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AMERICAN CIVIL LIBERTIES UNION

January 11, 2012

IMPROVING BUDGET ANALYSIS OF STATE CRIMINAL JUSTICE
REFORMS: A STRATEGY FOR BETTER OUTCOMES
AND SAVING MONEY
by Michael Leachman, Inimai M. Chettiar, and Benjamin Geare1
An increasing number of states are considering criminal justice reforms proven to protect the
public and produce significant cost savings. For example, some states are offering effective addiction
treatment to more people convicted of drug-related crimes instead of incarcerating them. Other
states are increasingly turning to sanctions other than prison time for people who violate the
technical conditions of their parole, for example, by missing a meeting with their parole officer. The
states that have implemented these reforms have seen their crime rates remain at historically low
levels or fall further and have saved many millions of dollars in prison construction and operating
costs, freeing up revenue they can use to avert
or restore some recession-driven cuts to schools
Table of Contents
and other priorities. By allowing people who
pose little threat to others’ safety to remain in
Criminal Justice Fiscal Note Best
the workforce and their communities, rather
Practices…………………………………………………….3
than in prison, these new approaches also pay
off for states by providing broader economic
I. Criminal Justice Reforms Can Save Money
and Protect Public Safety…...............................4
and social benefits.
Despite those positives, some states have
rejected these types of reforms. In some cases,
legislators may have turned them down because
they were not given a rigorous assessment of the
cost savings that would result. Often, official
state estimates of the savings or cost of
proposed legislation either lack the information
necessary to good decision-making or are not
produced at all. By improving these estimates,

II. Good Fiscal Notes Can Help States
Recognize the Value of These Reforms……..…7
III. Fiscal Note Best Practices Explained………..….9
Appendix: 50 State Comparison of Best
Practices…………………………………………………..26
IV. Acknowledgements……….............................…28

Michael Leachman, Director of State Fiscal Research, Center on Budget and Policy Priorities; Inimai M. Chettiar,
Advocacy & Policy Counsel, American Civil Liberties Union; Benjamin Geare, State Fiscal Policy Intern, Center on
Budget and Policy Priorities.
1

known as ―fiscal notes,‖ states can help legislators recognize any cost benefits and better allocate
scarce budgetary resources.
Based on an analysis of all the fiscal notes written by states for significant adult sentencing and
corrections bills enacted in the past three years2 — a total of over 600 bills from 49 states — this
report finds that:


States did not write fiscal notes for about 40 percent of the bills. Two states, Delaware
and Hawaii, never write fiscal notes for criminal justice bills. Others, including South Dakota
and Vermont, rarely write them. Without an official certification that a bill would save money,
legislators may have less incentive to vote for it.



The majority of states failed to examine fiscal impacts beyond a year or two into the
future. Fifteen of the 29 states that wrote fiscal notes finding a significant fiscal impact failed to
estimate the impact beyond two years. Some effective criminal justice reforms, including certain
drug and mental health treatment programs, require initial modest startup costs but reduce
future prison spending significantly. Without an official recognition of the future savings,
legislators are less likely to be aware of the long-term fiscal benefits of these reforms, reducing
the chances of enactment.



About 15 percent of fiscal notes did not estimate a budgetary impact or indicated only
that the impact was a generically positive or negative one. While some of these notes
contained some useful information, they failed to accomplish the primary goal of a fiscal note:
to provide the best possible estimate of the bill’s impact on the state budget.



Few states described the method used to determine fiscal impacts. Only 13 of the 29
states that wrote fiscal notes finding a significant impact consistently described the method they
used to determine the cost or savings of a bill. Without an understanding of the methodology,
lawmakers and the public are less able to evaluate the accuracy of fiscal notes, reducing their
credibility and usefulness.



Some states do little to ensure the credibility of their fiscal notes. In some states, executive
branch agencies produce fiscal notes with no review by nonpartisan analysts. Perhaps worse, in
New York a bill’s legislative sponsor produces its fiscal note and may use any methodology and
sources to estimate the impact. Legislators must believe that fiscal note findings are credible
before they can rely on them when deciding how to vote.

This report lays out best practices for writing criminal justice fiscal notes — ways to make these
notes maximally useful to lawmakers and the public. A few states, including Texas and
Washington, already produce fiscal notes that meet most of these standards, but no state
incorporates all of these best practices. All states could improve their fiscal notes. Achieving these
best practices may require states to appropriate a bit more money to the agencies that write fiscal
notes (see Text Box). Nearly all the best practices described here apply to all fiscal notes, not just
notes for criminal justice bills.
This report analyzed all fiscal notes locatable for bills identified as ―significant state sentencing and corrections
legislation‖ enacted in each state in the 2009, 2010, and 2011 legislative sessions as compiled by the National Conference
of State Legislatures, http://www.ncsl.org/?TabId=20763. Hence, this pool only includes enacted legislation, and does
not include fiscal notes that may have been written for bills that did not become law. This database did not include any
fiscal notes from Alaska because that state did not enact any significant adult criminal justice bills in the last three years,
according to that database.
2

2

Criminal Justice Fiscal Note Best Practices
Our review of all fiscal notes for significant adult sentencing and corrections laws in the last three
years found that some states have adopted certain practices that other states could implement to
make their fiscal notes more useful. Taken together, they form the following list of “best
practices,” which are explained in greater detail in Part III of this report.
All criminal justice fiscal notes should be consistent, properly researched, detailed, and
accessible.
Consistent
 Written for all criminal justice bills that receive a committee hearing, or at least all bills that
pass out of committee.
 Updated when an adopted amendment may have fiscal impacts.
 Produced in a consistent format, following an established set of guidelines.
 Produced by a source that is trusted, non-partisan, and adequately resourced.
Properly Researched
 Include an estimate of the savings, costs, or revenue gains, and avoid claiming an
indeterminate impact.
 In rare cases when an impact estimate is impossible, include a detailed explanation for that
conclusion.
 Project the fiscal impact at least five years into the future.
 Analyze the impact against maintaining current policy.
 Include a clear description of the methodology and assumptions.
 Cite the information sources.
Detailed
 Break down the impact of each major provision of the bill, and the impact on each affected
government agency or revenue source.
 Break down estimates into one-time and recurring impacts.
 Include some indication of impacts on local governments.
 Include impacts on prison and jail populations.
Accessible
 Easily available on the state legislature’s website.
 Contain basic information about the bill, including bill number and version, sponsor(s), and
summary.
 Include contact information for the lead analyst.
To achieve these best practices, many states may need to invest more resources in their fiscal
note process, for example by hiring more professional research staff and upgrading the data
available to them. But these costs are much lower than the costs of enacting or maintaining
expensive criminal justice policies that over-spend on prisons, weaken a state’s economy, and
damage its social fabric.

3

I. Criminal Justice Reforms Can Save Money and Protect Public Safety
In the 1980s and 1990s, many states
adopted sweeping criminal, sentencing,
and parole laws that greatly increased
the number of people in prison. These
laws lacked research proving their
effectiveness at reducing crime or
rehabilitating people. Since 1980 the
nation’s imprisonment rate — the
share of the population in prison —
has more than tripled.3 The United
States holds nearly a quarter of the
world’s incarcerated population, but
represents only five percent of the
world’s total population.4 State prisons
hold the vast majority — about 87
percent — of U.S. prisoners.5
As a result, state spending on prisons
has risen rapidly. In nearly all states,
corrections spending now absorbs a
larger share of general fund budgets
than in the past, in some cases much
more. In 15 states, the share has at least
doubled since the mid-1980s, and in 31
states it rose by at least half.6 In
Arkansas, for example, corrections’

Corrections Spending Has Grown
As a Share of States’ Budgets

Percent change in share of general fund
spent on corrections, 1986-2010
MA
RI.

