Lost population-based revenue is a hidden cost of incarcerating prisoners out-of-state

by Peter Wagner, July 6, 2003  


It is ironic that Connecticut would value the distribution of federal aid in this way and then send residents out of the state. That issue aside, the Secretary of State’s valuation of federal aid that underlies this article appears to overstate the impact by blurring the distinction between federal aid per capita and federal spending per capita. Federal aid distributed to the states on a per-capita basis is more in the range of $1,000 a person. Still worth discussing, but smaller.

Readers should note that the $1,000 figure is not necessarily the figure to use when discussing the intra-state impact. The distribution within a state tends to match the state’s needs and politics more than the population into Census tracts. For example, the Census is a factor in determining how much federal highway funds a state gets. The state is likely to spend the money where road conditions, traffic and politics warrant.

Update: Apr 24, 2004

Although most state prisoners are housed within their state, a growing number of states are paying to incarcerate their prisoners in other states. (Federal prisoners may be incarcerated in any state, but the originating state has no control over where the sentenced prisoner is confined.) Most frequently, a state justifies housing prisoners out of state on the grounds that it costs less.

For example, Connecticut claims that incarcerating a prisoner costs $95 a day in Connecticut, and considerable savings can be realized by paying Virginia’s rate of $64 a day for each prisoner sent to that state. There are two typical arguments against out-of-state transfers.

First, increasing the distance between a prisoner and his or her family makes visits more difficult, increasing recidivism. Second, it’s better for a state’s economy to spend its money in the state. While $95 may be a greater expense than $64, at least the funds remain in the state.

The Connecticut Secretary of State estimates that the state receives $5,932 in various types of annual federal aid for each resident in the state. Per resident, that’s a loss of $16.25 a day, or 53% of the “savings” from sending prisoners to the “cheaper” Virginia prisons. Prisons are a profitable business in Virginia, first on a fee-for-service basis, and again from the Census’ practice of counting prisoners were they are incarcerated rather than where they are from.

Source: Shipping Prisoners Could Cut State’s Census Count, by Agnes Diggs, The Advocate (Stamford, CT) April 10, 2000.)

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  • September 21, 2016:
    Executive Director Peter Wagner will be speaking at Claremont McKenna College in California. Details TBA.

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