“IN FISCAL YEAR 2010, the Indiana Department of Correction (IDOC) had
$562.2 million in prison expenditures. However, the state also had more
than $7.2 million in prison-related costs outside the department’s budget.
The total cost of Indiana’s prisons—to incarcerate an average daily population
of 38,417—was therefore $569.5 million, of which 1.3 percent were costs
outside the corrections budget.
Determining the total cost of state prisons requires accounting for expenditures in all areas of government that support the prison system—not just those within the corrections budget. The additional costs to taxpayers can include expenses that are centralized for administrative purposes (such as employee benefits and capital costs) and services for inmates funded through other agencies. Prison costs also include the cost of underfunded contributions to corrections employees’ pensions and retiree health care plans; states must pay the remainder of those contributions in the future.
Prison costs outside the IDOC’s budget included the following:
UNDERFUNDED PENSION CONTRIBUTIONS. In 2010, the state of Indiana contributed 92 percent of the amount necessary to fully fund pensions in the long run. The state will need to pay the remaining $2.2 million, plus interest, to provide for corrections employees’ pension benefits.
STATEWIDE ADMINISTRATIVE COSTS. In 2009, the most recent year for which Vera could obtain data, the IDOC incurred $5.1 million in indirect costs (such as auditing or information technology) paid by state administrative agencies. Indirect costs related to prison operations provided by these agencies were determined using the Statewide Cost Allocation Plan (SWCAP).
CAPITAL COSTS. These costs are funded outside the corrections department. Vera could not obtain this information and these costs are not included in this fact sheet. Therefore, the state’s total prison cost calculated for this report is a conservative estimate.
Download the report, which fully explains the methodology, at www.vera.org/priceofprisons.