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Allocation of the California Drug War Costs: Direct Expenses, Externalities, Opportunity Costs, and Fiscal Losses

NCJ Number
Justice Policy Journal: Analyzing Criminal and Juvenile Justice Issues and Policies Volume: 1 Issue: 1 Dated: August 2001 Pages: 1-40
C. Daniel Vencill; Zagros Sadjadi
Daniel Macallair
Date Published
August 2001
40 pages
This study attempted to identify the total costs of California’s drug war, based on expenditures by various Federal, State, and local governments.
In the past two decades, California policy makers have implemented an ambitious social experiment intended to control illicit drug use through law enforcement intervention evidenced by the escalating incarceration rates of drug law violators. The enforcement of California drug policy is estimated to cost taxpayers $4 to $5 billion a year. Drug policy enforcement in California is funded by a combination of State and Federal budget allocation which are made from State and Federal revenue, and predominantly from income and sales taxes. The incarceration of otherwise employed or employable drug offenders removes productive workers from the workforce. The loss of productivity impacts the associated tax revenues. The unintended consequences and collateral damage include: corruption costs precipitated by the drug war, policy and funding decisions, capital construction costs, and resume damage and reduction of lifelong earnings. This study was an attempt to quantify California’s enormous drug war costs which are borne primarily by the taxpayers of the State. The study indicates that California policymakers definitely need to develop and maintain a drug war program budget providing a full and accurate cost accounting. A large portion of income and sales taxes paid by California taxpayers goes to arresting, processing, prosecuting, incarcerating, paroling and monitoring nonviolent drug offenders. Nine percent of taxpayers’ income tax and 8 percent of their sales tax go to the drug war with an additional $80 per Californian per year financing prison and jail construction. The benefits of the drug war incarceration explosion are more difficult to quantify. This study demonstrated a benefit-cost ratio within the range of .22 to .46 which is far too low to establish confidence in any California drug war efficiency. California voters have expressed their preferred interest in an alternative option, investing in treatment and prevention rather than in incarceration. However, any policy alternatives to incarcerating nonviolent drug offenders must address the issues of oversight and accountability. Tables and references