CT
NJ
DE.

MD
DC •

.Q - "',

-....... y "

TX

HI ()

~

D Share increased by less than half
• Share increased by more than half
• Share doubled or more
Share declined / no change

o

Note: Oklahoma data reflect change from 1987-2010; Virginia data
reflect change from 1990-2010.
Source: National Association of State Budget Officers.

The ―imprisonment rate‖ is the share of the population serving sentences in either state or federal prisons. It also
includes individuals sentenced by state governments to prison who are housed in local county jails, but it does not
include individuals housed in local county jails either awaiting trial or sentenced to jail by local jurisdictions. The U.S.
imprisonment rate increased from 139 per 100,000 people in 1980 to 497 per 100,000 in 2010. See Bureau of Justice
Statistics, U.S. Department of Justice, ―Imprisonment Rate, 1980-2009,‖
http://bjs.ojp.usdoj.gov/content/glance/incrt.cfm, and Paul Guerino, Paine M. Harrison, and William J. Sabol,
―Prisoners in 2010,‖ Bureau of Justice Statistics, Table 1, p. 2, http://www.bjs.gov/content/pub/pdf/p10.pdf.
3

International Centre for Prison Studies, World Prison Brief, ―Entire World, Prison Population Totals,‖
http://www.prisonstudies.org/info/worldbrief/wpb_stats.php?area=all&category=wb_poptotal. This ―incarceration
rate‖ is based on all people held in U.S. federal and state prisons and local jails as of December 31, 2009. In 2010, the
U.S. incarcerated population declined slightly, but it still remains at about 2.3 million people. Lauren E. Glaze,
―Correctional Population in the United States,‖ 2010, Bureau of Justice Statistics, Appendix Table 2, p. 7,
http://bjs.ojp.usdoj.gov/content/pub/pdf/cpus10.pdf. The U.S. and world population estimates are from the
Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World
Population Prospects. The 2010 Revision can be found at http://esa.un.org/unpd/wpp/index.htm.
4

Paul Guerino, Paige M. Harrison, and William J. Sabol, ―Prisoners in 2010,‖ Bureau of Justice Statistics, Appendix
Table 1, p. 14. On December 31, 2010, there were 1,395,356 people in prison under state jurisdiction and 209,771 in
prison under federal jurisdiction. This is based on the imprisonment rate. See footnotes 3 and 4 for more explanation.

5

CBPP analysis of data from National Association of State Budget Officers, ―State Expenditure Report 2010,‖
December 2011.
6

4

share rose from 2.6 percent of the budget in 1986 to 8.1 percent in 2010. Over the same period in
Vermont, it rose from 4.2 percent to 16.7 percent of the budget.
This rapid growth in prison spending has left less funding for schools, universities, health care,
and other state priorities. If states in 2010 had spent the same share of their budgets on corrections
as they did in 1986, they would have had over $16 billion available to protect these priorities from
the harmful spending cuts imposed that year.7
In recent years, states increasingly have considered cost-saving alternatives to incarceration that
are proven to reduce recidivism and maintain public safety. These policies include offering addiction
treatment instead of prison to people convicted of certain drug offenses. Treatment programs are
more effective than incarceration in helping people overcome drug addiction and decreasing their
chances of committing crimes in the future.8 Other examples are laws that sanction — but do not
automatically send back to prison — people who violate the technical conditions of their parole by,
for example, missing a parole meeting or failing to complete a community service assignment. Onethird of state prison admissions in recent years consisted of individuals who committed technical
parole violations, not new crimes.9 Immediate and predictable sanctions for such violations are more
effective in reducing recidivism than putting people back in prison.10 These alternatives also allow
people who pose little threat to the safety of others to remain in or become productive members of
the workforce, thereby boosting the state’s economic output. Furthermore, they allow people to
remain in their communities and with their children, strengthening the state’s social fabric and
quality of life.11
These lower-cost alternatives to prison are particularly compelling in the aftermath of the recent
recession. Since the recession hit, states have absorbed budget shortfalls totaling over $530 billion.
With revenues projected to recover slowly, states face additional shortfalls next year of at least $44
7

CBPP analysis of National Association of State Budget Officers data.

Redonna K. Chandler et al., ―Treating Drug Abuse and Addiction in the Criminal Justice System: Improving Public
Health and Safety,‖ National Institutes of Health, 2009,
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2681083/pdf/nihms101882.pdf.
8

See William J. Sabol and Heather Couture, ―Prison Inmates At Midyear 2007,‖ Bureau of Justice Statistics Bulletin, U.S
Department of Justice, June 2008, NCJ 221944, p. 5.
9

See, e.g., Angela Hawken and Mark Kleiman, “Managing Drug Involved Probationers with Swift and Certain Sanctions:
Evaluating Hawaii’s HOPE,‖ National Institute of Justice, https://www.ncjrs.gov/pdffiles1/nij/grants/229023.pdf;
―One In 31: The Long Reach of American Corrections,‖ Pew Center on the States,
http://www.pewcenteronthestates.org/uploadedFiles/PSPP_1in31_report_FINAL_WEB_3-26-09.pdf.
10

These kinds of broader costs and benefits of criminal justice reforms are harder to measure than the narrow budgetary
impacts that are the focus of this report. In order to capture these larger consequences, states could consider performing
a cost-benefit analysis (CBA) on proposed legislation. CBAs monetize the broad economic and social benefits of
criminal justice reforms and look at consequences beyond fiscal impacts to governments. No state requires CBAs on all
legislation. In the 1980s, Washington’s legislature created a non-partisan institute, the Washington State Institute for
Public Policy, to perform CBAs at the request of the legislature. Lawmakers can benefit from having the option of
requesting a CBA on bills, but they will still need to improve their state’s fiscal note process, especially since, unlike
CBAs, fiscal notes in some states are required by law for many or most bills under serious consideration by the
legislature. For more on how CBAs can improve criminal justice policymaking see Rachel E. Barkow, ―Federalism and
the Politics of Sentencing,‖ Columbia Law Review (2005), pp. 1278-1285; Jennifer Rosenberg & Sara Mark, ―Balanced
Justice: Cost-Benefit Analysis and Criminal Policy,‖ Institute for Policy Integrity (2011),
http://policyintegrity.org/files/publications/Balanced_Justice.pdf.
11

5

billion.12 For the near future, state budgets will remain constrained. Even if state revenues grow eight
percent a year (as they did in the 2011 state fiscal year), revenues will not reach pre-recession levels
until near the end of the decade.13
Consideration of such reforms appears to be spreading. The National Conference of State
Legislatures reported that in 2011 at least 23 states took steps both to evaluate the budgetary impact
of existing criminal justice policies and to consider alternative approaches.14 Several states have
already enacted reforms based primarily on projections that they would reduce prison populations
and costs. In states that enacted these reforms a few years ago, crime rates have remained at
historically low levels or declined further. For example:15


In 2007, building on earlier reforms, Kansas enacted laws that expanded parole eligibility and
reduced the number of people sent to prison for technical parole and probation violations.
These reforms are projected to save the state $80 million between 2007and 2012 and to reduce
by about 14 percent its prison population in 2017.16 After 2007, Kansas’ crime rate fell to its
lowest level since 1973.



