IMPROVING BUDGET ANALYSIS OF STATE CRIMINAL JUSTICE REFORMS:
A STRATEGY FOR BETTER OUTCOMES AND SAVING MONEY
ACLU Executive Summary
Across the nation, state governments are mired in economic crisis. Over 40 states had billions in
budget shortfalls last year. With this grave reality in mind, this report, Improving Budget Analysis of State
Criminal Justice Reforms, details how a change to the way states perform cost evaluations of legislation
could help alleviate the strain. It explains how enacting certain criminal justice reforms will
significantly reduce states’ runaway spending on prisons.
Unfortunately, many states have taken a short-term attitude toward solving their economic
problems: in order to balance budgets in the current year, they cut spending on essential public
programs like schools, public assistance, and infrastructure. At the same time, almost all states have
increased their spending on prisons. Currently, almost $70 billion of our annual tax dollars go to our
penal system, often toward incarcerating people who pose little or no safety risks. Over the last 25
years, state corrections spending grew by 674 percent, outpacing the growth of other spending to
become the fourth-largest category of state spending. Since the late 1980s, 14 states have doubled
their spending on corrections and thirty states have increased their spending by half.
This prison spending explosion is a direct result of our ineffective and inefficient “war on drugs”
and “tough on crime” policies of the 1980s and 1990s. We now sweep far more Americans – mostly
black and brown – into the corrections system and send them to prison for far longer periods than
at any previous time in history. Our prisons are filled to the brim with petty offenders, the mentally
ill, the elderly, children charged as adults, those with drug addiction in need of treatment, and poor
people unable to pay bail. As a result, the United States is now the largest incarcerator in the world.
The racial disparities and the economic inefficiencies of this system of mass incarceration are
enormous.
Fortunately, bipartisan lawmakers in some states have realized that the prevailing rate of corrections
spending growth is unsustainable. These states - like Texas, Kansas, and Ohio - have enacted
reforms that reduce incarceration rates and costs while continuing to protect public safety and
promote fairness. These reforms include early intervention with at-risk populations, mental health
and substance abuse treatment programs, and reentry services. While they may require modest
upfront spending, these programs will achieve huge savings to the corrections budget, as well as
long-term societal benefits.
Some states, on the other hand, are not yet realizing the wisdom of these reforms and have rejected
such policies. As a result, these states continue to spend more and more on prisons even when doing
so is unnecessary. Often this result is unintended because legislators do not have accurate
information to realize these reforms would actually save money.
ACLU Executive Summary
For example, earlier this year, bipartisan legislators in Maryland sought to pass a law implementing
non-prison sanctions for individuals who commit technical parole violations, such as missing a
meeting with their parole officer or failing to complete community service. More than one-third of
the people behind bars in this country are there for similar technical violations, not for new crimes.
The Maryland bill would have reduced prison spending without affecting public safety. Some of this
savings would have occurred within the first three years of the reform, since most violations occur
during this timeframe. But a poorly performed state-sanctioned cost evaluation considered only the
up-front costs of the proposed program and ignored the future savings, concluding incorrectly that
the reform would cost too much. As a result, the bill was scaled back. Now, Maryland will continue
to automatically send most individuals who violate parole conditions back to prison even if it is for
something as small as missing a parole meeting.
Maryland is just one example of this type of legislative pathology. This problem can be somewhat
alleviated if states have in place adequate procedures to accurately research and draft the “fiscal
notes” legislatures require to accompany such proposals. These fiscal notes contain official state
estimates of the costs and savings to state treasuries of proposed laws under consideration by the
legislature.
This report finds that the vast majority of states do not accurately perform these fiscal notes in a way
that is useful to legislators. It recommends a series of best practices for states to provide accurate
fiscal information to state legislators. By following these best practices, states can calculate both
short- and long-term costs and cost savings for criminal justice bills and easily provide that
information to legislators, who can then know the true fiscal implications of reform proposals
before voting on them. States can use these best practices to reform their fiscal note process.
Advocates and the public can also use these best practices to better understand the accuracy of fiscal
notes currently produced by states and the reach of their usefulness.
Improved fiscal notes will illuminate the short- and long-term benefits of ending our dependence on
incarceration, bolster reforms that will reduce prison spending and save states millions that they can
spend on other vital services. Improving a state’s fiscal note process is not just relevant to criminal
justice reform – accurate fiscal notes will help states assess future fiscal impacts of all legislation.
The report, coauthored by the American Civil Liberties Union and the Center on Budget and Policy
Priorities, is available at https://www.aclu.org/criminal-law-reform/improving-budget-analysisstate-criminal-justice-reforms-strategy-better.
Report Findings
Based on an analysis of all state fiscal notes for significant adult sentencing and corrections bills
enacted in the last three years – a total of over 600 bills from 49 states – this report finds that:
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States did not write a fiscal note for about 40 percent of the bills. Without an official
certification that a bill would save money, legislators may have less incentive to vote for it.
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The majority of states failed to examine the fiscal impact beyond a year or two into the
future. Fifteen of the 29 states that wrote fiscal notes finding a significant fiscal impact failed to
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ACLU Executive Summary
estimate the impact beyond two years. Without an official recognition of the future savings,
legislators are less likely to be aware of the long-term fiscal benefits of these reforms, reducing
the chances of enactment.
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About 15 percent of notes did not estimate a budgetary impact, or indicated only that
the impact would be a positive or negative one. 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 impact of the measure on the state budget.
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Few states described the method used to determine fiscal impacts. Only 13 of the 29
states that wrote any fiscal notes finding a significant fiscal impact consistently described the
method they used to determine the cost or savings of a bill. Without an understanding of the
methodology, lawmakers and the public are less able to evaluate the accuracy of fiscal notes,
reducing their credibility and usefulness.
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Some states do little to protect the credibility of their fiscal notes. Legislators must believe
that fiscal note findings are credible before they can rely on them in deciding how to vote.
Fiscal Note Best Practices
By following these best practices, states can ensure that their fiscal notes are maximally useful to
lawmakers and the public. All states stand to gain from improving their fiscal notes. All criminal
justice fiscal notes should be: consistent, properly researched, detailed, and accessible.
Consistent
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Written for all criminal justice bills that receive a hearing in a committee of the legislature, or
at least all bills likely to pass out of committee.
Updated when an adopted amendment may have fiscal impacts.
Produced in a consistent format, following an established set of guidelines.
Produced by a source that is trusted, non-partisan, and adequately resourced.
Properly Researched
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Include an estimate of the savings, costs, or revenue gains, and avoid claiming an
indeterminate impact.
In rare cases when an impact estimate is impossible, include a detailed explanation.
Project the fiscal impact at least five years into the future.
Analyze the impact against maintaining current policy.
Include a clear description of the methodology and assumptions.
Cite the information sources used.
Detailed
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Break down the impact of each major provision of the bill, and the impact on each affected
government agency or revenue source.
Break down impacts into one-time and recurring impacts.
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ACLU Executive Summary
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Include impacts on local governments.
Include impacts on prison or jail populations.
Accessible
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Easily available on the state legislature’s website.
Include basic information about the bill, including bill number and version, sponsor(s), and
summary.
Include contact information for the lead analyst.
To achieve these best practices, many states will need to invest in their fiscal note process, mainly by
hiring more professional research staff to oversee and implement improvements. Because accurate
fiscal notes can help states identify significant long-term cost savings and avoid unanticipated costs,
investing in staff to improve these notes can be a highly cost effective investment.
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