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Criminal Justice Reforms Can Save States Money — But Do States Know How Much?

Corrections spending is absorbing a growing share of states’ budgets (see map), leaving less for education, health care, and other priorities.  Some states have adopted criminal justice reforms that reduce costs while protecting public safety — offering effective addiction treatment to more people convicted of drug-related crimes instead of incarcerating them, for example, or imposing sanctions other than prison time for people who miss meetings with their parole officer.

More states might implement these reforms if lawmakers had a rigorous assessment of the likely impact on the state budget, such as expected cost savings.  Unfortunately, many states do a poor job of producing this vital assessment (called a “fiscal note”), as a new report from CBPP and the ACLU explains.

We examined more than 600 significant bills on adult sentencing and corrections policy that 49 states have enacted in the past three years and found that:

  • States did not write fiscal notes for about 40 percent of them. Without an official certification that a bill would save money, lawmakers may have less incentive to vote for it.
  • Most states failed to examine the bill’s fiscal impacts beyond a year or two. Some effective reforms, including certain drug and mental health treatment programs, require modest startup costs but reduce future prison spending significantly.  Lawmakers need to be aware of these long-term benefits.
  • About 15 percent of fiscal notes did not estimate a budgetary impact or indicated only that the impact was positive or negative. While some of these notes contained some useful information, they failed to accomplish the primary goal of a fiscal note:  to provide the best possible estimate of the bill’s impact on the state budget.
  • Few states’ fiscal notes explain their methodology. Without an understanding of the method used to determine a bill’s cost or savings, lawmakers and the public can’t evaluate the accuracy of fiscal notes, reducing their credibility and usefulness.
  • Some states do little to ensure the credibility of their fiscal notes. In some states, executive branch agencies produce fiscal notes with no review by nonpartisan analysts. Lawmakers must believe that fiscal notes are credible before they can rely on them when deciding how to vote.

A few states, including Texas and Washington, produce fiscal notes that meet high standards.  Our analysis describes the best practices in this area.  To achieve them, many states may need to invest more resources in their fiscal note process, for example by hiring more professional research staff and upgrading the data available to them.  But investing in good fiscal notes is far less costly than enacting or maintaining criminal justice policies that require more prison spending.