Kentucky enacted a law in 2011 that eliminated pre-trial detention and instituted probation for
many drug offenses. The law made marijuana possession a misdemeanor, reduced sentences for
some drug crimes, and expanded parole eligibility. This reform is projected to save the state
$422 million by 2020 and reduce its prison population growth by over 17 percent.17



In 2010, South Carolina enacted a law that required fiscal notes for criminal justice bills,
eliminated some mandatory minimum sentences, equalized sentencing for crack and powder
cocaine crimes, provided non-prison alternatives for some drug offenses, and expanded parole
and probation eligibility. This reform is projected to save the state $241 million by 2014 and
reduce its prison population growth by 7 percent.



From 2007 to 2011, Texas enacted laws that created drug treatment programs, offered non-

Elizabeth McNichol, Phil Oliff, and Nick Johnson, ―States Continue to Feel Recession’s Impact,‖ Center on Budget
and Policy Priorities, January 9, 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=711.
12

13

Ibid, pp. 4-5.

―Studies Prompt Sentencing and Corrections Reforms and Reinvestments,‖ National Conference of State Legislatures,
in E-Bulletin: Sentencing and Corrections Policy Updates, September 2011, Issue 5, p. 3,
http://www.ncsl.org/IssuesResearch/CivilandCriminalJustice/IssueinFocusStudiesPromptSentencingandCorrectionsRe
formandReinvestments/tabid/23555/Default.aspx.
14

For a thorough detailed analysis of the reforms and the cost savings in these states see, ―Smart Reform is Possible:
States Reducing Incarceration Rates and Costs While Protecting Communities,‖ American Civil Liberties Union, 2011,
pp. 14, 35, 45, http://www.aclu.org/criminal-law-reform/smart-reform-possible-states-reducing-incarceration-rates-andcosts-while.
15

Statement by Secretary Roger Werholtz, Kansas Department of Corrections, April 1, 2009,
http://justicereinvestment.org/files/Kansas.Werhotlz.pdf. Percent change in prison population estimated from data in
graph entitled ―Kansas Projected Prison Population (FY2007 & FY2008).‖
16

17

Impact estimates based on the fiscal note written for the bill can be found at
http://www.lrc.ky.gov/record/11rs/HB463/FN.doc, and projected prison population without the reforms can be
found at Legislative Research Commission, ―Report of the Task Force on the Penal Code and Controlled Substances
Act,‖ Research Memorandum No. 506, revised April 21, 2011, p. 8.

6

prison sanctions for technical parole violations, and expanded parole and probation eligibility.
Through the current fiscal year, these reforms saved the state an estimated $2 billion in prison
construction costs and reduced its projected prison population by over 11,000 people.18 After
2007, as in Kansas, Texas’ crime rate fell to the lowest level since 1973.
In each of these four cases, legislators were aware of the cost savings of the reforms. They had
projections of their fiscal impacts in part thanks to intensive technical assistance provided by the
Pew Center on the States.19 To assess regularly the fiscal impact of future reform proposals, in
similar detail and without the support of outside technical assistance providers, these states and
others will need to improve their in-house capacity to do this sort of analysis. If all states were able
directly and rigorously to evaluate criminal justice reform proposals, they would have more
information – on an ongoing basis – to use in improving their sentencing and corrections policies.
II. Good Fiscal Notes Can Help States Recognize the Value of These Reforms
If a state does not account accurately for the fiscal impacts of criminal justice bills, legislators may
not realize the significant cost savings of the proposals and may therefore fail to enact them. If
legislators lack accurate estimates of the cost of legislation generally, they may be more likely to
support criminal justice policies that make matters worse by unnecessarily increasing incarceration
rates and costs.
Nearly every state produces, in some form, fiscal notes estimating the costs, savings, or revenue
gain of at least some bills.20 Fourteen states establish by law special requirements for fiscal notes
written for criminal justice bills — typically those bills that increase sentences or create new crimes.21
At least three of these states, Nevada, North Carolina, and Virginia, require specialized criminal
justice fiscal notes only for bills that increase the length of criminal sentences, not for bills that decrease
criminal sentences or otherwise reduce costs. It is just as important for legislators to understand
when a bill would save the state money as it is for them to understand when a bill would increase
costs.22
However, Texas’s prison population has begun to grow again, possibly signaling a need for further reform. From 2009
to 2010, its prison population grew by 2,400. Paul Guerino, Paige M. Harrison, and William J. Sabol, ―Prisoners in
2010,‖ Bureau of Justice Statistics, Appendix Table 1, p. 14, http://bjs.gov/content/pub/press/p10cpus10pr.cfm.
18

For more information about Pew Center on the States’ technical assistance in this area, see
http://www.pewcenteronthestates.org/initiatives_detail.aspx?initiativeID=31336.
19

Hawaii is the only state that does not produce fiscal notes for any bills. Delaware only produces fiscal notes for bills
with a revenue impact, which excludes most criminal justice bills.
20

These 14 states are Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Missouri, Nevada, North Carolina, Ohio,
Oregon, Rhode Island, South Carolina, and Virginia. ―Correctional Impact Statements,‖ National Conference of State
Legislatures, August 2011, http://www.ncsl.org/portals/1/Documents/cj/BulletinSept-2011.pdf. We do not include
Texas in our list, as NCSL does, because Texas’ law requires a correctional impact statement only for bills that increase
court costs or fees for people convicted of crimes.
21

Some states, like Iowa and Connecticut, have laws requiring racial impact statements for all bills and amendments that
would increase or decrease the pretrial or sentenced populations of state corrections facilities. Minnesota’s sentencing
commission has begun to produce racial impact assessments as part of an internal policy decision. These types of racial
impact statements are excellent companions to fiscal notes. They provide additional information on how policies affect
communities of color — something a fiscal note typically does not provide — so legislators can better understand the
impacts of policies on populations within the state. For more background on racial impact statements see Marc Mauer,
22

7

Typically, fiscal notes are produced by staff of the affected state agencies, the legislature, the
governor’s budget office, or some combination of these. In some states, a professional team of
analysts oversees the fiscal note process to ensure accuracy. In a few states, including Connecticut
and Virginia, the state sentencing commission writes or helps write criminal justice fiscal notes.23
The role of fiscal notes in the legislative process varies by state, but in most states they are highly
influential, and the information they contain can determine whether a bill is enacted or not. If a
fiscal note finds that a bill will require new state spending, the chances of that bill’s passage diminish.
Since nearly all states require balanced budgets, new spending requires increased revenue or cuts to
other programs. Conversely, if a fiscal note finds that a bill will save the state money, it has a higher
chance of enactment.
Good fiscal notes promote an open and rational policy-making process — one conducive to
enacting effective criminal justice reforms — and serve other important purposes. More specifically,
high-quality fiscal notes can:


Help state legislators make rational policy and fiscal decisions, including enacting
criminal justice reforms. With good information about the cost or savings of a bill, legislators
can better judge its value and recognize whether it will save money. Introducing more rationality
into criminal justice policymaking is especially important given that past policymaking in this
area historically has not been grounded in analysis of the benefits and costs of legislation.



Help depoliticize the policymaking process. Accurate fiscal notes can help legislators get
beyond politics and find common ground on the state’s broader interests. Although some
legislators may be wedded to particular policy positions regardless of fiscal impacts, others may
be swayed by credible projections of cost savings from criminal justice reforms.



Make the budget process more open and transparent. In some states, a small number of
powerful policymakers tightly control the budget process. Good fiscal notes can open up this
process by giving all legislators access to valuable, non-partisan information about a budget
bill’s savings or cost. In addition, easily accessible and readable fiscal notes can help the public
engage more meaningfully in legislative policy debates. In these ways, good fiscal notes can
create room for fresh ideas and new ways of addressing policy challenges.



