The blog of the Urban Institute
August 7, 2020

Criminal Justice Finance in the COVID-19 Recession and Beyond

The third chart ("State and Local Public Employment") was updated to reflect the latest US Bureau of Labor Statistics data. The number of jobs eliminated by state and local governments since February was reduced from 1.5 million to 1.2 million (updated 8/7/20).


The COVID-19 pandemic and resulting recession are putting an enormous strain on state and local governments. Beyond the well-known difficulties states and localities face in recessions and the challenges of managing a public health emergency, leaders managing this crisis must also grapple with how to address an upwelling of protest and discontent over police violence, inequity in the administration of criminal justice, and what communities spend on these programs.

Many of these needed reforms are not related to fiscal policy and will play out over a long time period. But budget choices are happening now, and by understanding the nature and potential effects of the current fiscal crisis, avoiding repeating the mistakes of the past, and focusing on equitable and effective changes, policymakers and advocates can turn these challenges into opportunities to enact lasting public safety reforms.

Financing the “four Cs”: Cops, courts, corrections, and community-based programs

The Council on Criminal Justice recently established a commission focused on the pandemic’s effects on criminal justice (we recently presented this research to the commission). The commission is focused on the “four Cs”: cops (local and state police and sheriffs), courts (criminal courts, plus district attorneys and public defenders), corrections (prisons, jails, probation, and parole), and community-based programs.

In 2017 (the most recent year for which data are available), state and local governments spent more than $240 billion on the first three Cs: $114.5 billion on cops, $47.8 billion on courts (including civil courts), and $78.7 billion on corrections.

Much of this spending is local, especially spending on policing. States spent $15.4 billion on police in 2017 (1.1 percent of all state direct general spending), and cities spent $62.9 billion (13.5 percent of city direct general spending). And though states spent more than counties on courts ($23.9 billion versus $18.0 billion) and corrections ($48.8 billion versus $25.0 billion) in 2017, each expenditure was a larger share of direct spending at the county than state level (1.7 percent versus 4.6 percent and 3.4 percent versus 6.4 percent).

Community-based programs (the fourth C) are an important component of public safety and critical for innovation, but comprehensive fiscal data are less available for these programs. In general, these programs have relatively lower overall cost, though. For example, Colorado’s Community Reentry program (reentry and rehabilitation) and the District of Columbia’s Cure the Streets program (violence prevention) both cost roughly $3 million annually. 

Overall, criminal justice spending is $1 of every $5 spent at the county level, $1 in every $6 spent at the city level, and $1 of every $20 spent at the state level.

Criminal justice spending as share of direct general expenditures in 2017

However, criminal justice spending varies significantly across jurisdictions in part because different governments provide different services. In some smaller localities, spending on policing accounts for most of the budget because it’s their main service. New York City spent nearly $6 billion on policing in 2017, but it accounted for only 6 percent of its budget because the city (not an independent school district) also funds K–12 education.

Nearly all spending on policing, courts, and corrections is current spending (salaries, training, and lab work) rather than capital spending (such as prison and court construction). And a majority of each criminal justice expenditure goes to salary and wages. Thus, cost of living differences are a large reason why New York has higher per capita criminal justice expenditures than Kentucky.

Payroll as a share of criminal justice spending in 2017

The state and local COVID-19 fiscal crisis is already affecting criminal justice programs

States (PDF) and cities went into the year with record-high savings, but nothing could have prepared them for a downturn this abrupt and of this magnitude. More than 50 million Americans have filed initial claims for unemployment insurance since mid-March—more than during the entire Great Recession—contributing to an unprecedented collapse in tax revenue and increased demands for public services.  

Because state and local governments must balance their budgets, governments will have to increase taxes or cut spending. Already, several governors are calling for across-the-board cuts exceeding 10 percent in the current fiscal year, and three-fourths of municipalities have made spending cuts (PDF), with many resorting to across-the-board reductions. More and deeper cuts are likely still on the way, especially without additional federal aid.

Given the size of the fiscal gaps, it’s likely impossible to exclude criminal justice programs from these cuts. And because so much of criminal justice spending is for payroll, the cuts often lead to job losses. In fact, state and local governments have already eliminated 1.2 million public jobs since February, reducing state and local public employment to levels not seen since 2001.

Line chart: state and local public employment

For example, Miramar, Florida, furloughed more than 200 police officers in May. Westland, Michigan, furloughed 137 workers, including several district court employees in the same month. Denver and Tulsa avoided furloughing police officers during their first rounds of job cuts, but these departments could become vulnerable in the coming months. And although it’s difficult to assess from media reports how these large budget cuts affect smaller community-based programs, several cities have cut youth services that are akin to community-based safety and crime-reduction programs. 

Going forward: Avoiding repeating past mistakes and finding opportunity for reforms

The current fiscal crisis is daunting, but policymakers can take steps to mitigate problems and even embrace long-desired change.

The first step is to avoid repeating past mistakes. For example, as revenues fell during the last recession, some localities turned to excessive fines and forfeitures. Although Ferguson, Missouri’s system was extreme, any government that turned to fines and forfeitures pushed the burden of addressing fiscal problems onto low-income residents and communities of color. Even an overreliance on traffic violation fees can harm already under resourced communities.

If forced to cut, governments should try to avoid blunt measures. Simply reducing criminal justice employees by seniority could reverse prior reforms aimed at diversifying the workforce. And cutting one department or agency without understanding the effects on another could exacerbate future fiscal problems. For example, cuts to the court system could slow case processing, leading to jail crowding while detainees await dispositions, thus increasing corrections costs.

Then there are larger conversations about criminal justice reform. Though proposals for police reform span a continuum, one thing is clear: simply reducing spending across the board is not reform. Even with ample opportunities to shift funds across criminal justice programs, achieving reform goals could require more funding—just to different types of resources or programs.

One promising solution: community-based programs representing holistic, comprehensive approaches to public safety. These evidence-based programs are relatively cheap compared with traditional crime-control responses. In fact, fiscal austerity could prompt efforts to enhance investment in communities by providing more resources for community-led safety programs, better addressing underlying needs and equity gaps, and spurring local employment opportunities.

Ultimately, policymakers need to understand what drives budget costs and which policies effectively and equitably lower expenses.

A protester carries a sign during a "Defund the Police" march from King County Youth Jail to City Hall in Seattle, Washington on August 5, 2020. (Photo by Jason Redmond / AFP via Getty Images)

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