PRISON COSTS ARE RUNNING OUT OF CONTROL

Start with cutting drug sentences

Colorado taxpayers spend around $100 million a year to incarcerate drug
offenders in state prisons. So it's worth asking why any kind of sentencing
reform, which could save millions of dollars in prison spending, has been
off the table in the budget debates of the last few years.

A rational assessment of spending priorities would lead to reducing total
drug incarcerations so that long sentences and valuable prison beds are
reserved for people who engage in violence or who recruit juveniles into the
drug trade. This November, voters will decide whether to bust Colorado's tax
and spending limits; voters need to understand that one of the key causes of
the current fiscal situation is that prison spending broke the spending
limits long ago.

In 1991, the legislature passed the Bird-Arveschoug general fund
appropriations limit, which holds state budget growth to an annual 6
percent.

Spending limit was busted

If corrections spending had been held to the 6 percent growth limit, then
last year's Department of Corrections operating budget would have been
around $299 million. Instead, it was more than $469 million. Stated another
way, most of next year's projected state budget deficit would disappear if
prison spending had not busted the spending limit.

In the last decade, the legislature also has appropriated half a billion
dollars for prison expansion and new prison construction, yet the prison
lobby has demanded even more.

In 2003, unable to afford more prison beds from the general fund,
legislators bypassed voters and authorized the department to finance a new
948-bed Colorado State Penitentiary II through the issuance of more than
$100 million of certificates of participation. Normally, when state
government wants to borrow money for a long-term construction project, the
government is supposed to ask voters for permission to issue bonds.

But the legislature was apparently afraid to ask the voters for permission
to build the prison. So the legislature is paying for the new prison through
the legal fiction of the certificates, by which a private business builds
the prison, and then "leases" the prison to the state on an annual basis.

I believe certificates of participation evade Section 4(b) of Colorado's
Taxpayer Bill of Rights, which requires voter approval for increases in
multiyear debt "or other financial obligation whatsoever."

The new penitentiary project is rightly tied up in a lawsuit over its
constitutionality. But even if the facility is built, Colorado could more
than fill the penitentiary with just one year's worth of drug offenders.

In 2003, of the approximately 5,700 commitments to Colorado prisons, more
than 1,200 - or 22 percent - were for drug offenses.

In the last 20 years, the percentage of inmates whose most serious offense
is a drug offense has quadrupled; today, drug offenders constitute 20
percent of the total prison population.

In 1984, Colorado's adult inmate population was less than 4,000. In 2004,
that number was more than 19,800.

In other words, there is roughly the same number of drug offenders
incarcerated today as the entire prison population of 20 years ago. In 2004,
there were more than 10,700 adult criminal drug case filings in Colorado
courts; drug cases now constitute a quarter of all criminal case filings.

Given the massive increase in drug incarceration, you might think a
drug-free Colorado is close at hand. You would be wrong.

According to the U.S. Drug Enforcement Administration's State Fact Sheet for
Colorado, heroin is not only "available in the major metropolitan areas of
Colorado," but "various law enforcement and treatment indicators suggest
that heroin use and availability may be on the rise in Colorado." As for
cocaine, "Enforcement activities reflect a steady supply of cocaine coming
into and through Colorado." And marijuana, according to DEA, "is available
throughout Colorado."

According to the new book "An Analytical Assessment of U.S. Drug Policy,"
published by the conservative American Enterprise Institute, from 1981-2000
a "more than tenfold increase in drug enforcement pressure was accompanied
by a two-thirds decline in the retail price of cocaine."

Two main goals have failed

Two of the main goals driving the mass incarceration of drug offenders - the
supply-side strategy of disrupting illicit drug availability, and the
demand-side strategy of raising retail prices out of most buyers' reach -
have failed.

The problem is not that the Colorado legislature didn't try hard enough;
indeed, the legislature and the Department of Corrections undertook one of
the most extreme spending sprees in state history. The core problem is the
irrationality of treating drug offenses like violent crime. For instance,
incarcerate one criminal like the "Raspy Robber" suspected of a couple of
dozen bank robberies, and not only are a string of robberies solved, but
untold numbers of future robberies are prevented.

