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State officials filed the plan, which would reduce the state's 143,000 inmate population by 33,000, with federal courts Tuesday.
California voters in November would have to approve taxes to fund the plan, and state legislators also would have to approve money for the measure, officials said. The first year of the plan would cost $460 million, a state corrections spokesman said.
"There is still a risk associated with long-term funding for this plan," California Department of Corrections and Rehabilitation Secretary Matthew Cate told reporters. "The option is we do nothing or we wait until November, or we extend the revenues and we start and we demonstrate to the court that we can get this done."
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