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How Much Does The Government Spend On Prisons?

The United States has the highest incarceration rate in the world, with over 2 million people currently behind bars in state and federal prisons and local jails. This mass incarceration comes at a huge cost financially to taxpayers.

In this comprehensive article, we will analyze the key statistics around the cost of running prisons and jails in America and what that means for state and federal budgets.

Annual Cost of Incarceration

The cost of keeping one inmate incarcerated for one year varies by state, but averages around $30,000 to $60,000 per prisoner. With over 2 million inmates currently jailed, that means states and the federal government spend between $60 to $120 billion annually just on incarceration costs.

State Prison Costs

The average cost to house an inmate in state prison is around $33,274 per prisoner, according to the most recent data from 2015. With over 1.3 million state prisoners, the total cost to states is over $43 billion per year.

Some states like New York spend far more, around $69,000 annually per prisoner. Other states like Louisiana pay around $17,000 per inmate. Facilities, wages, healthcare and services available explain much of the difference.

Federal Prison Costs

It costs approximately $37,000 per year on average to house an inmate in federal prison according the Federal Register. With around 180,000 federal prisoners, the total annual cost is around $6.5 billion per year. High security federal facilities cost the most, around $50,000 per prisoner per year.

County and City Jail Costs

Local city and county jails help house over 700,000 inmates awaiting trial or serving short sentences. The average annual cost comes to around $25,000 per inmate, bringing total local jail costs to around $18 billion per year. Larger cities like New York pay over $167,000 annually per inmate.

So between local jails, state prisons and federal facilities, the total incarceration bill adds up to $85 to $125 billion per year. This makes it one of the largest expenditures in many state budgets and represents an enormous cost that taxpayers ultimately bear.

Prison Costs Over Time

The high cost of running prisons is largely due to the rise in incarceration rates since the 1970s. Here is how prison populations and costs have grown over recent decades:

  • In 1980, there were 329,000 state and federal prisoners at a cost of $6.8 billion total nationwide.
  • By 1990, prison populations had grown to 743,000 at a cost of $15.7 billion.
  • In 2000, there were over 1.3 million prisoners at a cost of $36.8 billion.
  • Currently, with around 2 million inmates, costs have ballooned to over $80 billion per year.

Several factors have driven the growth in incarceration rates and costs:

  • Harsher sentencing laws like mandatory minimums and “three strikes” rules
  • War on Drugs policies sending more people to prison for nonviolent crimes
  • Lack of rehabilitation and vocational programs to reduce recidivism
  • Private prison lobbying groups advocating for laws that increase inmate population

The result has been a 500% increase in incarceration rates since the 1970s, far outstripping population growth. To reverse this unsustainable trend, states have begun reforming sentencing guidelines, expanding parole eligibility, and instituting more diversion programs to keep nonviolent offenders out of prison. But so far Prison populations have just stabilized, not materially declined.

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State Differences in Prison Costs

Prison costs vary widely between states based on differing inmate populations, facilities, rural/urban locations, services provided, labor costs, healthcare, private prisons, and more.

States With the Highest Incarceration Costs Per Inmate

  • New York – $69,355 per inmate
  • California – $64,642 per inmate
  • Connecticut – $61,320 per inmate
  • Massachusetts – $55,170 per inmate
  • Alaska – $54,066 per inmate

These states have large urban prison systems with big employee payrolls and strong prison guard unions that negotiate higher wages. Their facilities tend to be newer and have various programing and healthcare options that raise costs as well.

States With the Lowest Incarceration Costs Per Inmate

  • Louisiana – $16,812 per inmate
  • Indiana – $17,850 per inmate
  • Kentucky – $19,185 per inmate
  • Missouri – $22,350 per inmate
  • Mississippi – $23,127 per inmate

Many southern states keep costs low due to a high portion of inmates in private prisons that operate at lower costs than government run facilities. They pay lower wages to staff and often have more rural prison locations with real estate and construction savings as well.

Cost Saving Measures

To reduce the burden of incarceration costs, states use a variety of cost saving measures:

  • Private prisons – Around 8% of prisoners are in privately run prisons that have lower costs than government facilities. But there are debates around quality and safety.
  • Parole programs – Allowing nonviolent inmates to complete portions of their sentence on parole saves on incarceration costs.
  • Reduce recidivism – Keeping former inmates from returning to jail through rehabilitation, job training, housing assistance and diversion programs. Texas has used this approach to close prisons.
  • Sentence reductions – Shortening sentences for certain crimes, allowing early release and expanding criteria for parole can reduce overall prisoner populations if done carefully.
  • Prison closures – Shutting down outdated and inefficient facilities has helped states like New York lower costs.
  • Medication assisted treatment – Providing methadone and suboxone to inmates with addictions lowers relapse and re-incarceration rates after release.

While states look for cost savings, they also have to balance public safety, rehabilitation needs, prison conditions, and criminal justice reforms. With smarter sentencing policies, expanded vocational programs, and improved healthcare, states can lower prison populations humanely while still saving taxpayer dollars.

How Much Does the Federal Government Spend?

