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How Much Money Goes Into The Prison System?

The United States has the highest incarceration rate in the world. As of 2023, over 2 million people are behind bars in America. This massive prison population comes at an enormous cost to taxpayers and communities.

This article will analyze the various expenses that go into maintaining the prison system and argue that the money could be better spent on rehabilitation and prevention programs.

The Overall Costs of Incarceration

The costs of imprisoning people are staggering. According to the Vera Institute of Justice, in 2019 state spending on incarceration totaled $50 billion. The federal Bureau of Prisons budget was an additional $7.1 billion. In total, American taxpayers spend over $80 billion per year on prisons and jails. This comes out to an average of $31,286 per inmate nationally.

Some states spend far more than others. New York leads, with an average cost of $69,355 per prisoner. Other high-spending states include California at $64,642 and Connecticut at $61,356. Rural states tend to have lower costs, like Mississippi at $14,780 per inmate. But even at the lowest end, incarceration remains expensive.

Taxpayer money goes towards a variety of correctional costs:

  • Facility operations and maintenance – This includes prison staff salaries, inmate necessities like food and medical care, and infrastructure upkeep. About half of most corrections budgets are for staffing.
  • Inmate health care – Incarcerated people have higher rates of chronic conditions and the law requires access to care. Health care averages about 20% of per-inmate costs.
  • Capital costs – Building new prisons and renovating old ones is expensive. These big-ticket capital costs make up around 9% of state corrections budgets.
  • Transportation costs – Transporting prisoners between facilities requires staff time and fuel. These costs account for 4% of state prison spending.
  • Parole/probation – Many released inmates are monitored in the community, requiring supervision officers. This makes up 12% of state corrections budgets.

While the raw numbers are huge, the opportunity costs are also immense. All the billions spent on prisoners could alternatively go to roads, schools, health care, tax cuts, or more. Each dollar in corrections can’t be used elsewhere.

The Costs of Mass Incarceration Over Time

Prison populations and spending have exploded over the past 40 years. Let’s examine the scale of growth since the 1980s War on Drugs:

  • In 1980, there were about 500,000 people behind bars – by 2016 there were over 2.1 million, more than a fourfold increase.
  • Corrections budgets ballooned along with inmate counts. In the early 1980s, states were spending $6 to $8 billion annually on prisons. By 2016 that reached over $50 billion, up to a sevenfold increase adjusting for inflation.
  • The federal prison system grew even faster. Its budget shot up from $300 million in 1980 to $6.9 billion in the present day – a more than twentyfold jump accounting for inflation.

While some new facilities were needed for surging populations, states went on huge prison construction sprees. According to sociologist Ruth Wilson Gilmore, from 1982 to 2001 spending on prison construction increased six times faster than spending on higher education construction in New York.

There is agreement across the political spectrum that the War on Drugs and harsh sentencing laws overfilled prisons. While inmates certainly shoulder blame, many argue the system grew too punitive – spending exorbitant amounts of money locking up nonviolent offenders who could be managed safely in their communities.

Impacts on State and Local Spending

Money for corrections comes out of state and local budgets that have many other demands. As incarceration rates spiraled upwards since the 1980s, other types of spending have been squeezed.

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Researchers find that in many states, rising imprisonment may crowd out spending on education, health care, transportation, and other priorities:

  • A 2016 study found that every $1 spent on corrections leads to reductions in welfare spending of approximately $0.37. Budgets for housing, education, hospitals, and other services are all impacted.
  • States with the largest prison growth from 1985 to 2000 had the slowest growth in key services like primary and secondary education. Limited tax revenue had to be split across more and more prisoners.
  • Data shows that counties with growing prison populations cut back on social services and infrastructure maintenance. Jail expansion also indebted local governments, leaving less fiscal flexibility.

Critics argue that many states improved public safety at the cost of impoverishing other public services. And research shows that social programs like education and employment actually reduce crime more effectively than imprisonment in many cases.

