The Price of Prisons - What Incarceration Costs Taxpayers - Vera Institute
January 2012 (Updated March 2012)
Executive Summary
Persistent fiscal challenges in the United States have spurred greater scrutiny of government spending. States’ corrections expenditures, which have nearly quadrupled over the past two decades, are receiving considerable attention.
These circumstances make it crucial for policy makers and the public to understand the full cost of prisons to taxpayers—something that is easier said than done. Although corrections departments pay the vast majority of costs for state prisons, other departments pay related expenses—some of which are substantial. Depending on the state, these can include employee benefits, capital costs, in-prison education services, or hospital care for inmates. Additionally, the cost of underfunded contributions for corrections employees’ pension and retiree health care plans must be included in a comprehensive accounting of prison costs.
In partnership with the Pew Center on the States, staff from the Vera Institute of Justice’s Center on Sentencing and Corrections and Cost-Benefit Analysis Unit developed a methodology for calculating the full cost of prisons to taxpayers. The application of this methodology, which was developed in collaboration with a panel of advisers in the fields of corrections and public finance and field-tested in five states, is the subject of this report.
Vera researchers found that the total taxpayer cost of prisons in the 40 states that participated in this study was 13.9 percent higher than the cost reflected in those states’ combined corrections budgets. The total price to taxpayers was $39 billion, $5.4 billion more than the $33.5 billion reflected in corrections budgets alone. The greatest cost drivers outside corrections departments were as follows:
(To complement this report, the authors have produced a series of fact sheets with details about each state’s spending. The fact sheets are available on Vera’s website, at www.vera.org/priceofprisons.)
Executive Summary
Persistent fiscal challenges in the United States have spurred greater scrutiny of government spending. States’ corrections expenditures, which have nearly quadrupled over the past two decades, are receiving considerable attention.
These circumstances make it crucial for policy makers and the public to understand the full cost of prisons to taxpayers—something that is easier said than done. Although corrections departments pay the vast majority of costs for state prisons, other departments pay related expenses—some of which are substantial. Depending on the state, these can include employee benefits, capital costs, in-prison education services, or hospital care for inmates. Additionally, the cost of underfunded contributions for corrections employees’ pension and retiree health care plans must be included in a comprehensive accounting of prison costs.
In partnership with the Pew Center on the States, staff from the Vera Institute of Justice’s Center on Sentencing and Corrections and Cost-Benefit Analysis Unit developed a methodology for calculating the full cost of prisons to taxpayers. The application of this methodology, which was developed in collaboration with a panel of advisers in the fields of corrections and public finance and field-tested in five states, is the subject of this report.
Vera researchers found that the total taxpayer cost of prisons in the 40 states that participated in this study was 13.9 percent higher than the cost reflected in those states’ combined corrections budgets. The total price to taxpayers was $39 billion, $5.4 billion more than the $33.5 billion reflected in corrections budgets alone. The greatest cost drivers outside corrections departments were as follows:
>>underfunded contributions to retiree health care for corrections employees ($1.9 billion);Among the participating states, costs outside the corrections department ranged from less than 1 percent of the total cost of prisons, in Arizona, to as much as 34 percent in Connecticut. The extra costs accounted for less than 5 percent of total prison costs in 16 states, 5 to 9.9 percent of total prison costs in nine states, and 10 to 19.9 percent of total prison costs in nine states (Arkansas, California, Delaware, Kentucky, Louisiana, Maryland, New Jersey, Washington, and West Virginia). In six states—Connecticut, Illinois, Missouri, New York, Pennsylvania, and Texas—20 to 34 percent of the total taxpayer cost of prison was outside the corrections department budget.
>>states’ contributions to retiree health care on behalf of their corrections departments ($837 million);
>>employee benefits, such as health insurance ($613 million);
>>states’ contributions to pensions on behalf of their corrections departments ($598 million);
>>capital costs ($485 million);
>>hospital and other health care for the prison population ($335 million); and
>>underfunded pension contributions for corrections employees ($304 million).
(To complement this report, the authors have produced a series of fact sheets with details about each state’s spending. The fact sheets are available on Vera’s website, at www.vera.org/priceofprisons.)