The US Federal Bureau of Prisons (BOP) manages 122 prison facilities housing around 180,000 inmates. This includes high security federal penitentiaries, medium and low security facilities, prison camps, and privately managed prisons. Key facts on federal prison spending:

  • Annual federal prison budget – In 2022, the BOP budget was $8.44 billion. The average annual cost per federal inmate is around $37,000.
  • Personnel costs – Around 65% of the BOP budget goes to inmate care and security provided by around 36,000 employees.
  • Prison construction – The BOP plans to add around 12,000 new beds by 2027 at an estimated cost of over $2 billion.
  • COVID costs – The BOP had $236 million in pandemic related costs for testing, equipment, medical care and facility sanitation during 2020 and 2021.
  • Privatization – Around 11% of federal inmates are in privately run prisons that cost 18% less on average than BOP facilities.
  • President’s budget – For 2023, President Biden has proposed a $9.9 billion budget for the BOP, a 17% increase to expand programs and workforce.

While the federal prison system houses a far smaller portion of inmates than state prisons, it still represents a major taxpayer expense. With bipartisan support for criminal justice reforms, the Biden administration and Congress are focused on measures to reduce the federal inmate population safely and close unneeded prisons.

Key Statistics on US Prison Costs

Here is a quick overview of some of the key statistics around the cost of incarceration in America:

  • Over 2 million people are incarcerated in US prisons and jails
  • The US has the highest incarceration rate in the world
  • Total incarceration costs are $80 to $120 billion per year nationwide
  • The average annual cost per inmate is $30,000 to $60,000
  • States spend $43 billion on prisons, the federal government spends $7 billion
  • 65% of BOP budget goes to inmate care and security
  • State costs range from $17,000 to $69,000 per inmate
  • 1 in 5 state funding goes to incarceration costs in some states
  • Local jails spend $25 billion annually on 745,000 inmates
  • Prison populations have risen 500% since 1970s
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As these statistics show, mass incarceration places a huge cost burden on states and the federal government. There is increased scrutiny on reducing prison budgets through policy reforms and alternative programs. But major reductions in incarceration rates have proved difficult so far. With public safety fears, political disagreements, and entrenched system interests, cutting prison costs significantly remains an ongoing challenge.

Impact of Incarceration Costs on State Budgets

With around 90% of prisoners incarcerated at the state level, rising incarceration costs have consumed an increasing portion of state budgets over the past 40 years. Key facts about the impact of state prison spending:

  • In 11 states, corrections spending has increased to over 20% of general fund discretionary dollars
  • Between 1980 and 2010, state corrections budgets grew at 3 times the rate of other spending
  • States like California, Michigan, New Jersey spend over $2 billion just on prisons annually
  • Rural states such as Montana, North Dakota have seen incarceration costs balloon – even as crime rates have declined
  • Spending on higher education has declined as prison budgets have risen
  • Every $1 million spent on incarceration leads to 1-4 fewer jobs created, slowing economic growth

Rising prison costs have forced states to make difficult tradeoffs – fewer resources for parks, schools, social programs, infrastructure, and other needs. High incarceration rates have even slowed economic growth as taxpayer dollars go to run prisons instead of funding more productive uses.

To ease budget pressures, states have begun reforming sentencing laws, expanding parole eligibility, and instituting diversion programs. But prisoner populations have largely just stabilized in recent years, not materially declined. With powerful prison guard unions lobbying to keep prisons open and running, reducing incarceration costs remains challenging politically and economically for states.

Effects of Incarceration Costs on Families and Communities

Beyond just the government, the high cost of incarceration in America takes an economic toll on families, communities, and society as well through:

  • Lower lifetime earnings – Former inmates earn 30-40% less due to stigma, gaps in work history, fewer skills
  • Difficulty finding jobs – 60-75% of former inmates are unemployed 1 year after release. 13% of African American males are ineligible for hire due to records.
  • Child support accumulation – Inmates accrue over $10 billion annually in unpaid child support during incarceration
  • Family income loss – Families lose income earner but still have costs, increasing poverty
  • Racial inequality – African Americans pay disproportionately through lost family income and post-incarceration wages
  • Foster care – Over 10% of US foster children have parents in jail or prison
  • neighborhoods – Local economies in poor neighborhoods weaken from lost income, lower demand for goods and services
  • Lower property values – Areas with returning prisoners see real estate values decline

Former inmates face daunting odds to rebuild their lives and incomes after prison. With fewer resources for families, more reliance on welfare, and damage to local economies, communities bear the heavy cost of high incarceration rates long after release as well.

Impact of Reducing Incarceration Costs

If meaningful reforms successfully reduce mass incarceration rates in the US, taxpayers and society stand to gain in the following ways:

  • State budget savings – Less spending on prisons allows dollars to go to infrastructure, education, healthcare and social programs. But some rural prisons may need replacing lost jobs.
  • Local economic stimulus – As former inmates earn more income, they’ll spend more in their communities, supporting local businesses.
  • Lower economic inequality – Narrowing income gaps will reduce the racial economic divide while improving economic mobility.
  • Stronger low income neighborhoods – Declining incarceration rates help keep families together and increase the human capital in poorer urban neighborhoods.
  • Improved family stability – Fathers and mothers staying with families instead of in prison reduces welfare reliance and keeps kids out of foster care.
  • Increased workforce productivity – Employed former inmates add more value to the economy.
  • Lower future incarceration rates – Children of inmates who grow up in families instead of foster care are less likely to commit crimes.

