Over the past decade, states have enacted hundreds of criminal justice reforms — from reclassifying drug possessions to reducing mandatory minimum sentences — often with the promise of both greater fairness and lower costs. Yet while these policies have succeeded in driving down incarceration rates, they have failed to deliver the taxpayer savings that many conservative lawmakers expected when they pushed for criminal justice reform.
This is because incarcerating criminals is expensive. Using the aggregate division method — taking the total cost to incarcerate for a year and dividing it by the average number of inmates a state houses in a year — state per-prisoner expenditures range from $22,981 per prisoner per year in Arkansas to $307,468 in Massachusetts. So reducing the prison population by 100 people, decarceration advocates argue, should yield an annual savings of over $2.2 million in Arkansas and over $30 million in Massachusetts.
But in the years since the wave of reforms, neither overall state budgets nor department of corrections budgets have declined. In fact, state budgets increased in every state and state corrections budgets increased in all but two states. So why didn’t the promised fiscal benefits to taxpayers come to fruition?
First, it’s important to understand that state corrections budgets have always made up a relatively small percentage of overall state expenditures — never more than 5 percent. This is far below the cost of education (25-35 percent), public welfare (20-25 percent), highways (5-10 percent), and hospitals and health care (5-10 percent). It was always going to be hard to cut overall state spending by reducing one of the smaller budget items.
Another factor is the way corrections costs actually break down. The vast majority of corrections costs are either fixed or long-run marginal costs — meaning they are only affected after a shift in the prison population is large enough.
This is best understood through an analysis done by the Illinois Sentencing Policy Advisory Council (ISPAC) in 2021, which found that the annual per-inmate cost to the state was $69,811. But those costs broke down to $5,133 in fixed costs, $54,444 in long-run marginal costs and $10,234 in short-run marginal costs. Importantly, the long-run marginal costs do not kick in all at once. ISPAC estimated that with a reduction of about 500 inmates the savings in per-inmate, per-year cost was $11,076; at about 1,000 inmates that figure was $12,546; and at about 3,000 inmates it was $49,290.
This means that an overnight release of 1,000 state prison inmates in Illinois would yield a taxpayer savings of only about $12.5 million, not the $70 million suggested by the aggregate division method. For context, $12.5 million represented 0.083 percent of the state’s $1.5 billion corrections budget in 2021 and 0.0029 percent of its $42.9 billion general fund budget.
But despite a 24 percent reduction in state prison populations nationwide, states didn’t experience budgetary declines at all. Instead things got more expensive — nearly 28 percent more expensive. And a regression analysis comparing state prison populations and state corrections spending in 2010 and 2023 found no statistical relationship between the two data points.
The disconnect could have multiple explanations, including that the cuts to state prison populations simply haven’t been deep enough to result in real taxpayer savings. But deeper cuts in state prison populations would likely require that states either release violent and recidivist offenders or choose not to incarcerate them in the first place.
While Americans often think that we incarcerate a large number of nonviolent drug offenders, 63 percent of state prisoners are in for violent offenses. Additionally, 76 percent of state prisoners had five or more arrests prior to their current incarceration.
Not incarcerating these offenders would have significant negative public safety ramifications: Study after study has found a significant crime reduction benefit to incapacitating violent and high-rate offenders.
Therefore, unless state policymakers are prepared to risk public safety to achieve the prison population declines needed to save taxpayer money, they ought to abandon the fantasy of achieving those savings through decarceration.
Joshua Crawford is a public safety fellow with the Georgia Center for Opportunity and the author of a new Manhattan Institute report, Policy Pruno: The Inability of Policymakers to Save Taxpayer Dollars Through Reducing Prison Populations at the Margins, from which this commentary is adapted.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
Related Articles
