Prisons cost American taxpayers well over $100 billion a year once federal, state, and local corrections budgets are added together. State governments carry the largest share at an estimated $80.4 billion in fiscal year 2025, the federal Bureau of Prisons requested about $8.75 billion for fiscal year 2026, and county and municipal jails add at least $25 billion more. That total covers everything from meals and medical care to officer salaries, facility construction, and decades of pension obligations.
Where the $100 Billion Comes From
State governments do the heaviest lifting. Total state corrections expenditures, including capital costs, reached an estimated $80.4 billion for fiscal year 2025 according to the National Association of State Budget Officers.1NASBO. 2025 State Expenditure Report – Corrections Tables Corrections typically ranks among the four biggest segments of state budgets, alongside K-12 education, Medicaid, and higher education.
The Federal Bureau of Prisons submitted a fiscal year 2026 budget request of roughly $8.75 billion.2Department of Justice. BOP Salaries and Expenses FY 2026 Congressional Justification Federal corrections spending has grown steadily, from about $7.1 billion in fiscal year 2019 to $8.2 billion in fiscal year 2023.3Department of Justice. Federal Prison System FY 2023 Budget Request at a Glance
County and municipal jails, which hold people awaiting trial or serving shorter sentences, cost at least $25 billion a year based on the most recent nationwide data, or roughly six percent of local government budgets. Put the three layers together and the annual public price of incarceration in the United States comfortably clears $100 billion.
What It Costs to Incarcerate One Person
The federal per-inmate figure is the cleanest benchmark. For fiscal year 2024, the average cost of housing one person in a Bureau of Prisons facility was $47,162 a year, or about $129 a day. Placement in a residential reentry center ran slightly less, at $43,703 a year, or $120 a day.4Federal Register. Annual Determination of Average Cost of Incarceration Fee (COIF)
Those averages hide wide variation by facility type. Bureau of Prisons per capita figures for fiscal year 2022 show the following daily costs:
- Minimum security: about $151 per day
- Low security: about $130 per day
- Medium security: about $123 per day
- High security: about $165 per day
- Medical referral centers: about $282 per day
- Privately operated facilities: about $93 per day
Medical referral centers cost the most because they provide specialized healthcare; privately operated institutions post the lowest daily rate, though the total taxpayer cost of those contracts is a separate question.5Bureau of Prisons. Federal Prison System Per Capita Costs FY 2022
Basic daily costs cover food, clothing, laundry, and hygiene products, along with utilities for facilities that never close. Per-person utility costs run roughly $1,500 a year, and food costs average under $5 per person per day.
Where the Money Actually Goes
Staffing and Payroll
Employee compensation is the single largest line item in any corrections budget. The Bureau of Labor Statistics reports a median annual salary of $57,970 for correctional officers as of May 2024, with the lowest ten percent earning under $41,750 and the highest ten percent earning more than $93,000.6Bureau of Labor Statistics. Correctional Officers and Bailiffs Federal entry-level pay starts above $51,000, with locality adjustments raising the number in expensive areas.7USAJobs. Correctional Officer – Direct Hire
Base pay is only part of what taxpayers fund. Chronic understaffing pushes overtime higher, and benefits packages including health insurance, hazard pay, and retirement contributions add 30 to 50 percent on top of base salary. Pension and retiree healthcare obligations continue for decades after an officer leaves the job.
Healthcare Behind Bars
Correctional facilities are constitutionally required to provide medical care, and the bill is substantial. Healthcare spending per incarcerated person averages roughly $8,000 a year in inflation-adjusted estimates, and the number climbs sharply with age. Inmates 50 and older can cost about twice as much to house as younger inmates because they need more medical services, and that population has been growing.
Chronic conditions drive some of the steepest costs. Hepatitis C is far more common in correctional populations than in the general public, and treatment courses run between $24,000 and $80,000 per patient.8NCBI. The Burden of Untreated HCV Infection in Hospitalized Inmates – A Hospital Utilization and Cost Analysis Mental health treatment is another expanding category, and facilities must keep nursing staff on hand around the clock with physicians on site or on call.
Building and Maintaining Facilities
New prison construction is one of the largest capital expenditures a government undertakes. Recent state prison complexes have exceeded $500 million, and a state facility completed in 2022 came in at $1.05 billion after pandemic-era construction cost increases and site preparation challenges. Even mid-sized jails can cost $300 million or more.
Governments usually finance these projects with bonds paid off over 20 to 30 years, so a $500 million facility can easily cost more than $750 million once interest is included. Older facilities keep drawing money too, requiring renovations to meet fire codes, accessibility standards, and updated security requirements.
The Private Prison Question
About 88,600 people were held in privately operated facilities at the end of 2023. Private companies contract with federal and state governments and charge a per-inmate daily rate. Those rates can look cheaper on paper, with the Bureau of Prisons reporting about $93 per day for private institutions in fiscal year 2022.5Bureau of Prisons. Federal Prison System Per Capita Costs FY 2022
The contracts often include a catch. Roughly 65 percent of private prison agreements contain some form of minimum occupancy clause, guaranteeing payment for a set percentage of beds whether they are filled or not. Many set the floor at 90 percent, and some require payment for 100 percent of beds even when the facility is partly empty. That means taxpayers can be paying for thousands of unused beds at any given time.
What Actually Cuts the Bill
The largest cost gap in the system is between locking someone up and supervising them in the community. According to the federal judiciary, detaining a person before trial and then incarcerating them after conviction cost roughly ten times more than community supervision in fiscal year 2024. Placement in a residential reentry center cost about nine times more than probation or parole supervision.9U.S. Courts. The Public Costs of Supervision Versus Detention
In annual terms, federal incarceration runs upward of $40,000 per person, while probation supervision costs a small fraction of that. Community supervision does not fit every case, but the gap is why alternatives to incarceration keep coming up in budget debates.
Recidivism drives a large share of repeat spending. Among federal offenders released from custody, about 49.3 percent were rearrested within eight years, roughly a third were reconvicted, and about a quarter were reincarcerated.10U.S. Sentencing Commission. Recidivism Among Federal Offenders – A Comprehensive Overview Every return trip means another arrest, prosecution, defense, and years of incarceration at $40,000 or more per year.
Prison education has shown measurable savings against those repeat costs. A widely cited analysis found that people who participated in correctional education programs were 43 percent less likely to return to prison within three years, and that every dollar spent on prison education produced four to five dollars in savings on reincarceration.11RAND. Policy Impact Reduced recidivism also shrinks the broader economic loss from keeping formerly incarcerated people out of the workforce, an impact estimated at $78 billion to $87 billion in reduced GDP annually.
Costs Outside the Tax Base
Some costs of incarceration do not fall on taxpayers at all. Phone and video calls from correctional facilities have historically been priced far above comparable services outside, and families cover those charges directly. The FCC has capped these rates under the Martha Wright-Reed Act, with interim limits taking effect in 2026: audio calls from prisons capped at $0.09 per minute, jail audio calls ranging from $0.08 to $0.17 per minute, prison video calls capped at $0.23 per minute, and jail video calls between $0.17 and $0.42 per minute. Facilities may add up to $0.02 per minute on top of those caps.12Federal Register. Incarcerated Peoples Communication Services – Implementation of the Martha Wright-Reed Act These charges are a real financial consequence of the system, but they do not appear in the $100 billion figure taxpayers fund each year.