Last fall, when the Department of Corrections opened its second full-scale prison near Corcoran in Kings County, the largest prison expansion program in the nation's history drew to a close.

In just 15 years, California built 21 prisons, with construction costs nearing $5 billion. Interest on the construction bonds will cost billions more. And the annual cost of operating prisons has increased over the last decade from $2 billion to nearly $4 billion a year - making corrections the fastest growing demand on the state general fund.

But California's prisons are more crowded today than when the building program began and the Department of Corrections asserts that California must immediately begin another round of prison expansion nearly as large as the one just completed.

Prison officials estimate that within two years the state will run out of space for additional inmates. Without new facilities or another strategy for dealing with felons, the state could easily be required by a federal court to release prisoners before they have served their time. The problem is real. It is upon us now. And it must be solved.

The Little Hoover Commission, in a report released in January, recommended to the governor and the Legislature reforms that it confidently believes would resolve the prison overcrowding problem and make California communities safer - all at less cost to the taxpayer than a policy that relies simply on building more prisons.

The Little Hoover Commission is a small state agency charged with reviewing state policies and programs and recommending improvements. The Commission is comprised of citizens and lawmakers and is bipartisan by statute and in spirit. The report, Beyond Bars: Correctional Reforms to Lower Prison Costs and Reduce Crime, already has inspired significant legislative proposals that could be the foundation for enacting a cost-effective corrections strategy.

The commission was impressed by a few important statistics:

• While more felons are going to prison for a longer time, 90 percent of all prison inmates are eventually returned to our communities - and half of them will be released within two years. Each year, more that 100,000 inmates are released from state custody.
  
  
• More than 80 percent of inmates are addicted to drugs or alcohol. Half of them cannot read at the sixth-grade level. Moreover, the vast majority of inmates do not receive education, work training or drug treatment - even though those services have proven repeatedly to help inmates successfully reintegrate into society and are far cheaper than re-incarcerating inmates.
  
  
• A full two-thirds of all of the inmates entering state prisons either violated the condition of their parole or committed new crimes while on parole. While some of those parolees committed serious and violent crimes, the vast majority of returning parolees committed low-level property or drug crimes.

This recycling of inmates contributes significantly to the growing costs of building and operating prisons. At any one time, 26,000 parole violators are sitting in state prisons. And those who commit new crimes often come back as second- or third-strikers - staying for years instead of months no matter what crime they committed. In California, a greater percentage of parolees is returned to prison than in any other state. While that high return rate may be a sign of close supervision, it undeniably imposes higher costs - on taxpayers and on crime victims.

Charles G. Bakaly Jr. is a retired senior partner of O'Melveny & Myers. He is a mediator with the Bakaly and Friedman Mediation Dispute Resolution Group in Los Angeles. He served as chair of the Little Hoover Commission's prison issues subcommittee. His term on the commission ended January 14, 1998. The Little Hoover Commission can be reached at (916) 445-2125.

The commission examined these and other trends and made recommendations in three areas:

First, California needs an integrated local and state correctional system. Local correctional agencies play a critical role in public safety, but their efforts have been increasingly frustrated. Budget woes have curtailed programs for dealing with low-level criminals and jails are now crowded with two- and three-strikers who insist on sitting out a trial. Meanwhile those felons who do go away to prison come back and most resume their criminality. In other states, coordinated state and local efforts have resulted in community corrections programs that prevent many criminals from re-offending while saving room in prison for the worst of the worst.

Secondly, California needs to maximize the use of its existing jail and prison facilities. While we have made large investments in these facilities, the focus has been on punishment rather than rehabilitation. In fact, the facilities should do both. We now have convincing evidence that inmates who are given education, work training, drug treatment and counseling stand a much better chance of living crime-free once they are released. Jail and prison should not be a nice place to be, and, having walked the yards of several California prisons, I can tell you they are not. And some people still think it is not right to spend money on "services" for criminals. But the cold reality is the vast majority of them will be released, and without those services most ex-cons will commit more crimes, create more victims, and cost taxpayers even more in terms of re-incarceration.

The economics are very clear. A Columbia University study released in January showed that to provide an inmate with the full array of education and drug therapy costs $6,500 a year - or about what it costs to incarcerate an inmate for four months. For every inmate who subsequently remains crime free, the benefit to society is $68,000 in the first year - money saved on police, court and prison costs. That means the programs are cost-effective if just one in 10 parolees does not return to crime.

And it is reasonable to assume that programs can turn around more than one inmate in 10. At the R.J. Donovan state prison near San Diego, inmates who participated in the Amity Foundation's therapeutic community in prison and participated in the aftercare upon release showed dramatic gains. While 65 percent of inmates in a control group were re-incarcerated within two years, only 16 percent of those who completed the aftercare were re-incarcerated.

Third, California needs to expand the correctional system through competitive procedures. The commission recommended an open and comprehensive planning process that would allow all of the options for meeting correctional needs to be explored. Once a plan is developed and authorized by the governor and the Legislature, the commission advocates a competitive process that allows for state and local public agencies, non-profit groups and private companies to compete. The state now has the option of giving these contracts to the most capable and most willing organizations - holding them accountable for a correctional system that reduces future crimes.

These are big steps that need to be taken in a policy area that in recent years has been defined by stalemate. We likely will have to begin small: by expanding parole services, and making sure that any additional facilities include the programs known to reduce recidivism. For all new programs, the commission advocated independent evaluations so that policy makers and taxpayers will know they are getting what they paid for - so ineffective programs can be stopped and effective programs can be expanded.

None of these programs would result in fewer violent or serious felons going to prison or more felons being released sooner. All of these programs hold out the potential to reduce crime while simultaneously curtailing the growth in the public funds spent on corrections.

And finally, without these programs the state will not have the physical capacity to continue implementation of Three Strikes, 10-20-Life and other important sentencing statutes that are essential to protecting the public from serious, violent and unrepenting criminals.