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How Much Money Does the US Spend on Prisons?

The United States has the highest incarceration rate in the world. As of 2021, there were over 1.8 million people imprisoned in state and federal prisons and local jails across the country. This high incarceration rate comes at a huge cost to taxpayers. So how much money does the US actually spend on its prison system?

Total Expenditures on Corrections

According to the Bureau of Justice Statistics, in 2020 total expenditures on the corrections system in the US – including prisons, jails, parole, and probation – were $97.7 billion. This represents an increase of over 230% from just 30 years prior, in 1990, when total spending was $29.6 billion (adjusted for inflation).

The vast majority of corrections expenditures go towards imprisoning people. In 2020, around $81.2 billion was spent on prisons and jails specifically. The remaining $16.5 billion went to things like probation, parole, and other community corrections programs.

To put the amount spent on corrections in context, the $97.7 billion in expenditures represents about 1.7% of total national expenditures across all levels of government in the US. It’s also over 200% of the federal education budget and nearly 500% of the federal transportation budget.

State Spending on Prisons

Most of the spending on prisons and jails comes from state budgets. This is because around 90% of US prisoners are held in state prisons and local jails, with just 10% in federal prisons.

In 2020, states spent a total of $50.3 billion on their prison systems alone. This equates to around 4% of total state budgets nationwide being spent on prisons. However, the amount varies significantly by state. For example:

  • California spends $15 billion per year on its prison system – about 9% of the state’s budget.
  • Texas spends over $4 billion per year – around 3% of its budget.
  • New York spends $3.8 billion – around 4% of its budget.

Some states like Oregon and Connecticut spend over 7% of their total budgets on prisons. The amount each state spends is influenced by factors like the size of the prison population and the average cost per inmate.

Federal Spending on Prisons

While state prisons house the majority of inmates, the federal system holds some of the highest profile prisoners like drug kingpins and terrorists. In 2020, the federal government spent $8.8 billion on federal prisons, targeting mostly violent and higher risk offenders.

The Federal Bureau of Prisons (BOP) oversees around 151,000 prisoners in total across 122 federal facilities of varying security levels. According to the BOP, it costs an average of $37,449 per inmate per year to house federal prisoners. With security levels ranging from minimum to supermax, costs at lower security facilities can be as low as $26,000 per inmate, while the most secure facilities cost over $60,000.

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Around 19% of the BOP’s budget goes towards inmate healthcare. Their total healthcare costs reached nearly $1.6 billion in 2020. As the federal inmate population ages, these costs are expected to continue rising.

Key Drivers of High Spending

There are several key factors that drive the exorbitant amounts of spending on prisons and jails in the US:

Incarceration Rates – As mentioned earlier, the US has the highest incarceration rate in the world, currently at 655 prisoners per 100,000 residents. For context, most European countries have rates around 100 per 100,000. More prisoners means higher costs.

Sentencing Laws – Harsher sentencing laws like mandatory minimums and “three strikes” rules increase sentence lengths and the number of incarcerated. Longer sentences increase total costs.

Solitary Confinement – Around 60,000 inmates are held in solitary confinement. This is a costly form of imprisonment, estimated to cost up to three times more than general population incarceration.

Private Prisons – Private for-profit prisons actually cost more than government-run ones. They held over 115,000 prisoners in 2020.

Healthcare Costs – Inmate healthcare costs are expensive, especially for an aging prison population needing long-term care. Mental healthcare is also costly.

Staffing – Salaries and benefits for prison staff make up a major component of spending. More staff are needed for higher security prisons.

Amenities & Programming – From sports and hobby facilities to education programs, amenities for prisoners add costs but are aimed at improving outcomes.

State Prison Spending

Now that we’ve looked at the total expenditures on corrections and prisons in the US, let’s take a deeper dive into state prison spending specifically. As noted earlier, around 90% of American prisoners are in state prisons and jails.

State prison budgets go towards things like:

  • Staffing – Guards, nurses, counselors, administrators
  • Healthcare – Doctors, medications, hospitals
  • Food Services – Facilities and meals for prisoners
  • Facilities – Utilities, maintenance, construction
  • Inmate Programs – Education, job training, rehabilitation
  • Parole & Probation – Monitoring and programs for released inmates

The amount each state spends varies based on factors like:

  • Number of inmates – More prisoners means higher costs
  • Prison types and security levels – Maximum security is more expensive
  • Sentencing laws – Longer sentences increase prison time
  • Prison management – Private vs public, amenities provided
  • Labor costs – Guards’ and staff salaries and benefits
  • Healthcare – Costs per inmate for physical and mental health

To give a snapshot, here are some examples of different states’ annual prison expenditures:

California – $15 billion

Texas – $4 billion

New York – $3.8 billion

Florida – $2.7 billion

Ohio – $1.8 billion

Georgia – $1.3 billion

Pennsylvania – $2.6 billion

Illinois – $1.7 billion

Virginia – $1.9 billion

Michigan – $2 billion

As you can see, higher population states like California and Texas spend significantly more on their prison systems compared to smaller states. But costs ultimately come down to policy decisions around sentencing, security levels, healthcare, and programming for each state’s inmate population.

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Where State Prison Funding Comes From

Given the high costs of running prison systems, an obvious question is – where does the money actually come from? For state prisons, most of the funding comes from:

General state revenue – Income, sales, business, and other taxes that go into states’ general funds. For many states, around 90% of prison funding comes from general revenue.

Bonds – States may issue bonds to raise funding for specific prison capital projects like new construction.