Impacts on Specific State Budgets

To illustrate the budget tradeoffs, let’s spotlight the cases of California, Texas, and New York:

  • California – From 1980 to 2006, the Golden State’s corrections budget grew from 2% to 11% of general fund expenditures. Over that time spending rose by 660% adjusted for inflation even as funding for higher education declined by 13%.
  • Texas – From 1985 to 2005, the Lone Star state increased imprisonment by 300%. This correlated with a 12% decrease in inflation-adjusted per capita health and hospitals spending. Also from 1995 to 2004, welfare cash assistance declined by 50%.
  • New York – From 1982 to 1999, New York’s corrections budget tripled from 2% to 6% of overall spending. Meanwhile state allocations to SUNY and CUNY community colleges declined by 30%.

While these examples are simplifications, they demonstrate that states with soaring incarceration rates often spend less over time on other priorities like education, health care, and social welfare. With limited budgets, more prisoners displace funding for other public institutions.

Costs Per Prisoner Vary Widely

Prison costs are driven by key factors like facility size, security levels, locations, healthcare needs and state outsourcing decisions. Small states with many maximum security prisoners tend to spend the most.

Here are some 2019 examples of different costs per inmate in state prisons:

  • New York – $69,355
  • California – $64,642
  • Connecticut – $61,356
  • Massachusetts – $58,317
  • Oregon – $58,612
  • Vermont – $52,874
  • Florida – $54,544
  • Texas – $50,633
  • Mississippi – $14,780
  • Alabama – $15,800
  • Louisiana – $16,804
  • Indiana – $14,836

In small states like Vermont and Oregon, economies of scale make prison more expensive since correctional facilities cannot maximize capacity. States like New York with many inmates in costly maximum-security also spend more per person.

Southern states like Mississippi and Louisiana that pay corrections staff less have the lowest costs. The location, size, and security levels of prisons drive large variations between states.

The Benefits and Costs of Reducing Incarceration Rates

With prisons costing $80 billion and limiting state budgets, reducing incarceration rates appears an attractive option. But prisons do benefit society. How can we weigh the costs against public safety benefits?

Researchers have crunched the numbers, finding:

  • A 2020 Brookings study estimates that cutting standard state prison sentences by 55% and redirecting the savings to policing and incarceration alternatives would save $18 billion annually while cutting crime rates by 7-16%.
  • A 2019 Brennan Center proposal to cut incarceration 44% by 2034 estimated $18.2 billion annual corrections savings which could pay for crime prevention and rehabilitation programs. Under their model, society would come out ahead.
  • A 2016 paper calculated that cutting time served by those incarcerated on drug offenses by 60% would save $8.7 billion annually, while also potentially reducing future crimes and increasing former prisoner wages.

These and other studies argue that right-sizing sentences for nonviolent offenders and spending the savings more effectively would benefit society economically and in public safety outcomes. However, there is no consensus, as skeptical researchers respond that fewer prisoners would mean more crime victims.

Incarceration rates have actually fallen about 15% from their peak in 2009 as reforms took hold. However, America still locks up over 600 prison inmates per 100,000 residents – dwarfing rates in comparable developed nations. With smart reforms, many argue high incarceration costs could be trimmed without sacrificing public safety.

Key Expenses Within Corrections Budgets

Now that we’ve examined the big picture costs of mass incarceration, let’s drill down into the major expenses within typical prison and jail budgets:

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Staff Salaries and Benefits

With around 1.5 million people working in corrections nationwide, personnel costs dominate prison and jail budgets:

  • Salaries – Guard salaries start around $35,000 but rise with seniority. Supervisory positions pay up to the low six-figures. Payroll accounts for about 50-75% of facility budgets.
  • Benefits – State corrections departments offer health and retirement benefits costing around $20,000 per worker. These account for 15-25% of budgets. Private prisons offer leaner benefits.
  • Overtime – Mandatory overtime when understaffed adds 10-15% on top of base salaries at many prisons. Long shifts also lead to sick days and injuries which raise overtime further.

