This article examines the economic implications of the problem of overcrowding when the construction of new prisons is selected as the solution. True costs, which are substantially more than commonly understood, are derived. The costs of specific sentences are also examined. Prison is compared with other punishment alternatives. Myths about prisons are discussed and the real policy choices faced by public decision makers are presented.
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References
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1. To staff a post 24 hours a day, 365.25 days a year, a total of 8766 hours must be covered. The average number of days worked per year per person come to 210, or 1680 available hours: 260 available days less vacation and administrative leave of 20 days, sick leave of 20 days, and holiday leave of 10 days. Dividing the total hours to be covered—8766—by the hours to be worked—1680—yields 5.2 positions. This planning figure is used by the Massachusetts Department of Corrections as well as by other states.
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2. For example, if a project's costs are estimated at $1 million and benefits at $1.5 million, the project should be undertaken. However, if project outlays were understated because some costs were not known, there may be a shortfall in benefits, that is, the project may not be a wise investment. Similarly, one will consume more of the cheaper good than its more expensive counterpart. When prices do not reflect all costs of production, then inappropriate choices may be made.
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3. It is important to examine carefully plans that purport to offer a substantially reduced bed cost. Often the reductions are achieved by eliminating program space; omitting administrative offices; or increasing the ratio of usage of common facilities, for example, one shower for every 20 inmates instead of for every 10. Such an approach is legitimate if the reason is made known. What funders need to be aware of, however, is that the builder or architect is not providing the same prison for a lesser price, but a lesser prison for a lesser price.
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4. Security classifications as used here are architectural. States vary in their definitions of security level, but for planning purposes, the following assumptions are accepted for medium-security prisons: standard superstructures; perimeter fencing, as opposed to walls; reinforced—not solid—concrete walls; penetration-resistant and safety glass; and so forth. Constructing a maximum-security facility could add as much as 25 percent to the costs shown in Table 1, while minimum-security could delete 25 percent or more, depending on the use of dormitory space. Research indicates that there is more than enough maximum-security space available in this country's prisons; there is also evidence to suggest that overclassification is prevalent and that with a proper system, the real need would be—if prison is used—for medium- and minimum-security beds. Cf. James Austin, Presentation at a workshop, “Seminars for Decision Makers in Corrections,” sponsored by Rutgers University and the National Council on Crime and Delinquency, Cherry Hill, NJ, 1982. But for some reason, when states contemplate prison construction, maximum is the most frequently chosen option.
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5. The average of $85,000 from Table 1 would obtain for cities such as New York, Cleveland, Los Angeles, and Portland, OR. Lower costs would be found in Columbia, SC; Jackson, MI; Portland, ME: and Tallahassee, FL. Higher costs obtain in San Diego; San Francisco; Long Beach, CA; and Detroit.
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6. A recent New York study suggested the quadrupled figure—an interest rate of 13 percent. See Douglas McDonald, The Price of Punishment (Boulder, CO: Westview Press, 1980).
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7. For example, fringe benefits in New York are funded from a separate state account and this omission understates corrections costs by nearly 30 percent. “In short, the accounts in most states do not readily reveal how much money taxpayers spend on criminal justice and corrections.” Douglas McDonald, The Price of Punishment. In addition, a study revealed that a county house of correction frequently borrowed staff from the adjacent jail but these costs were never charged to the prison, thus understating its true costs. Retirement and health insurance were funded at the county level and these charges never appeared. The sheriff was the administrator but had his own budget. Total prison costs were 28 percent higher than the accounts indicated. Gail S. Funke and Billy L. Wayson, Comparative Costs of State and Local Facilities (Washington, DC: American Bar Association, 1975).
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8. There is evidence to suggest that marginal costs—the cost of producing one more unit, in this case an inmate—decline over very large ranges of inmate population. See Michael K. Black, Cost, Scale Economics, and Other Economic Concepts (Washington, DC: American Bar Association, 1976). In any case, the protocol for determining the marginal, or incremental, cost is quite straight-forward. For food and personal effects, the costs increase by the average cost for those services. To estimate the impact on staff-related services, one simply establishes ratios of service provision—for example, 1 guard per 10 inmates, 1 teacher per 30 students, 10 infirmary beds per 100 population, and so forth. Then additional costs necessary to maintain quality can be calculated for increments of new inmates. These costs will be less per inmate than average costs because of the presence of fixed outlays—exterior building and grounds maintenance, perimeter security, administrative staff, certain utilities, and the like. See Gregory P. Falkin, Billy L. Wayson, and Gail S. Funke, Examining Connecticut's Sentencing Laws (Alexandria, VA: Institute for Economic and Policy Studies, 1980), report to the Connecticut Department of Corrections associated with different options to expand prison capacity. A little foresight in this area can convert myopia into professional planning.
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9. It is important to note that an average inmate cost is a residual, or a construct; a prison, or a hospital, or a household costs a certain amount to operate. Dividing these total costs by the number of residents yields an average cost, useful in analyses of the type in this article. Following, it would be a serious error to estimate the savings of removing one inmate from prison as the figure represented by the average cost. This is a marginal cost and its calculation is quite different. In fact, the savings—which would show up in expenditure reports—incurred by removing one or several inmates from a prison are virtually unnoticeable. For substantial savings to be made a whole prison or major component thereof must be taken out of service or not built.
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and Gail S. Funke and Billy L. Wayson, The Costs of Correctional Change (Washington, DC: National Institute of Law Enforcement and Criminal Justice, 1978).
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11. No national studies have been done but some assumptions about the proportion of inmates—for example, 25 percent—who might have dependents receiving public assistance at a rate of say, $5000 per year create a price tag of $0.5 billion quite easily.
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12. This issue is of so much concern that two justice agencies have ongoing research projects to discern such costs. The results from the National Institute of Justice and the National Institute of Corrections should be available in 1985 or 1986.
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13. It is tempting to inflate the operating-cost portion of this figure, but analysis dictates that all costs be expressed in today's dollars; present value is always used to estimate the costs and benefits of a project even if some of these occur in the future. In addition, all prices rise and shares tend to remain relatively constant.
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14. The irony of such legislation is that new prisons are constructed—if at all—much more slowly than new laws are enforced. Thus prisons become overcrowded and subject to lawsuits, and prisoners are often released through the correctional back door either formally through emergency legislation or informally through the discretion of corrections officials. With a limit on the number of prisons, there will tend to be a constant number of offenders on the street—hardly the intent of the get-tough legislation.
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and M. Kay Harris and Becky Siebens, Reducing Prison Overcrowding: An Overview of Options (Washington, DC: National Council on Crime and Delinquency, 1982).
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16. Again, this average cost is a residual used to make a point about public outlays. Indeed, there is a cumulative effect, which is a much more helpful way of viewing the figures. When decisions are made that equal the cost impact of one prison, then that prison must be built or alternatives found. The savings of, for example, $23,000 by not sending one person to prison are not real unless an entire prison is avoided.
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17. William J. McGuire, “An Economic Model of Criminal Correctional Institutions: Empirical Cost Analysis and Cost-Benefit Measures” (Ph.D. diss., University of North Carolina, Chapel Hill, NC, 1978). As crimes formerly punishable by alternatives now become punishable by imprisonment, one might expect this difference to increase.
18.
18. Howard S. Bloom and Neil M. Singer, “Determining the Cost-Effectiveness of Correctional Programs,”Evaluation Quarterly, 3(4) (Nov. 1979).