Reveal long-term budget impacts. The state budget process often focuses on producing a
balanced budget for the upcoming fiscal year and ignores the longer term. Good fiscal notes
include estimates of costs and savings in future years, helping legislators see the long-term
impact of their votes. This is especially important for criminal justice reforms because some
require modest up-front spending in order to achieve significant long-term savings. Good fiscal
notes can help legislators see these important benefits to the state’s long-term fiscal health.

―Racial Impact Statements: Changing Policies to Address Disparities,‖ The Sentencing Project,
http://www.sentencingproject.org/doc/rd_abaarticle.pdf; Marc Mauer, ―Racial Impact Statements as a Means of
Reducing Unwarranted Sentencing Disparities,‖ Ohio State Journal of Criminal Law (2007), p. 19,
http://www.sentencingproject.org/doc/publications/rd_racialimpactstatements.pdf.
―Correctional Impact Statements,‖ National Conference of State Legislatures, August 2011,
http://www.ncsl.org/portals/1/Documents/cj/BulletinSept-2011.pdf.
23

8



Help assure a balanced budget. As Oregon’s fiscal note training materials point out, fiscal
notes can serve as an ―early warning‖ for the budget process when costly bills gain political
momentum.24 They can also help legislative budget committees take into account the fiscal
benefits of criminal justice reforms being considered by judiciary and public safety committees,
boosting the chances that these reforms will be enacted.

III. Fiscal Note Best Practices Explained
Criminal justice fiscal notes vary widely from state to state. Some states produce useful fiscal
impact estimates for a large share of the criminal justice legislation under consideration by the
legislature. Others rarely do. Often, states omit key features from their fiscal notes and fail at
important practices.
Based on a review of all fiscal notes states prepared for significant adult criminal justice bills
enacted in the last three years, this section highlights best practices that meet four main objectives.
Criminal justice fiscal notes should be consistent, properly researched, detailed, and accessible.
This section explains these objectives, their importance, and what states do (or fail to do) to meet
them. No state fully achieves all the best practices identified in this report. All states — and
lawmakers — stand to benefit from improving their fiscal note practices by following the best
practices of their peers. (For a summary of how individual states comport with these best practices,
see the Appendix.)
A. Fiscal Notes Should Be Consistent
States can and should produce consistent fiscal notes for criminal justice bills. If they do not,
legislators will lack basic information crucial to prudent fiscal management and thoughtful criminal
justice policy. Unless all notes contain the same sort of useful and objective information, legislators
may favor some bills over others arbitrarily. For example, a cost-saving criminal justice reform bill
for which the state produces a fiscal note may have a much better chance of passage than a bill for
which the state neglects to produce a fiscal note.
To be consistent, fiscal notes should be:


Written for all criminal justice bills that receive a committee hearing, or at least all bills
that pass out of committee. To manage the state’s budget prudently and choose wisely among
competing policy options, legislators need to know how much an individual bill, if made law,
would save or cost the state. Without an official certification of each bill’s fiscal impact,
legislators may have less reason to vote for criminal justice bills that would save money.
Our review found that states did not write a fiscal note for about 40 percent of the adult
criminal justice bills they enacted in the last three years. Some states simply never produce fiscal

―2011 Legislative Session: Fiscal Impact Statements Frequently Asked Questions,‖ Oregon State Legislature,
Legislative Fiscal Office, p. 1,
http://www.leg.state.or.us/comm/lfo/2011_FIS/2011_FIS_FrequencyAskedQuestions.pdf.
24

9

notes for criminal justice bills at all. Hawaii, for example, does not produce fiscal notes for any
bills. Delaware writes fiscal notes only for bills with a revenue impact, and thus typically
excludes bills that affect criminal justice spending. Other states, including South Dakota and
Vermont, rarely produce fiscal notes for any legislation. Some states, including Georgia,
Illinois and Mississippi, produce notes only when legislators request them, and apparently
there were no requests on criminal justice bills during this time period. Still other states,
including New Jersey, often produce fiscal notes but did not produce them for the criminal
justice bills we reviewed. The legislative research analysts in these states apparently concluded
that the bills did not have sufficient fiscal impacts to warrant a note, but they did not justify this
conclusion as the best practices in this report recommend.
Ideally, states should write fiscal notes for every criminal justice bill, helping to level the playing
field for bills by providing the fiscal impact of proposals regardless of their initial level of
political support. However, given the resource constraints of state legislative researchers, this
may not be feasible. In some states, it may be possible to write a fiscal note for all bills that
receive a hearing. In others, setting a goal of writing a fiscal note for any bill that passes out of
committee is more realistic.


Updated when an adopted amendment may have fiscal impacts. Legislators often amend
bills during the legislative process, sometimes changing bill language significantly. These
changes may alter a bill’s fiscal impact, but states do not always update their fiscal notes.
Kansas goes so far as to explicitly exempt by statute amendments from fiscal note
requirements.25 Without updates, the notes may be useless to legislators considering a bill when
an amendment has altered the initial fiscal impact.
Some states require revised fiscal notes for amended bills. Texas, for example, requires that the
committee chair request an updated fiscal note any time a committee changes a bill (by
amending it or substituting a new bill).26 Similarly, North Carolina requires that a committee
that passes an amended bill with a fiscal impact must obtain a new fiscal note.27
To update fiscal notes when bills are amended, fiscal analysts need resources to act rapidly as
bills move through the legislative process. Oregon’s legislative fiscal office warns state agency
personnel that they ―may need to be prepared to respond quickly to [the fiscal office’s] requests
for revised fiscals on amended bills as this is [the office’s] highest priority, and often is work
that has less than a 24 hour turnaround.‖28
Fiscal notes written for earlier versions of a bill are useless to lawmakers if the bill’s fiscal
impact has been substantially altered. The best practice is to update fiscal notes when
amendments to bills are adopted that may have fiscal impacts, especially when those amended
bills are likely to advance in committee.

25

Kansas Statutes Annotated § KSA 75-3715a, ―Fiscal notes for certain legislative bills.‖

―Guide to Fiscal Notes: Instructions for Legislative Budget Board Staff,‖ Legislative Budget Board, February 2011,
http://www.lbb.state.tx.us/Fiscal_Notes/FNS_Instructions_for_Agencies.pdf.
26

27

North Carolina General Statutes§ GS 120-30.45, ―Fiscal Note on Legislation.‖

―2011 Legislative Session, Fiscal Impact Statements — Frequently Asked Questions,‖ Oregon Legislative Fiscal
Office, p. 2, http://www.leg.state.or.us/comm/lfo/2011_FIS/2011_FIS_FrequencyAskedQuestions.pdf.
28