Federal grants – A small slice of funding comes from federal grants aimed at improving state prisons. For example, the Prison Rape Elimination Act provides grants for prevention and rehabilitation programs.

Special taxes or fees – Some states generate revenue for prisons and corrections through targeted taxes or fees, like surcharges on criminal fines or fees charged to inmates. But this represents a small portion of funding.

Prison industries – Many prisons have “industry” programs where inmates work and wages go toward offsetting prison costs. However, the revenues from these are minimal compared to overall costs.

The reliance on general tax revenue means prisons must compete for funding with other budget items like education, healthcare, and transportation in the annual budget process. As costs have risen, prisons have taken up a growing share of state budgets, causing financial strain.

Recent Trends in State Prison Spending

State policymakers looking to reduce prison budgets have taken some steps to curb corrections spending in recent years:

  • Sentence reductions – Reducing mandatory minimums and allowing parole earlier in sentences for some crimes. This reduces the number and length of incarcerations.
  • Drug reforms – Reducing sentences for drug crimes and expanding diversion programs to keep some offenders out of prison.
  • Juvenile reforms – Increased age limit for trying juveniles as adults, keeping them out of adult prisons.
  • Community programs – Greater use of probation, parole, monitoring devices, mandatory treatment programs, and halfway houses to transition inmates and reduce recidivism.
  • Prison closures – Shutting down outdated or underutilized prison facilities when inmate populations decline.
  • Private outsourcing – Contracting with private prison operators (although cost savings are questionable).
  • Healthcare outsourcing – Contracting with private providers to supply inmate healthcare and trying to negotiate lower costs.

These reforms have helped lower imprisonment rates by around 13% over the past decade in the US. Prison populations are now declining in a majority of states, bringing some downwards pressure on budgets. However, meaningful reductions require more substantial reforms to sentencing policies. With prisons still consuming nearly $50 billion in state budgets, there is a long way to go to curb mass incarceration.

Social and Economic Costs

Beyond just the huge financial costs, mass incarceration also carries very real social and economic costs. These include:

  • Lost productivity – Locking away millions of adults creates lost earnings, taxes, and contributions.
  • Family impact – Families left behind struggle with effects like lost income, instability, and cycles of criminality.
  • Community impact – Concentrated incarceration damages communities and stifles economic mobility.
  • Second chance barriers – Criminal records make finding jobs and housing difficult, increasing recidivism.
  • Intergenerational effects – Parental incarceration inhibits children’s health, education, and opportunities.
  • Racial inequality – Disparities in who gets imprisoned and sentencing durations reinforce inequality.
  • Mental health effects – Many inmates suffer mental health declines that continue after release.
  • Public health risks – Prisons can increase spread of diseases like HIV and Hepatitis C.
  • Reentry programs – Rehabilitation and reentry programs get limited funding but are crucial to reducing recidivism and improving outcomes.
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While hard to quantify, most experts agree these indirect social costs are enormous and compound the direct financial costs of incarceration. Smart reforms would improve outcomes while reducing the staggering expenditures.

Key Figures from Major Prison Sentencing Cases

CrimeOriginal SentenceTime ServedUltimate Outcome
Jeffrey SkillingFraud and conspiracy at Enron24 years12 yearsSentence reduced to 14 years
Bernie MadoffPonzi scheme fraud150 years10 yearsDied in prison
El ChapoDrug trafficking, organized crimeLife sentence + 30 yearsPendingSentence upheld
Larry NassarSexual abuse of minorsUp to 175 yearsPendingSentencing underway
Julius and Ethel RosenbergEspionageDeath sentence2 yearsExecuted

Key Questions About US Prison Spending

Why does the US spend so much on prisons compared to other countries?

The US spends significantly more on prisons than other developed nations largely due to much higher incarceration rates from harsh sentencing policies like mandatory minimums and habitual offender laws. Lack of social programs and inequality also contribute to higher crime and imprisonment.

Are private prisons cheaper than government-run prisons?

No, studies show private for-profit prisons do not save money – they cost about the same or more per inmate compared to publicly operated facilities. Private prisons cut costs by reducing staffing and inmate services, not through efficiency.

How could technology reduce future prison costs?

Expanded use of tech like GPS monitoring, AI for parole decisions, computerized education, tele-health, and video visitation could potentially reduce staffing needs, recidivism, and other costs in prisons. However, upfront tech investments are needed.

What percentage of state budgets is spent on prisons versus education?

On average, states spend nearly 3 times as much on prisons as they do on education. A recent study found 11 states spent at least 5 times more per prisoner than per public school student. Spending on incarceration has grown much faster than education.

Could reducing prison populations lead to more crime?

Research shows certain reforms like earlier parole, reducing sentences for lower level crimes, and expanding diversion programs do not necessarily increase crime or recidivism if done properly. However, prisoner release policies must be balanced with public safety.


In conclusion, mass incarceration comes at an enormous monetary cost for American taxpayers, with over $80 billion spent annually on prisons and jails nationwide. While state and federal policies have aimed to curb prison growth, expenditures continue to consume an increasing portion of budgets. Meaningful reform remains a challenging balancing act between fiscal prudence, public safety, and social justice.

Reducing incarceration while improving outcomes for released inmates – through policy reforms focused on root causes of criminality – may be the only way to substantially lower the astronomical spending on prisons. With billions in crisis-level corrections costs, and millions of individuals and communities harmed by cyclical imprisonment, the fiscal and social motivations for change are powerful. But transformational reform will require a shift in public attitudes toward crime and punishment.

Prison Inside Team

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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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