States now spend $40 billion to keep people in prison. (Photo by Michael Freeman).

WASHINGTON – At a time when the White House, Congress and the state governments are looking to cut spending in the face of rising budget deficits, a new report indicates that U.S. taxpayers are shelling out more than $40 billion a year on one budget item: incarceration.
With the average daily inmate population in U.S. jails and prisons now at 1.2 million, the state governments as well as the federal government are committing billions to keeping people locked up, noted Michael Jacobson, the executive director of the Vera Institute of Justice.
During an interview with the program Washington Journal on C-Span,which  aired live on Feb. 13, Jacobson said prisons are “more expensive than most people imagined.”
Founded in 1961, the Vera Institute of Justice is an independent non-profit national research and policy organization based primarily out of New York City, but with offices in Washington and New Orleans. The Vera goal is to find solutions to weaknesses in the criminal justice system, including the courts, law enforcement agencies, and social service providers.
The organization’s new report, “The Price of Prisons: What Incarceration Costs Taxpayers,” was released on Jan. 26.
The introduction to the report notes that “Staff from Vera’s Center on Sentencing and Corrections and Cost-Benefit Analysis Unit developed a methodology to calculate the taxpayer cost of prisons, including costs outside states’ corrections budgets. Among the 40 states that participated in a survey, the cost of prisons was $39 billion in fiscal year 2010, $5.4 billion more than what their corrections budgets reflected.”
How much the states spend on prisons varies. The report examines the costs in the 40 participating states, and found that the Florida Department of Corrections, for example, had $2.05 billion in prison expenditures.
“However, the state also had $29.4 million in prison-related costs outside the department’s budget,” the report notes. “The total cost of Florida’s prisons — to incarcerate an average daily population of 101,324 — was therefore $2.08 billion, of which 1.4 percent were costs outside the corrections budget.”
Prison costs outside the DOC’s budget included underfunded retiree health care contributions, and private prisons.
“In 2010, the state of Florida contributed 32.3 percent of the annual amount required to fully fund retiree health care benefits in the long run,” the report notes. “The state will need to pay the remaining $20.4 million, plus interest, to provide for the retiree health care benefits of corrections employees that are scheduled under current law.”
Likewise, “The state’s Department of Management Services’ Bureau of Private Prison Monitoring oversees Florida’s seven private prisons. The bureau spent $2.2 million in 2010.”
In the interview with Washington Journal – available to view on Vera’s web site at, Jacobson noted, “There’s a great deal of variation” in how much each state spends on prisons. New York, Maine and Connecticut, he noted, spend “significantly” more on incarceration than other states.
But all states are now investing a lot of taxpayer dollars to keep people in prison, Jacobson added, and that includes $335 million in hospital care costs for inmates, and $613 million in benefits for employees of the correctional systems.
What is likely the biggest cost, he added, is the “hugely high and costly recidivism rate.”
The high number of people who are sent to prison, released, and then end up back behind bars, he said, is putting a massive drain on the entire corrections system, which appears more focused on protecting the public from lawbreakers than in rehabilitation of inmates.
That could be a mistake in the long run, Jacobson said, because high recidivism rates drive up the cost of operating prisons.
“State policy makers and the public have to put a spotlight on reforming the system,” he said. “More than two-thirds of state prisoners released in 2004 were re-arrested. For the $40 billion we spend on prisons, a huge chunk of that is on people returning to prison. That’s a huge problem. It drives up the cost of running prisons.”
States could reduce those costs, he said, by investing more in Re-Entry programs, which help inmates being released from prison to get reintegrated into their community, by introducing them to service programs that assist them with opportunities for employment, housing, health care, substance abuse treatment, mental health counseling, and other programs.
“If you do it correctly, if you lower recidivism rates, you get safer streets and fewer victims,” he said.
All of this is in part a political reaction to the issue of crime, Jacobson said, adding that up until the 1960s, states did not spend anywhere near this much on incarceration. But as crime became a political issue, he added, the states responded by building more prisons and issuing tougher prison sentences.
“Prisons have grown over the last 30 years in this country,” he said.
One thing that does not appear to be significantly driving up prison costs, he said, is public employee unions that represent prison and jail workers, though he added that northern states have “very powerful corrections employee unions.”
In recent years, though, many of those unions have put less of a focus on pay raises than on safe working conditions, Jacobson said, with union leaders calling for policies designed to “lower violence in overcrowded prisons. That’s a high priority for unions now, higher in some cases than pay.”
What is having a big impact, he said, is very tough anti-drug sentences that do not appear to be having an impact on reducing either drug use or sales.
“Once you’re in prison, if you have high levels of drug use and mental health issues, there will be a higher cost,” he said. “But everyone is expensive when they get into prison.”
Still, the number of “low level dealers” in prison has increased dramatically, Jacobson said. But as soon as they go to prison, new users and sellers quickly replace them.
“When you put a low level seller or user in prison, we know someone else will be on the street dealing, and it does not deter people to send them to prison for this,” he said. “Those people, when they come out of prison, tend to go back to prison in big numbers. We know prison is not a successful response to that.”
While states have traditionally spent more on incarceration in an effort to combat rising crime rates, Florida has moved in the opposite direction this year. Gov. Rick Scott pledged to cut $1 billion from Florida’s prison budget and transfer that money to education, and his office is closing seven state prisons and work camps by July 1.
Despite the closings, DOC insists that no inmate would be released early, and they will get transferred to other facilities. There’s enough prison bed space available to meet Florida’s existing prison population, DOC noted.
“Declining prison admissions has led to a surplus of prison beds, allowing us to pare down our budget shortfall by consolidating and closing our older, less efficient facilities,” DOC Secretary Ken Tucker noted.
Last year, Gov. Scott cited a reduction in crime in Florida as a reason to make the state prisons operate with more efficiency. He then proposed eliminating $1 billion from the prison budget. The governor’s office is targeting cuts in salaries for DOC employees and reductions in health care costs for inmates, which could include privatizing those services. The governor is also making a push to expand vegetable farms run by inmates — essentially asking those who are incarcerated to grow their own food.
The proposed closings are an ongoing part of these cost-saving measures.
Florida now houses 102,000 inmates in 63 state prisons, and supervises more than 115,000 active offenders on community release supervision — the third largest prison system in the nation. But a falling crime rate gives the state a rare opportunity to find savings within the prison system, the governor’s budget report claims.

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