Taxpayer costs

Taxpayer costs, also known as government costs, are a key consideration in the policymaking process. Decision makers want to know how much it will cost the government to implement criminal justice policies and programs, so it is critical that you estimate these costs accurately in a cost-benefit analysis (CBA). This document outlines the taxpayer costs of the criminal justice system and provides guidance on how to measure these costs.

Taxpayer costs of the criminal justice system

Taxpayers fund the operations of law enforcement, courts, and corrections, as well as a variety of criminal justice-related programs. Criminal justice involvement generally begins with arrest and, for some people, continues into the courts. Some individuals are detained in jail during court involvement. If an individual is determined to be guilty, he or she may receive a sentence to jail, prison, or probation. Criminal justice system costs involve:

  • Law enforcement, which includes police and sheriffs;
  • Courts, which includes prosecution, defense, judges, and administration;
  • Corrections, which includes jails, prisons, probation, and parole;
  • Programs, such as:
    • Pretrial services,
    • Alternatives-to-incarceration,
    • Inmate education and training, and
    • Reentry services.

The Criminal Justice System Flowchart from the Bureau of Justice Statistics (BJS) provides an overview of case flow through the criminal justice system and serves as a helpful reference to the agencies and functions that should be examined when estimating criminal justice-related taxpayer costs.

Measuring costs

In some instances, calculating the taxpayer costs of a criminal justice initiative is simple. The taxpayer costs of a job-training program for inmates, for instance, can be determined by reviewing the program’s budget to determine the cost of operations.

In other instances, measuring the taxpayer costs of a criminal justice policy or program is more complex, requiring a thorough assessment of which agencies and functions would be affected and to what degree. Consider a policy that is designed to increase the number of arrests for a particular crime. You would estimate not only the increased cost to the police, but also, depending on the type of crime, the additional costs related to the increased use of court and corrections resources for trying and incarcerating (or supervising) more individuals.

Taxpayer costs should be calculated using the marginal cost of each activity. Marginal costs describe how the total cost of an operation changes as the unit of activity changes and can be obtained using one of several methods, such as reviewing recent additions or subtractions to the government budget. For example, if $4 million was recently added for probation supervision of 2,000 individuals, the daily marginal cost of probation is $5.48 ($4 million ÷ 2,000 people on probation ÷ 365 days). (See the Marginal Costs tool and webinar for more information.)

Criminal justice system costs are often available in state and local budgets and are sometimes available on the website of the operating agency. When state or local data is not available, refer to the BJS Justice Expenditure and Employment Extracts series. This data set contains total state and local spending for law enforcement, courts, and corrections. Additionally, you can contact staff at criminal justice agencies or budget offices to receive this information.

Keep in mind

The outcomes of criminal justice policies and programs sometimes affect spending in other areas of government. For example, a successful employment program for ex-offenders might yield benefits to the criminal justice system by reducing future crime rates. It may also add to government revenues by increasing the amount of income taxes paid by gainfully employed program participants. A careful CBA should take into account these possible effects on taxpayer costs beyond the criminal justice system.

Cost-benefit studies usually report the total taxpayer cost. However, it may sometimes be helpful to report costs by the level of government—that is, federal, state, or local. In some instances, it might also be appropriate to disaggregate taxpayer costs by unit of government, such as a corrections or social services department.

For more information on Taxpayer Costs, please see the Cost-Benefit Analysis and Justice Policy Toolkit.