10



Produced in a consistent format, following an established set of guidelines. If states lack
written guidelines and an established, consistent process for producing the notes, they will tend
to be inconsistent. Notes are produced by multiple analysts and often involve coordination
among analysts in numerous agencies and the legislature. Also, agency staff changes over time.
The agency primarily responsible for fiscal notes should produce a written set of guidelines and
provide training before each legislative session for agency personnel who provide background
data and analysis.
A few states produce excellent online guides that describe the details of a consistent process for
writing fiscal notes. The following guides are particularly thorough and can serve as a model for
other states:
Maine: Office of Fiscal and Program Review, The Fiscal Note Process: An Overview, February
2009.
http://www.maine.gov/legis/ofpr/other_publications/fiscalnote_process/overview124.pdf
Texas: Legislative Budget Board, Guide to Fiscal Notes, February 2011.
http://www.lbb.state.tx.us/Fiscal_Notes/FNS_Instructions_for_Agencies.pdf
Washington: Office of Financial Management, Legislative Fiscal Note Instructions, November
2011.
http://www.ofm.wa.gov/budget/instructions/other/legislativefiscalnoteinstructions.pdf
Wisconsin: Legislative Reference Bureau, 2011 Legislative Session Fiscal Estimate Manual,
November 2010.
http://legis.wisconsin.gov/lrb/pubs/ib/10ib1.pdf
Additionally, some states, including Minnesota, Texas, and Washington, have developed
computerized systems to allow analysts to share their work quickly and produce consistent
notes. Some states, including Texas and Washington, also provide staff with a fiscal note
―help desk‖ for questions. The help desk in Texas is available 24 hours a day, 7 days a week
during the legislative session.
Written guidelines, computerized systems, and help desks are useful tools for producing
consistent and useful fiscal notes. Developing these tools may require an initial investment, but
this investment is small in comparison to the large costs of building or maintaining new prisons.
States at least should produce guidelines for consistent note writing, and post them online.



Produced by a source that is trusted, non-partisan, and adequately resourced. If
lawmakers typically are skeptical of the accuracy of fiscal notes, they will tend to rely on them
less, making them useless for most bills. The more lawmakers respect fiscal notes, on the other
hand, the more valuable the notes become in the policymaking process. As a document on the
fiscal note process in Minnesota points out, ―Incomplete or inaccurately calculated fiscal notes
may be perceived by legislators as a lack of cooperation by an agency, . . . possibly fostering

11

mistrust in the process.‖29
A few states, including Illinois and West Virginia, allow executive branch agencies to produce
most fiscal notes with no oversight by non-partisan analysts working for agencies without
interests at stake in particular bills. Perhaps worse, in New York the bill’s legislative sponsor is
responsible for producing a fiscal note and may use any methodology and sources, a practice
that does not foster confidence in a fiscal note’s veracity.
Fiscal notes are most likely to be trusted if they are overseen by a team of independent analysts
working for the legislative branch, as happens in states including Colorado, Connecticut,
Oregon, and Texas. These analysts evaluate the methodology of state agency personnel and
request improvements as needed. As Oregon’s fiscal note oversight agency writes, independent
legislative analysts ―add . . . value to the fiscal impact process by ensuring accuracy, integrating
information from multiple agencies, challenging agency assumptions and offering different
points of view on fiscal analysis.‖30 Since these legislative analysts typically work for all members
of the legislature, regardless of party affiliation, they could be perceived as more independent
and unbiased than analysts working for an executive branch agency. Executive branch budget
offices could also be perceived as unbiased if they take steps to establish credibility, such as by
allowing a legislative audit of the fiscal note process.31
Notably, fiscal analysts, even those in relatively independent legislative agencies, may be
exposed to pressure from legislators to produce fiscal notes that would increase the chances of
a particular bill passing. States can take steps to diminish this kind of pressure while still
allowing legislators and others to supply information that can help analysts produce high-quality
fiscal notes. For example, Missouri requires by law that a legislator or lobbyist wishing to help
shape or appeal a fiscal note must communicate in writing with the agency responsible for fiscal
notes.
In general, the legislative staff overseeing fiscal notes will need to rely on budget experts within
the corrections department or other executive-branch departments when examining criminal
justice reform bills, since these experts typically are more familiar with their departments’
budgets and with the data sources necessary to estimating fiscal impacts. To produce consistent,
high-quality fiscal notes over time, these executive branch analysts will need training to play
their roles well. Texas’ Legislative Budget Board produces a fiscal note training guide
specifically for analysts in executive branch departments, conducts in-person trainings, and
posts an online video and slideshow for them to use.32 Similarly, Oregon’s Legislative Fiscal
―Fiscal Note Process,‖ Minnesota Department of Administration, Policy Number FMR-5D-01, February 4, 2000, p. 2,
available at http://www.admin.state.mn.us/fmr/documents/Policies%20&%20Procedures/Reporting/FMR-5D01%20Fiscal%20Note%20Process.pdf.
29

―2011 Legislative Session, Fiscal Impact Statements — Frequently Asked Questions,‖ Oregon Legislative Fiscal
Office, p. 2, http://www.leg.state.or.us/comm/lfo/2011_FIS/2011_FIS_FrequencyAskedQuestions.pdf.
30

In 2010, Kansas’ bipartisan Legislative Post Audit Committee, consisting of members of the legislature, conducted an
audit of the state’s fiscal note process, which is coordinated by the executive branch’s budget office. The audit found
that notes were generally accurate, but recommended some improvements. For the audit report, see
http://www.kansas.gov/postaudit/audits_perform/09pa01.pdf.
31

32

Texas’ training materials can be found at http://www.lbb.state.tx.us/Fiscal_Notes/Fiscal_Notes.htm.

12

Office posts training materials, including answers to a list of ―frequently asked questions‖ and a
slideshow.33
States cannot produce quality fiscal notes if they do not invest enough in professional staff,
assure they have the data they need to make good estimates, and build a system for producing
notes that allows this staff to deliver high-quality fiscal notes quickly. Producing accurate and
useful estimates of a large number of bills in a time-constrained legislative session is difficult,
and therefore requires resources. But investing in good fiscal notes is far less costly than
enacting or maintaining criminal justice policies that require more prison spending and weaken
a state’s economy and social fabric. The best practice is to make these resource investments.
B. Fiscal Notes Should Be Properly Researched
To be useful, fiscal notes should be properly researched. For example, notes should thoughtfully
estimate the fiscal impact several years into the future. Some criminal justice reforms that produce
substantial long-term savings require modest up-front costs. If states fail to consider the long-term
fiscal impact of legislation, they may miss the savings. Similarly, by omitting long-term impacts,
states risk enacting policies with unexpectedly high future costs that may unintentionally squeeze the
rest of the state’s budget later on. Notes should also determine the fiscal impact of legislation
relative to the cost of maintaining current policy. And, like all good analyses, notes should be
transparent about the methods and sources used.
To be properly researched, a fiscal note should:


Include an estimate of the savings, costs, or revenue gains, and avoid claiming an
indeterminate impact. To be useful, a fiscal note needs to indicate the magnitude of the fiscal
impact, even if the estimate is imprecise. Having an estimate, even if approximate, will allow
legislators to understand the possible or probable fiscal impacts of legislation.
Often, however, states produce notes claiming the impact cannot be determined. About 15
percent of the criminal justice fiscal notes states prepared in the last three years provided no
estimate of the budget impact, or indicated only whether it would be positive or negative. Most
of these notes did include at least some information that could help legislators get a limited
sense of the likely impact, but a few provided no information at all except that the impact was
unknown.
Indeterminate fiscal notes can be avoided. For example, Colorado enacted 29 adult sentencing
and corrections bills in the last three years and its final notes never reported being unable to
estimate the impact. This approach — to make a concrete estimate of every bill’s impact — is
the best practice.



33

In rare cases when an impact estimate is impossible, include a detailed explanation for
that conclusion. Fiscal notes that simply conclude a legislative proposal’s impact cannot be
determined, without any further explanation, leave lawmakers and other readers with no way to

Oregon’s training materials can be found at http://www.leg.state.or.us/comm/lfo/.

