New Report: The Fiscal Limits of Decarceration

A decade of decarceration efforts has not translated into meaningful taxpayer savings

NEW YORK, NY — The U.S. prison population has declined in recent years. Both progressive reformers and Republican budget hawks have supported this trend, often arguing that it saves taxpayers money. However, in a new Manhattan Institute report, Joshua Crawford, director of criminal justice initiatives at Georgia Center for Opportunity, examines more than a decade of decarceration efforts and concludes that shrinking prison populations does not translate into meaningful taxpayer savings.

Despite widespread claims that criminal justice reforms would lighten state budgets, Crawford finds corrections spending rose even in states that dramatically reduced their incarcerated populations. Between 2010 and 2023, state prison populations dropped by 24% nationwide. Yet over roughly the same period, corrections spending increased 28% in real dollars.

“Policymakers across the spectrum have sold criminal justice reform as a way to save money. But the data tell a different story,” Crawford says. “Because prison budgets are driven by fixed costs like payroll, maintenance, and facilities, modest reductions in the number of inmates don’t free up meaningful savings. Unless states close prisons or dramatically cut staffing, costs remain largely unchanged.”

Key Findings:

• Savings based on per-prisoner cost estimates are misleading. Dividing total costs by the number of inmates ignores fixed, short-run, and long-term costs of incarceration. After factoring for these variables, reducing 1,000 inmates in Illinois, for example, would yield savings of about $12.5 million—not the $70 million suggested by “per prisoner” cost calculations.
• Corrections remains a small share of state budgets. Even with growth, corrections consistently makes up less than 5% of state spending, far behind education (25%–35%), welfare (20%–25%), highways (5%–10%), and hospitals and health care (5%–10%).
• Further reductions to the prison population would require difficult trade-offs. With 63% of state prisoners incarcerated for violent crimes, deeper cuts to prison populations would necessitate releasing serious or repeat offenders.

Click here to read the full report.