With an annual prison bill of over $80 billion that renders many inmates unemployable, reducing mass incarceration through smarter policy carries significant economic and societal benefits. While there are challenges, humanely lowering prison populations could save states billions in avoided costs while helping strengthen families and communities.

Policy Options to Reduce Incarceration Costs

State and federal governments have a range of policy options available to reduce the staggering cost burdens of mass incarceration:

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Sentencing Reforms

  • Remove mandatory minimum sentences for nonviolent crimes
  • Shorten overall sentence lengths for various common crimes
  • Provide sentencing flexibility for judges based on case circumstances
  • Retroactively reduce sentences already being served for certain crimes

Expand Alternatives to Incarceration

  • Increase funding for drug treatment, mental health counseling, anger management programs
  • Broader community service options and requirements
  • Require geographic monitors (ankle bracelets) rather than jail for low risk defendants awaiting trial

Support Prisoner Re-entry Into Society

  • Expand job and vocational training in prisons
  • Offer counseling and mentorship pre and post release
  • Provide transitional housing assistance
  • Ban the box on job applications so former convicts can get interviews
  • Limit restrictions on professional licensing based solely on criminal records

Parole and Probation Reforms

  • Allow prisoners over age 50 who served long sentences to complete their sentence on parole
  • Award credits toward parole for inmates who participate in rehabilitation or educational programs
  • Focus community supervision on reintegration instead of just punishment
  • Require risk-based assessments to inform parole release decisions

Improve Prison Conditions and Healthcare

  • Increase mental health and addiction treatment services for prisoners
  • Expand educational programing to reduce recidivism
  • Reform solitary confinement policies shown to cause psychological damage
  • Better prepare inmates for finding jobs before release
  • Reduce rates of inmate assaults, self-harm and suicide

With a combination of reforms that improve rehabilitation and carefully reduce sentences for nonviolent offenders, states can lower incarceration rates in a responsible way that improves lives while reducing taxpayer costs. But such policy changes face push back from those focused on maximum punishment. Achieving reform requires strong public pressure on politicians to prioritize alternatives to incarceration.


With an annual nationwide cost of $80 billion and millions facing lost economic opportunity, America’s high incarceration rates place a heavy burden on taxpayers, communities, families, and the imprisoned. Over time, state and federal criminal justice policies have increasingly relied too heavily on incarceration while underutilizing more cost-effective methods to hold offenders accountable.

Promising reforms exist to improve rehabilitation programs, relax excessive sentences, expand parole eligibility, and provide transitional services and employment assistance. But overcoming political divisions, public fears, and entrenched corrections budgets remains difficult.

With work at the state and federal level, and greater public understanding of the high costs versus benefits, policies may continue to change gradually. But the US has a long path ahead before it achieves an incarcerated population in line with other industrialized nations.

FAQs on the Cost of Prisons

How much does it cost taxpayers per year to incarcerate someone?

The average cost to incarcerate one prisoner for one year is around $30,000 to $60,000, depending on the state. That factors in facility maintenance, staff payroll, healthcare services, food, and other costs. Federal prisoners cost approximately $37,000 per year on average.

What country spends the most on prisons per capita?

The United States has the highest incarceration cost per capita in the world. The US spends over $80 billion annually on federal, state, and local prisons and jails. With only 5% of the global population, the US has around 20% of the world’s prisoners.

Why has the cost of prisons risen so much since the 1980s?

Stricter sentencing laws, mandatory minimums, the War on Drugs, lack of rehabilitation programs, and private prison lobbying have led to a 500% increase in US incarceration rates since the 1980s. As inmate populations ballooned, facility, staffing, healthcare and service costs grew dramatically as well, despite crime rates falling sharply.

Which states have the most expensive prison systems?

New York ($69,000 per inmate), California ($64,000), Connecticut ($61,000) Massachusetts ($55,000) and Alaska ($54,000) have the highest average annual costs. High urban labor costs, strong prison guard unions, and generous staff pensions drive up expenses.

How could smarter sentencing reform help lower incarceration costs?

Reducing mandatory minimum sentences, allowing parole earlier, ending 3 strike policies, and relaxing sentencing guidelines for certain crimes can responsibly lower prison populations. Also emphasizing rehabilitation programs to reduce recidivism rates after release can produce major cost savings long-term.

Prison Inside Team

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We are dedicated to exploring the intricacies of prison life and justice reform through firsthand experiences and expert insights.

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Welcome to ‘Prison Inside,’ a blog dedicated to shedding light on the often hidden and misunderstood world within correctional facilities. Through firsthand accounts, personal narratives, and insightful reflections, we delve into the lives of those who find themselves behind bars, offering a unique perspective on the challenges, triumphs, and transformations that unfold within the confines of these walls.

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