13

assess the accuracy of the note’s conclusion. Explaining why a budget impact estimate was
impossible improves the transparency of the process, increasing trust. It also allows the public
to assess whether the fiscal note author’s conclusion is justified.
These explanations also can help identify important data the state should be collecting but is
not or demonstrate whether agencies are cooperating by providing fiscal analysts the data
needed to produce an estimate. Understanding why fiscal impacts cannot be estimated can help
convince lawmakers to devote state resources to collecting more data or convince agencies to
institute rules and procedures that improve data collection.
Most states provide an explanation whenever they conclude the fiscal impact is indeterminate,
but some do not. Of 19 states that produced indeterminate fiscal notes for adult criminal justice
bills in the last three years, six sometimes or always failed to explain why. These six states are
Arizona, Arkansas, California, Indiana, Michigan, and New York.
The Texas fiscal note excerpted on the next page provides an example of the sort of
explanation states can provide.

14

Figure 1

TEXAS, HB 1205, Good Time Probation Credits, 2011

c-_~'--

••

J

••

.-u

'13fi n, Director, Legislative Budget Board

IN RE: HD1205 by Turner (Relating to the procedures for reducing or terminating community
supervision and the establishment of certain time credits through which a defendant's period
of community supervision is reduced.), As Engrossed

The probable fiscal impact of implementing the bill cannot be determined dne to the
unavailability of reliable data or information related to community supervision.
The bill would amend the Code of Criminal Procedure by establishing time credits for certain
defendants who have been granted community supervision for certain felonies. The bill specifies the
time credits eligible defendants may receive for particular behaviors, such as earning a degree, making
full payment of COLIrt costs and fines, and sllccessfully completing a treatment program. The bill would
require the supervision officer to report to the court when the defendant is entitled to one or more time
credits, and the court must then conduct a review of the defendant's community supervision history to
detennine if the defendant is entitled to a reduction or tennination of the community supervision term.
The bill would also provide that the COllit may order that a defendant's time credit may be forfeited
under celtain circumstances. The bill would also add the defendant's attorney to the list of people to
whom notiricatioll must be sent before reducing, tenninating, or conducting certain reviews of
community supervision cases as describe in Section 20(a), Article 42.12, Code of Criminal Procedure.
The bill may have a positive impact by creating an incentive for defendants to pay court costs and
tines and decreasing the amount ohime they are on community supervision. The bill may reduce the
amount paid in community supervision fees a~ a result of the reduction in the length of community
supervision. Additionally, the bill may increase the workload for community supervision personnel
and for courts.
Whether the bill would result in a significant amount of savings, or cost, to the State cannot be
determined due to a lack of statewide community supervision data in the following areas: I) a
repository of data on conditions of community supervision; 2) the program participation or completion
of programs by defendants on community supervision; and 3) data on fees paid to courts by
defendants on community supervision. The Office of Court Administration and the Texas Department
of Criminal Justice were unable to provide data that would help in providing an estimate of the cost or
savings from the bill.
The bill would take effect on September 1,20 I J and apply to persons placed on community
supervision on or after the effective date of the Act.

In rare cases where the impact is impossible to estimate, fiscal notes should include a detailed
explanation and describe the data that would be needed to produce an estimate.


Project the fiscal impact at least five years into the future. Prudent fiscal management
requires state lawmakers to consider the impact of proposed legislation on the state’s future
fiscal health, not just on the current or upcoming budget cycle.

15

Taking the long view is particularly essential for some highly cost-effective criminal justice
reforms with upfront costs. For example, in 2007 Texas faced a rapidly growing prison
population that the non-partisan Legislative Budget Board estimated would require at least $2
billion in new prison building by 2012. In response, the legislature enacted a reform plan that
required, in the first two years of enactment, $241 million in spending on treatment programs
and alternatives to prison for technical parole and probation violations. By reducing the need
for prison beds over the next five years, the reform package allowed the state to avoid the $2
billion in new prison spending.34
Despite the benefits of this practice, most states fail to write fiscal notes that examine the
impact beyond one or two years, reducing the chances that lawmakers will recognize the longterm fiscal benefits of enacting criminal justice reforms. Fifteen of the 29 states that produced
adult criminal justice fiscal notes showing significant fiscal consequences failed to estimate the
impact beyond two years, on average.
By contrast, five states, Louisiana, Minnesota, North Carolina, Texas, and Washington,
wrote fiscal notes that, on average, estimated the fiscal impact of adult criminal justice bills five
or more years into the future.


Analyze the impact against maintaining current policy. To be accurate, criminal justice
fiscal notes need to assess how a bill would affect a state’s finances and its prison population
relative to what will happen under current law. Without comparing against a baseline of doing nothing,
fiscal notes cannot determine accurately the fiscal and prison system impact of changing the
law.
For example, if states leave their existing pre-trial, sentencing, and parole laws in place, the
prison population likely will continue to grow. Relative to this baseline, reforms relying less on
incarceration can reduce prison populations and save states money.
In the example on the next page, a North Carolina fiscal note clearly shows how a bill would
increase the number of inmates in state prisons, relative to the baseline of current law.

―Justice Reinvestment in Texas: Assessing the Impact of the 2007 Justice Reinvestment Initiative,‖ Justice Center,
Council of State Governments April 2009. pp. 3, 5,
http://www.pewcenteronthestates.org/uploadedFiles/TX_Impact_Assessment_April_2009%284%29.pdf. Although
the 2007 reforms reduced the state’s then exploding prison population, its prison population has begun to rise in the last
year. See ―U.S. Correctional Population Declined for Second Consecutive Year,‖ Bureau of Justice Statistics, U.S.
Department of Justice, http://bjs.gov/content/pub/press/p10cpus10pr.cfm.
34

16

Figure 2

NORTH CAROLINA, SB 488, Establish Proportionate Sentence Lengths, 2009

June 30

June 30

June 30

June 30

June 30

2010

2011

2012

2013

2014

42,296

43,165

44.024

44,987

45,998

40,014

42,022

42,282

42,282

42,282

-2,282

-1,143

-1,742

-2,705

-3,716

NIA

J4

66

/2

(62)

14

66

12

(62)

I. Projected No. of Inmates Under
Current Stmctured Sentencing Act

2

2. Projected No. of Available Prison
Beds (DOC Expanded Capacity)

3. Projected No. of Beds Over/Under
Inmate I>opulation

4. Projecled No. ofAddilional
Inmates Due to tl,;,'i 8i11 J

5. No. ofAddilio"al Beds Needed
Each Fiscal Year Due 10 Ihis Bill NIA

POSITIONS: It is anticipated that by FY 2013-14, approximately 26 fewer positions would be needed to
under this bill. This position total includes security, program, and administrative ers nneJ.. . .'1 a r..'. l'ip Qf
"-':'Ira",; atel)' one employee for every 2.5 inmates. This ratio is t
;:.0-",:>1..; .•
tv
,"i:.th orj~ol)~".o ... o· .... :



Include a clear description of the methodology and assumptions. States can help protect
their fiscal health by requiring fiscal notes to be transparent about the assumptions and
methods used to estimate the impact. By insisting on such transparency, states will help assure
accurate estimates, improving the state’s ability to manage its finances well.
Most states always or usually described their assumptions or methods when they reported fiscal
impacts for adult criminal justice bills in the last three years. Colorado, Tennessee, Texas, and
Washington, for example, always included their assumptions or methods. Missouri establishes
in statute that notes written for bills that would affect the corrections department must include
this information.
A few states did poorly in this regard. For example, California failed to include information on
the assumptions or methods its analysts used for six of the ten bills they concluded would have
a significant fiscal impact. Maryland and Utah did not include this information for four of the
five bills with a significant impact, and Michigan left it out of all four of its relevant fiscal
notes.

