Would Judges Sentence Fewer People to Prison if Local Governments Had to Pay for Their Prison Stays?

The U.S. criminal justice system is unique in many ways—its scale being one of the most notable factors. The incarceration rate is four times the world average.

Why, exactly, the number of people behind bars has grown so large is something many researchers have studied. One new study published in the November issue of the Journal of Public Economics suggests that the cost structure may be partly to blame. 

Aurélie Ouss, a professor of criminology at the University of Pennsylvania, explains in the study that in most jurisdictions, a convicted defendant’s stay in prison is paid for by the state, but sentencing decisions are made by local prosecutors and judges, following arrests made by police. Local governments, therefore, end up bearing only a fraction of the costs of the sentences handed out, leading to what some researchers refer to as a “correctional free lunch”

Ouss said that she became interested in studying the economic models of crime and law enforcement first as a theoretical project. “The prevailing view is that public officials are trying to maximize safety subject to budget constraints,” she said. “But that doesn’t take into account that a main feature of the U.S. criminal justice system is that there are a lot of people involved, not one centralized decision maker analyzing the costs and benefits of their actions.”

Ouss realized that in the controlled environment of a lab experiment, people were more punitive when they were only responsible for a fraction of the costs of their decisions. “I wondered if this would also bear out in the real world,” she said. 

She found a natural policy experiment in the 1996 California Juvenile Justice Realignment. Before 1996, incarceration of teenagers who were arrested and adjudicated in juvenile court was largely paid for by the state correctional system. The realignment strategy, however, shifted a larger share of the costs onto counties, essentially making local courts and public safety systems more responsible for the financial consequences of time spent in correctional facilities. 

In analyzing data from the National Corrections Reporting Program, Ouss found that the number of juveniles tried in counties and sent to state correctional facilities dropped by 40% to 60%. In two counties that were most intensely studied, Santa Clara and Orange, this change was largely driven by an increase in cases that were dismissed by prosecutors and judges. The youths on trial weren’t diverted into other punishments that the local government might have to pay for like county diversion programs. 

Overall, admissions to state juvenile correctional facilities dropped by 68% after the Juvenile Justice Realignment relative to the admissions of 19-year-olds to adult prisons. Ouss used that group as a comparison to see if prison admissions were dropping across the board.

“More youth were kept out of incarceration altogether as a result of the change in costs,” Ouss wrote. “This suggests that prison subsidizing led to over-reliance on confinement.” In other words, “financing structures matter for sentencing decisions.”

Other states and local governments have figured out the same thing in recent years. In 2010, the Missouri Sentencing Advisory Commission made the costs of different punishments available to judges in an effort to get them to think more critically about sentencing decisions at a time when the state was facing severe budget woes. The same idea has been considered in Vermont. In 2018, Ohio started charging counties a penalty of $72 per day for every person they sent to prison on low-level offenses that could be dealt with by probation.

Also in 2018, Philadelphia District Attorney Larry Krasner started requiring prosecutors in his office to tell judges how much prison sentences cost, noting that a year of incarceration, with a price tag of around $42,000, would pay the salary of a teacher, social worker, or firefighter. “You may use these comparisons on the record,” he said. The district attorneys in San Francisco and Loudoun County, Virginia, implemented similar policies this year.

“Recent efforts to reduce the prison population have focused on approaches like diversion, large-scale releases, changes in the use of mandatory minima, or not charging some offenses,” Ouss wrote in the paper. “My findings highlight the importance of incentive structures … If these results in juvenile justice replicate in the adult context, cost internalization could offer a path to reduce incarceration without increasing crime.”

Whether the findings of the new study can be easily applied to the adult system isn’t clear. The 1990s marked the beginning of an era where activists and government leaders pushed to keep teenagers out of juvenile lockups, which were often inappropriate for them and dangerous. This trend may have influenced county decision makers to drop more cases. Judges are also generally more lenient with kids.

But one thing is clear, Ouss said, when local leaders have to think more critically about how to pay for the sentences they hand out, they act differently and often less punitively. 

“We know incarceration is costing us billions. What we don’t really think about is who’s paying for what,” she said. “Local finances are really important to look at when you want to see which policies are developed and which aren't. This could be a very powerful lever for criminal justice reform.”