But the imprisonment of one drug dealer (or even an entire network) only
temporarily disrupts the flow of illegal drugs. As soon as one supplier is
gone, another quickly moves in to take his place. Basic economic laws of
supply and demand say that as long as there is a demand for a product, a
market will make that product available.

Using incarceration to try and halt the availability of drugs can only be
achieved by imprisoning every drug user and addict (who constitute the
majority of the small-time dealers) and everyone willing to break the law in
return for large financial rewards (dealers in the upper levels of the drug
world).

So what to do?

In 2003, the legislature took a tentative reform step with Senate Bill 318,
which lowered the penalty for simple use and possession of 1 gram or less of
most illegal drugs to a class 6 felony. For comparison, a U.S. penny weighs
2.5 grams. The changes are supposed to lead to prison cost savings that must
be transferred to a drug offender treatment fund by 2007.

A February 2005 status report by the Interagency Advisory Committee on Adult
and Juvenile Correctional Treatment shows that SB 318 should easily achieve
the $2.2 million in cost savings required by the law.

According to the report, in the 18eighteen months before the sentencing
changes went into effect, 3 percent of drug use and possession convictions
were in the class 6 felony range. In the 18 months following, class 6 drug
convictions increased 30 percent, while the more serious class 4 and class 5
felony drug convictions dropped a combined 29 percent. In other words,
small-time offenses are a significant number of felony drug convictions in
Colorado.

The recent Independence Institute budget study, Priority Colorado, estimates
that the state government could save between $28 million and $42 million
with additional sentencing reforms. Reforms include making use and
possession of less than 1 gram into a misdemeanor rather than a felony;
creating a drug felony sentencing scheme separate from the current
sentencing scheme used for violent crimes; and expanding the use of parole
and community supervision for non-violent drug offenders.

Last February, the Joint Budget Committee responded to Priority Colorado and
agreed that "criminal sentencing reform could generate significant general
fund savings." Some of the savings could be used to help balance the budget,
and some could be used for drug treatment as an alternative to
incarceration.

A RAND Corp. national study, "Controlling Cocaine: Supply Versus Demand
Programs," concludes each dollar spent on treatment reduces the cost of
crime and lost productivity by $7.46. By contrast, domestic enforcement
(arrest, seizure and incarceration) returns just 52 cents.

The authors of the American Enterprise Institute book note that even if the
RAND study is off by a wide margin, the conclusion is unchanged: "Treatment
of heavy users is a far more cost-effective policy at the margin than any
kind of enforcement."

According to the institute authors, only about 3.5 million Americans have
substantial problems with cocaine or heroin, and these people not only
account for most cocaine and heroin consumption, they also "are probably
responsible for an even larger share of the crime associated with drugs."

Focusing resources and the coercive power of the state on hard-core drug
addicts who also commit other crimes makes more sense than simply punishing
low-level drug users since, as the AEI authors note, "most who start using
illicit drugs desist of their own volition, without treatment or
incarceration, within five years of initiation."

Colorado's experiment in mass incarceration of drug offenders has failed to
substantially influence either the price or availability of illicit drugs.
And Colorado taxpayers are funding this failure to the tune of $100 million
per year. Overuse of prison for drug offenses also inflicts huge indirect
economic costs on the state, because small-time users who are given a felony
conviction will have a much harder time getting jobs and becoming
productive, tax-paying citizens in the future.

Runaway spending for incarcerating drug users is an abject failure, and is a
major cause of state fiscal problems. If the legislature believes that
taxpayers ought to solve the state's fiscal problems by giving up their tax
refunds, the legislature ought to show its own good faith by ending its
addiction to spending money on long prison terms for non-violent, low-level
drug users.

Mike Krause is director of the Justice Policy Initiative at the Independence
Institute in Golden