While individual staff are not overpaid, the sheer quantity drives massive overall costs. Some argue reducing incarceration and automating tasks could cut personnel expenses. However, corrections unions have strongly pushed back on such proposals.

Prisoner Health Care

Corrections departments are constitutionally required to provide health care for physical and mental illnesses and injuries:

  • The average prisoner costs around $5,720 a year for health services due to chronic issues and an aging population. But the sickest inmates run up bills over $100,000 in some cases.
  • About 2 in 10 prisoners have mental health issues. Psychiatric medication and therapy amount to 20-30% of medical costs.
  • Dental care and prescription drugs are also major line items. Hepatitis C drugs alone cost states billions over the last decade.

Again, while per-person costs are only a few thousand dollars, the scale of incarcerated populations makes corrections a top payer for health services nationwide. Some urge shifting nonviolent drug offenders to community treatment to reduce these bills.

Infrastructure Costs

The physical footprint of prisons requires large capital and operating expenses:

  • New high-security penitentiaries can cost $250-500 million to build. Less restrictive facilities still run tens of millions.
  • Expanding existing prisons also adds up with capacity enhancement projects costing tens of millions.
  • Annual utility and maintenance costs to operate facilities range from around $2,000 per inmate in minimum security prisons to $50,000 in specialized medical centers.

Prison construction boomed in the 1990s and 2000s as incarceration rose. Some analysts argue this excessive infrastructure contributed to mass incarceration by making it cheaper to lock more people up.

Administrative Costs

Running massive corrections systems with over 2 million inmates requires large central office bureaucracy:

  • State corrections departments employ thousands in human resources, accounting, information technology, legal affairs, policy, training and other systemwide functions.
  • Corrections leaders earn from $100,000 in small states to almost $500,000 for large system heads. Underlings range down to $40-50,000.
  • Various services like food provision, Commissary, and transportation are contracted out at substantial values when not handled internally.

Critics contend that curbing incarceration would allow administrative expenses to be reined in. However, corrections administrators argue vital oversight would still be needed for smaller populations.

Costs Outside the Corrections Budget

While corrections spending totals over $80 billion, it does not encompass all incarceration costs:

  • Court and prosecution budgets also swell due to high caseloads from aggressive enforcement and sentencing policies, especially regarding drug offenses. More people in prison means more upfront criminal justice costs.
  • Local jails take in those sentenced to under a year and account for additional $25 billion in costs outside state prison budgets. Their budgets face similar pressures.
  • Indirect costs like lost wages for prisoners and social services for their families also drain public resources. Lower earnings after release are another lost economic benefit.

So the true costs of incarceration likely exceed the vast corrections budgets alone, as police, courts, jails, communities, and families share the high financial burden too. Reducing incarceration could create savings across the whole criminal justice system.

Impact on Vulnerable Communities

While mass incarceration costs taxpayers dearly, vulnerable lower income communities of color bear a disproportionate burden both financially and socially:

  • Although Black Americans account for only 13% of the U.S. population, they represent 33% of the prison population. Hispanics are also incarcerated at higher rates than their population share.
  • 13% of Black men and 5% of Black women will spend time in prison during their lives compared to 2.5% of Hispanic men and 0.4% of Hispanic women. Only 1.2% of white men and 0.2% of white females will be incarcerated.
  • A Black boy born in 2001 had a 1 in 3 chance of imprisonment versus just 1 in 17 odds for a white boy. Hispanic boys had a 1 in 6 risk.
  • Going to prison severely damages earnings. For young Black and Hispanic men the typical “wage penalty” is approximately 10-20%.
  • There are large disparities in sentencing as well. Black males got 19.5% longer average federal sentences for similar crimes as white males between 2012-2016.
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So while White Americans pay broad taxes that fund mass incarceration, minority communities bear the brunt of lost lives, reduced income, and dysfunctional families. To critics, prisons have become a regressive program concentrating harm on marginalized groups.

