While some Texans may think the Sunset Advisory Commission regulates the time of day, it is actually a unique state entity that conducts wholesale reviews of state agencies to determine if they should set with the sun or continue on a different trajectory.

In the case of the Texas Youth Commission (TYC) and Texas Juvenile Probation Commission (TJPC), Sunset has recommended merging the two agencies into a “Texas Juvenile Justice Department.”

Consolidating the two agencies would save taxpayer money on administrative expenses. But the key to limiting incarceration costs is a strong local probation system, and it is far from certain whether an agency whose budget is primarily based on incarceration can also be an advocate for probation.

The state’s adult prison population has increased 300 percent and the state’s corrections budget has quadrupled since adult probation was consolidated from a separate agency into the Texas Department of Criminal Justice in 1989.

Although the consolidation recommendation has attracted the most attention, Sunset’s proposed pilot program represents the most fundamental and welcome shift in juvenile justice policy.

The recommended pilot program would allow county probation departments to keep some of the funds that now go to incarcerate that county’s youths at TYC. In Ohio and Illinois, this approach has proven to save money and reduce recidivism. Youths benefit from being closer to their families and communities, while taxpayers save because local solutions cost less than TYC.

In this scenario, TYC would compete on recidivism and cost with local lockups called post-adjudication facilities run by counties and private operators, as well as non-residential alternatives such as day reporting centers. It would also eliminate the fiscal incentive to unnecessarily refer youths to TYC in order to preserve county funds.

In Ohio, this remittal of funding to counties reduced commitments to state lockups by 36 percent and cut recidivism from 54 to 22 percent. (TYC’s recidivism rate is 52 percent.) Under Ohio’s Reasoned and Equitable Community and Local Alternative to Incarceration of Minors (RECLAIM) funding system, juvenile judges may use the same pool of funds allocated to committing non-violent youth to state lockups for community-based options.

The RECLAIM model does not cover youth convicted of the most serious violent offenses. These are actually the youths with whom TYC is best equipped and most effective to deal through its Capital Offenders Program.

Ohio’s success with pooling funds is not unique. A similar pilot program in Illinois called REDEPLOY reduced youths sent to state lockups by 44 percent and saved $11 million over two years.

The savings in Texas from this pilot program could be much greater. The Sunset Commission identified three TYC facilities that should be closed, each of which holds fewer than 100 youths. Shutting these units down would save taxpayers $25.4 million per year.

Texas already has 32 post-adjudication facilities at the county level, costing $90 a day per youth compared to TYC’s $153 per youth. In the major urban counties that account for 80 percent of TYC commitments, post-adjudication facilities could compete with TYC to attract placements.

Transparency and performance measures are critical to effective competition. Armed with information including recidivism benchmarks on each TYC and local facility, judges would be empowered to choose the best option based on outcome data for similarly situated youths.

With this pilot program, counties will be incentivized to carefully evaluate youths currently being sent to post-adjudication facilities to identify those that would be appropriate for day reporting centers. Over time, high-performing local facilities may expand to meet demand if TYC continues to produce poor results.

Competition can make any system better, and the juvenile justice system is no exception. Whatever the agency running state lockups is called, what is most important is that it competes with local and private providers. The market will then deliver the verdict on how many youths should be in state custody.

Marc A. Levin, Esq., is Director of the Center for Effective Justice at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.