A large prison riot in Chino, California earlier this month highlighted a major problem facing the state of California: as it makes major budget cuts, it is struggling to figure out how to house all its prisoners and how to pay for it.

Because the state prison budget will be cut by 10 percent, programs that help inmates go back to a normal life will be eliminated. Half of the rehabilitation programs for inmates will go away, and health care services for inmates will also suffer. A judge has also ordered that 40,000 inmates be released from the system in order to reduce overcrowding.

In this report, NewsHour correspondent Spencer Michels explores the complicated issues facing the troubled California prison system.

"The governor and lawmakers have to figure out how to squeeze $1.2 billion out of a system already overextended and overcrowded without making it worse." - Spencer Michels

"We're cutting hundreds of positions from headquarters to try to run a leaner prison system. Secondly, and unfortunately, we're going to cut about half of our rehabilitative programs." - Matthew Cate, secretary, California Corrections

"The men that we release from prison now, we have a 75 percent recidivism rate in California. Men who have done life crimes, who have the opportunity of being paroled, we have a 0 percent recidivism rate. We've worked on ourselves for so many years." - Ernest Morgan, Jr., inmate

What is a budget? How can a budget become a problem for an organization?

What do you know about California?

When a state doesn’t have enough money, how does that create even more problems for the state?

How should California deal with the prison problem? Should they let more prisoners out? Or cut more services to prisoners?

Were you surprised to hear that prisoners who spend longer time in prison have a lower recidivism rate?

What other changes could California make to keep more people out of prison?