Table: Notable White Collar Crimes and Prison Sentences

Here is a table summarizing some recent major white collar fraud cases that led to multi-year federal prison sentences. The details illustrate how prosecutors take corporate crime seriously with long incarceration:

DefendantCompanyCrimePrison Sentence
Bernie MadoffBernard L. Madoff Investment SecuritiesMasterminded largest Ponzi scheme in history150 years
Martin ShkreliTuring PharmaceuticalsHiked drug price from $13 to $750 per pill7 years
Elizabeth HolmesTheranosFalsified blood testing capabilities11 years
Rajat GuptaMcKinsey & CompanyInsider trading conspiracy2 years
Bernie EbbersWorldComMassive accounting fraud25 years
Jeffrey SkillingEnronAccounting fraud and conspiracy14 years

Financial and corporate crimes carry stiff penalties, especially when large losses are caused. However, violent and drug offenders often serve comparable or longer sentences. Some argue white-collar criminals are treated too leniently given limited prisons space and budgets. But prosecutors respond that significant deterrent prison terms are handed out in major fraud, insider trading, and embezzlement cases.

Quotes on Prison Sentences from Convicted White Collar Criminals

White collar criminals rarely achieve full redemption in the public eye. But some of their quotes on doing time provide insight into how even wealthy individuals struggle in the stark prison environment:

“I deserved to go to prison. That’s where people who commit frauds belong.” – Bernard Madoff

“The food here is absolutely terrible. It’s worse than airline food.” – Rajat Gupta

“Those were hellish moments, and in those hellish moments, I mustered up the courage to kill myself.” – Martin Shkreli contemplating suicide in prison.

“I violated the integrity of the markets. I distorted the system. I ripped people off who trusted me. The blood and tears of innocent victims are on my hands.” – Jeff Skilling

“Prison is disrespectful. It removes your control. It’s dehumanizing. No one would ever want to go to prison.” – Elizabeth Holmes

While few Americans shed tears for rich executives caught cheating investors and customers, hearing their perspectives reminds that prison can challenge anyone. Removing freedom and autonomy affects all humans deeply. Perhaps their punishments serve justice yet also merit compassion.

Frequently Asked Questions on Prison System Costs

Here are concise answers to some common questions regarding the scale and scope of mass incarceration expenses:

How much money is spent each year on the prison system in the United States?

Total spending is over $80 billion annually – around $30,000 per state and federal inmate. State prisons cost taxpayers $50 billion and federal prisons $7 billion more. Jail costs add roughly $25 billion.

What are the main drivers of high incarceration costs?

Staff salaries, inmate healthcare, infrastructure, and administration are the largest costs. Personnel alone accounts for 50-75% of most corrections budgets due to large workforces guarding millions of prisoners.

How have prison costs changed over the past 40 years?

Incarceration quadrupled since 1980 as tough-on-crime policies led to unprecedented imprisonment, especially of nonviolent drug offenders. As a result, corrections costs grew up to sevenfold accounting for inflation.

Could reducing incarceration save money?

Research indicates right-sizing sentences for nonviolent crimes and redirecting some corrections dollars to crime prevention and rehabilitation could potentially save $10 to 20 billion a year while also benefiting public safety.

Which states spend the most and least per prisoner?

Northeastern states like New York and Connecticut have the highest per-inmate costs, over $60,000 in some cases. Rural Southern states like Mississippi and Louisiana spend about $15,000-$17,000 per person, among the lowest nationwide.


The United States prison system costs taxpayers dearly, with annual spending exceeding $80 billion on corrections alone. These expenses have ballooned over the past 40 years as incarceration rates surged. Prisons now take substantial funding from state budgets that could go to other priorities.

While prisoners should serve fair sentences, we must consider true rehabilitation. Many argue excessive imprisonment for nonviolent crimes like drugs has high economic and social costs. Research indicates we could maintain safety while spending less if penalties for minor offenses were eased.

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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