Fewer People in Prison Saves Money, Right? Not Always, New Price of Prisons Report Shows

New York, NY – Bipartisan-led sentencing reform since the 2008 recession has begun to turn the tide on mass incarceration, and today there are five percent fewer people incarcerated in state prisons than in 2009. Reform is often driven in part by fiscal pressures and, accordingly, budget savings are often an assumed byproduct of downsizing prisons. But while this sometimes happens, it is by no means always the case, according to a new report and accompanying interactive data tool from the Vera Institute of Justice. The report takes stock of prison spending today and reveals that although the nation is incarcerating fewer people, reducing prison populations does not automatically lead to cost savings for states.   

The Price of Prisons: Examining State Spending Trends, 2010-2015 builds on Vera’s widely-cited 2012 Price of Prisons report. The new report found that since 2010, 13 states have successfully reduced their prison populations, prison spending, and crime rates simultaneously, demonstrating that it is possible to capitalize financially on reduced incarceration while ensuring public safety. However, state spending on prisons is influenced by a range of factors beyond prison populations—including rising employee pension and prison health care costs—and in 25 other states, spending on prison has increased.     

“As states take steps to reverse course on mass incarceration, it’s crucial that they understand how policy choices affect their budget,” said Christian Henrichson, research director of Vera’s Center on Sentencing and Corrections. “While savings are not guaranteed when prison populations drop, several states have proven that it’s possible to reduce both the number incarcerated and prison spending, all while maintaining public safety. But, even for these states, the work is not done as it is essential that they direct these newfound savings into the communities that have been devastated by the overuse of incarceration they now seek to unwind.”   

To evaluate where state prison spending stands today and how it has changed, Vera issued a nationwide survey—answered by 45 states—and conducted in-depth interviews with state prison budget officials to better understand prison spending trends. The report found that the primary challenge to reducing prison spending is to reduce prison staff commensurately with the declining prison population: employee-related costs made up 68 percent of state prison spending in 2015.   

The report also found that:

  • Out of 23 states that decreased their prison populations since 2010, the 13 who also reduced their spending saved a total of $1.6 billion. Many saw savings because they were able to close facilities and reduce staff, and all experienced drops in crime.
  • However, ten other states have spent more on prisons even as their prison populations declined. This occurred largely as a result of rising employment and health care costs. For example, California experienced declines in both prison population and staff, but still spent $560 million more annually because of increased salary and employee benefit costs.
  • Fifteen states saw a rise in both prison populations and spending. With more people held in prison, a state must pay for more employees, potentially open new facilities or wings, and expand services like health care for people who are incarcerated.
  • But in seven other states, spending on prisons declined even while populations grew, meaning that budget pressures have forced corrections agencies to do more with less, at risk of understaffing. For example, in Oklahoma, the prison population increased by six percent while a state budget shortfall prompted a 14 percent decline in the number of corrections staff.
  • Overall nationwide spending on prisons has declined by $232 million since 2010, mostly due to the net drop in prison populations.

The full report—including data on the taxpayer costs of incarceration for 45 states, updated for the first time since 2012—and accompanying interactive data visualization can be found at www.vera.org/price-of-prisons.

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