17

In the example below, a fiscal note from Washington succinctly describes its assumptions.
Figure 3

WASHINGTON, SB 5866, Justice Reinvestment, 2011

EXPEI'iDlTURES
Assumptions
The adult jail and prison bed impacts for this bill were calculated under the following assumptions:
• Sentences arc based 011 Sentencing Guidelines Commission Fiscal Year 2010 adult felony sentencing
data, and assume no changes in crime rates, filings, pica agreement practices or sentencing volumes,
etc. (i.e., there will be an identical number ofscnlcnccs each year).
• Sentences are dislrinuted evenly by month.
• S~nlences are discounted by the nllio or senlt'nc~s to jailor prison admissions.
• Length of stay in jail is calculated using a ligure lor average eamed release, based on a survey of
local jails by the Sentencing Guidelines Commission, the Oflice of Community Development and
the Washington State Association orCoullties.
• Bed impacts are calculated without a phase-in factor because the bill is ef1ective immediately and
-.
not based on offense date.

--..----_"....to... . .

_--Jo--~-'-



Cite the information sources. To produce fiscal impact estimates, analysts must draw on a
range of data sources and studies. For example, analysts may need to draw on projections of the
state’s future prison population, data on arrest patterns for certain crimes, information from
other states on the impact of similar criminal justice policies, studies by the U.S. Department of
Justice, and other sources. For this crucial data, they will need to draw on the expertise of
budget experts and other staff in executive branch departments and local government agencies,
including law enforcement, courts, prosecutors, public defenders, or corrections, parole, and
probation departments.
If analysts do not disclose the sources they used in producing their analysis, it is more difficult
for others to assess the fiscal note’s accuracy. Including sources is a professional practice that
builds trust in the credibility of any research product, including fiscal notes.
Most states include information on the sources used in the adult corrections fiscal notes.
Colorado, Maryland, Tennessee, and Washington, for example, consistently included source
information. In fact, the vast majority of states writing fiscal notes included this information
most or all the time. A few states, though, did not. For example, Utah left it out of four of five
bills for which analysts found a significant impact, and Oregon left it out of three of four bills.
Arizona did not include it for either of the two bills for which analysts reported a significant
impact.

18

C. Fiscal Notes Should Be Detailed
Useful details are often crucial to lawmakers and others trying to understand the impact of
pending criminal justice bills, and may make the difference between a minimally helpful fiscal note
and a highly valuable one. A fiscal note providing only the total cost or savings is not particularly
useful. A good fiscal note should provide a breakdown of the fiscal impact of each major provision
of a bill and of the bill’s impact on various government agencies and revenue streams, including
impacts on local governments. This kind of ―disaggregated‖ information helps legislators make
better decisions. For example, it can help lawmakers understand what provisions of a bill they may
want to amend to bring down costs. Alternatively, it can help them understand the need to target
additional funds to agencies whose costs will increase if the legislation is enacted.
To be detailed, fiscal notes should:


Break down the impact of each major provision of the bill, and the impact on each
affected government agency or revenue source. In some cases, certain provisions of a bill
may produce costs, while others may produce savings. Breaking out the fiscal impact of each
major provision can help legislators understand the bill’s impact more clearly and better target
amendments to influence the bill’s fiscal impact.
Furthermore, changes in criminal justice policy affect a host of government functions under the
control of different government agencies — for example, the state’s prisons, law enforcement
agencies, courts, public defenders, attorney general, parole system, or probation programs. To
generate an accurate and thorough fiscal note, states need to consider a bill’s impact on all these
parts of their budget.35
Some states’ fiscal notes include the full impact of criminal justice legislation on various
government agencies. Washington, for example, typically breaks down the fiscal impact of bills
on each state agency directly affected by the legislation. This detail, as shown in the example
below, helps assure the note’s accuracy by making it easier for legislators, agency staff, and
others to understand and verify the estimated impact. It also helps legislators understand that
they may need to increase funding for the state agencies projected to bear the brunt of the cost
of a bill.

The expectation here is that fiscal notes will describe the bill’s direct impact on all parts of the budget, especially all
parts of the criminal justice system. The bill also may impact indirectly a broader range of government agencies, but fiscal
notes generally do not include such indirect impacts. For example, a bill that offers addiction treatment to people who
would go to prison under current law will reduce directly prison costs and increase directly treatment costs — impacts
that fiscal notes typically include. The bill conceivably may have additional, indirect impacts outside the criminal justice
system. Generally, fiscal notes avoid estimating these kinds of indirect effects unless they are readily supportable and
based in rigorous research, and even then they should be incorporated into the fiscal note with caution.
35

Estimating the direct effects of a bill on the criminal justice system may require analysts to make certain assumptions
about the impact of the bill on people’s behavior. For example, estimating the impact of bills that increase the
opportunities for prisoners to earn time off their sentence with good behavior will require analysts to estimate how many
prisoners will earn time off under a new set of incentives. The capacity to perform this sort of analysis is crucial to
writing good fiscal notes. States would do well to build statistical models based in rigorous research for analysts to use in
developing these estimates.

19

Figure 4

WASHINGTON, SB 6610, Mental Illness, Version 5, 2010

.........

Estimated Expenditures
A)1;enc)' Name

....

--..I

2009-11

-

'f

1

2011-13

GF-Stllte
FTEs
Totlll
FTE~
GF-Slale
Total
Non-7..cm hur indeterminate cost and/or fim..in2s. Please sec di~ussion.

AdministraliveOft1ce

.....
20B-IS
GF-Stak

rTE!>

Tutal

orlhe Court"
Oilice of Attorney

1

0

22>38

.1

0

44,476

1

0

44,416

.5

232,000

"'.IlOO

10

356,000

424,000

10

356,000

424,000

0

0

0

0

(jenera!
Depamnem of Social

imd H<:ahh Service'>

Non-zero but indetenninate cost and/or sa·...inl!s. Please see dis<:ussion.

Ocparlrnclll (If

Corre.:lions
rile I;vergreen

9,574

3

Slah~

9,574

0

5299.8121

111

0

Cullege

I
~nLGoy.

TOla11

OUI1S

..

*

0'

1

5241,5741

Non-zero but indetenninate cost. Please see diswssio

$356,000

I

$468,4761

111

$356,000

I

~,4761

W'

l;-.,... ".I'JI.'~:JIC Cj)~~"'l""'~t·""',J~

Notes should also break down the impact of the bill on the state general fund and any other
specific state funds. This information can help lawmakers produce a balanced general fund
budget, as nearly all states require, and properly manage spending from other state funds.36
Texas fiscal notes, as shown below, generally break down impacts on different state funds
when it is appropriate to do so.

36 State general funds are the portion of a state’s budget that are typically subject to annual appropriations. General funds
are typically supported by a state’s major general revenues, usually a state sales tax and a state income tax, that are not
targeted for a specific purpose. Typically, general funds provide most of a state’s corrections budget, as well as most
state funding for K-12 schools, universities, public health programs, and other public assistance programs. Other state
funds may not be subject to annual appropriations and usually are funded from sources that are specifically targeted to
that fund. For example, most state transportation funding is supported by a gasoline tax specifically targeted to particular
transportation-related services. Within corrections, states maintain a wide variety of funds. Texas, for example, maintains
a Judicial Fund that partially funds court-operating costs and is supported by certain court fees.

