One way to save $1.2 billion is the early release of thousands of inmates.

When lawmakers fixed California's deficit-plagued budget last month, they left one aspect of the spending plan unfinished.

The revised budget calls for cutting $1.2 billion from the state corrections department but does not specify how to do it. The solutions, which include releasing some prisoners before they serve their full terms, are such a potential lightning rod that lawmakers agreed to deal with them later.

That time arrives this week when lawmakers return from their summer recess.

Republican Gov. Arnold Schwarzenegger is joining majority Democrats to propose reducing the state inmate population by 27,000 within the first year. They would do that primarily by diverting thousands of convicts to local jails, placing them under house arrest or reducing some crimes to misdemeanors that would allow criminals to escape prison time.

The debate over how to make the cuts in the prison system's budget comes on the heels of a riot that injured 175 inmates and left portions of the California Institution for Men in Chino uninhabitable.

Republican lawmakers are against an early release program, saying it would flood the streets with felons. They forced a delay on the details of the prison cuts until after lawmakers' three-week summer vacation.

Majority Democrats could approve the plan on a simple majority vote, meaning they would not need Republican support. But some Democrats also have concerns about releasing inmates before they have served their full sentences, so any solution might have to be bipartisan. "They are hellbent on putting some thoroughly dangerous individuals out on the street," said Republican Assemblyman Jim Nielsen of Yuba City, a former state parole board chief. "I believe we can do it without doing mass releases. And that's what they've been talking about - mass releases of these individuals into our communities."

Schwarzenegger said his approach to cutting the $10.5 billion corrections department budget would avoid freeing inmates who have been convicted of violent crimes or sex offenses.

Over two years, the governor's plan would trim the inmate population by 37,000 inmates - from 168,000 to about 131,000 - and eliminate 5,000 corrections jobs.

The administration would use home, hospital or nursing home confinement for ill or infirm inmates, some of those over age 60 or any inmate with less than 12 months left to serve. Corrections Secretary Matthew Cate said such a plan does not constitute an early release because the inmates' locations would be monitored electronically.

"They'll still be within the jurisdiction of the department," he said. "They just won't be taking up a brick-and-mortar bed."

The administration also proposes sending more thieves to county jails instead of state prisons. For example, writing bad checks, receiving stolen property, petty thefts and some vehicle thefts would be reduced to misdemeanors, while the financial threshold for prosecuting thefts as felonies would rise from $400 to $2,500.

Under the governor's proposal, inmates also would be able to earn parole earlier by completing education, drug treatment and other types of rehabilitation programs.

Schwarzenegger also proposes commuting the sentences of inmates who would be deported upon their release. He would free only those convicted of nonviolent and non-sex offenses, Cate said.

That would reduce by nearly half the roughly 19,000 immigrants serving California prison sentences.

The state also would reduce supervision for parolees convicted of nonserious, nonviolent and non-sex offenses, while making it more difficult to send them back to prison for parole violations.

"We have not done a very good job in California of distinguishing between people who are violent and who belong in prison for a long time and those who could succeed on the outside with supervision," said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

Republican Sen. George Runner of Lancaster, the author of several anti-crime initiatives, said the state should cut rehabilitation programs and close unneeded juvenile prisons instead of easing sentences.

If lawmakers do move toward an early release program, it also would help California comply with a recent federal court order to reduce the prison population by 40,000 inmates to improve medical and mental health care.

"These are going to be the toughest votes in some politicians' career," said Nick Warner, legislative director for the California State Sheriffs' Association. "But we don't have a choice; they have to do something."