, president of JFA Institute, a criminal justice research group. “The prison population declined, but the budget continues to rise.”

RISING COSTS

When asked why the corrections budget hasn’t decreased, California officials often point to a court order to improve inmate medical care.

In 2013, responding to the mandate, the state opened a new medical facility in Stockton, called the California Healthcare Facility, designed for inmates needing long-term inpatient medical care and intensive mental health services. The facility costs approximately $295 million annually. The state has also faced increased costs for prescription medications, including $60.6 million this year for new Hepatitis C treatments.

The overall rise in the cost per prisoner, however, has been driven far more by the salaries and benefits of employees.

One reason that personnel costs haven’t fallen in step with the declining inmate population has been a change in the staffing formula. Prior to realignment, during more than two decades of swelling inmate numbers, the state staffed facilities using a simple formula: For every six new inmates, the department hired one new staff member.

The formula meant a huge increase in prison personnel during the 1980s and 1990s, especially in the ranks of correctional officers. If the same ratio had remained in place as the inmate population fell under realignment, some 4,000 jobs could have been eliminated. But the state worried that a sharp reduction in personnel could leave facilities understaffed.

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As an alternative, the blueprint introduced a model that standardized staffing according to a facility’s physical layout, with guards and other personnel assigned at a level deemed necessary to secure and operate facilities.

Some saw the move to standardized staffing as a thinly disguised way to protect the jobs of unionized prison guards, who otherwise might have opposed the reforms.

“If they got that, they wouldn’t mount a campaign of opposition,” said Dan Macallair, executive director of the Center on Juvenile and Criminal Justice. “It’s what allowed Brown to move ahead with realignment.”

But those who were at the table during the discussions, including current and former department officials and the guards’ union, all insist that appeasing prison workers was not the reason for the shift away from the old, ratio-driven staffing model.

“From my perspective, we weren’t carrying [the union’s] water,” said then-corrections secretary Cate. “We were trying to run an appropriate system under federal court oversight, which means you’ve got a lot of things that you have to accomplish with those people.”

The JFA Institute’s Austin notes that any promise of savings was overstated from the start. A correctional facility, he notes, is “like an airplane. If that plane is full or empty, the cost is basically the same. It’s the same thing with a prison.”

OTHER BENEFITS

California prison reform advocates say that saving money was never the sole point of realignment, even if that was what helped sell Brown’s plan.

In shifting responsibility for more convicts to counties and providing money to ease the transition, the state also hoped to spur new approaches to sentencing, reformers note, including flash incarcerations, probation supervision, jail programs, supportive housing and job training.

“When you think about realignment, in some ways it was to save money. But all of us working on the bill itself … knew it couldn’t possibly save money,” said Joan Petersilia, a Stanford criminologist and strong supporter of prison reform.

Programs such as those aimed at reducing recidivism are expensive, Petersilia noted, but they have the potential to both save money and serve society in the long run. Initially, however, “good on-the-ground policies usually incur more costs,” she said.

Brown’s office declined to comment for this story, referring questions to the corrections department.

Recent CDC Secretary Jeffrey Beard, who retired last week, acknowledged that the savings haven’t been exactly as promised in the blueprint. But he said that without the reforms the state might have had to spend billions building more prisons.

“Have we achieved the savings?” asked Beard. “If we look at cost-avoidance, yes, we have achieved it.”

(Corrects paragraphs 32 and 33 spelling of Stanford criminologist’s last name to Petersilia instead of Petrels, corrects paragraphs 17 and 28 spelling to Cate instead of Cater, corrects paragraph 26 to Macallair instead of Mac all air)