20

Figure 5

TEXAS, HB 4833, Judicial Districting and Veterans Courts, 2009

All Funds, Five-Year Impact:
Probable
Probable
Fiscal Year Savingsl(Cosl) from Savingsl(Cosl) frnm
General Revenue
Judicial Fund
Fllml
573
2010
2011
2012
2013
2014



1
($455,205)
($719,507)
($765,472)
($857.403)
($857.403)

Probable Revenue
Gain from

Judicial Fund
573

($711,837)
($909,476)

$443,750
$450,000

($1,017,761)
($1,159,331)

$525,000
$600,000
$600,000

($1,159,331)

Change in Number
ufSlatc Employees
from FY 2009

5.0
8.0
8.0
8.0
8.0

Break down estimates into one-time and recurring impacts. To understand a bill’s impact
clearly, lawmakers must understand which impacts are one-time and which are ongoing. For
example, developing a new system of parole or a drug treatment program may require one-time
investments that pay off with reduced, ongoing costs in the future. In most cases, a fiscal note
that does not distinguish between these types of expenses may leave lawmakers unable to
properly assess the bill’s value.
Most states produce fiscal notes that at least sometimes break out one-time costs from recurring
expenses. Idaho, Nebraska, and Pennsylvania, for example, included this distinction in all of
the adult criminal justice bills in the last three years that they determined had a significant fiscal
impact.



Include some indication of impacts on local governments. Most states usually do not
mention in criminal justice fiscal notes whether there may be an impact on local governments,
even though changes in state criminal laws can deeply affect local budgets.
Local governments typically fund police forces and local prosecutors, and often fund probation
and parole programs or public defenders. They also run county and city jails that house
individuals detained before trial, those incarcerated short-term for local violations, and often
state prisoners.
State legislatures have a responsibility to ensure that they and local governments are aware of
the fiscal implications for counties and cities of proposed changes to criminal justice laws. If
states unknowingly impose a significant fiscal strain on local governments, the resulting budget
problems likely will reverberate in ways that ultimately will damage the state budget. Conversely,
fiscal notes finding that proposed state legislation saves local governments money can build

21

support for the bill from counties and cities and increase the state’s overall fiscal health. If no
impact on local governments is expected, the fiscal note should say so.
Of 29 states that produced fiscal notes reporting a significant impact for the state, only 11
indicated an impact on local government in at least half the notes they wrote. Indiana,
Maryland, Oregon, Texas, Utah, and Washington did particularly well, indicating an impact
on local government every time or nearly every time. Colorado, by contrast, did not include
local government impact for 12 of the 14 bills that it reported would have significant fiscal
impacts, and Florida left it out of six in eight such bills.
In the example below, a fiscal note from Texas describes the impact on local governments.
Figure 6

TEXAS, HB 4833, Judicial Districting and Veterans Courts, 2009

Local Government Impact

The bill would authorize the commissioners court of a county to establish a vetcrans court
program. Harris and Travis Counties reported the costs to establish a program would be
significant; however, Williamson County reported no fiscal implication because it is
unlikely the county commissioners would authorize a program.
The Harris County Office of Budget and Management reported that to establish a
veterans court program on the docket of an existing court, would cost at least $2.65
million annually (the average cost of a county criminal court), and up to $3.85 million
annually (the average cost of a criminal district court). It is likely the costs would be
greater than this because the program described in the bill would have the court taking on
certain responsibilities of one of the county probate courts, such as decisions regarding
competency to stand trial, civil, or forensic commitment to the state hospital system, etc.
Harris County also stated the county's best estimate is that dedicating a district or
criminal court to a veterans court program as required by the provisions of the bill would
cost Harris County an estimated $3.25 to $4.25 million annually.
Travis County reported that without veteran specific data, the county can only extrapolate
from other programs. For example, Travis County reports its drug court costs would be
$774,790 in fiscal year 2008 (information taken from the Travis County fiscal year 2009
budget). This program screened around 3,000 potential participants in a program with a
static capacity of300.
Williamson County reported for felony cases, there would be no fiscal impact on the
county budgct because thc District Anomcy's Officc would not seck to establish such a
program in Williamson County.

22

Include impacts on prison and jail populations. Much of the fiscal impact of criminal justice
legislation results from the effect of these bills on a state’s incarcerated population. It is expensive
to incarcerate people for long periods of time, so bills that increase or reduce the number of
people in prison can have significant fiscal implications for a state.
To explain their estimates, then, fiscal notes often need to describe their assumptions about the
legislation’s impact on the state’s prison and jail populations. Without this information, the fiscal
note’s accuracy will be difficult for readers to assess.
Moreover, the impact of legislation on a state’s prison population is important regardless of the
bill’s fiscal effects. Incarcerating people has economic and social ramifications that are important
to a state’s quality of life and to its future. By allowing people who pose little threat to public
safety to remain in the workforce and with their children, criminal justice reforms can boost a
state’s economic health and strengthen its social fabric. By including an estimate of the bill’s
impact on the number of people in prison, fiscal notes can help legislators and the public assess
the bill within this broader context.
The Michigan fiscal note excerpted below provides an example of a state including useful
information about a bill’s impact on the state’s prison population.
Figure 7

MICHIGAN, HB 4538, Special Alternative Incarceration, 2010

FISCAL IMPACT
As of June 18, 20 I0, there were 196 prisoners (171 men, 25 women) and 150
probationers (127 men, 23 women) in the SAl program, for a total program population of
346. If the September 30, 2010 sunset provision is not eliminated, the facility would no
longer be authorized to house offenders sentenced to prison, although the facility would
be able to continue to serve probationers. Prisoners not served in SAl would likely be
sent to another MDOC facility to !\erve out at least their minimum sentence. Thus, the
regular prison population would increase, as would the length of stay of these prisoners.
who currently participate for 90 days in the SAl program.
A February I, 2010 prisoner population projection analysis submitted by the Department
of Corrections projects that if prisoner placements in the SAl program were to cease as of
October 1,20 I0, it would result in an additional 1,285 occupied prison beds by the end of
FY 20 I0-11. In the long run, the prison population is estimated to stabilize with roughly
1,621 additional beds occupied.

Analysis availahle at http://www.legislature.mi.gov

Page 1 of2

23

D. Fiscal Notes Should Be Accessible
For fiscal notes to be maximally useful in improving state decision-making, they should be as
transparent and usable as possible for lawmakers, legislative and agency staff, advocates, the media,
and the public. No one can rely on or assess the accuracy of notes that are inaccessible.
To be accessible, fiscal notes should:


Be easily available on the state legislature’s website. If fiscal notes are not easily available
online, anyone interested will have a harder time locating the notes, relying on them, and
verifying their information.
Most states put their fiscal notes on the Internet. But seven do not. Two of these states,
Delaware and Hawaii, do not produce fiscal notes or only produce notes for bills with a
revenue impact. The other five, Arkansas, Georgia, Massachusetts, Mississippi, and Rhode
Island, produce notes for some spending bills but do not make them available online.
States can greatly improve the transparency and accessibility of their fiscal notes by regularly
making them available and easy to find on the state legislature’s website.



Contain basic information about the bill, including bill number and version, sponsor(s),
and summary. Fiscal notes that do not include a bill’s number or version create confusion.
Legislators voting on a bill may not know if the note was performed on the bill when it was
introduced or on the version of the bill up for a vote. This basic information provides clarity
and a useful context for readers. All the states in our analysis included the bill number on every
fiscal note.
A summary of the relevant bill provisions is also useful. It provides context for readers to make
sense of a fiscal note’s findings. It can also be helpful for fiscal notes to include the names of
the bill’s sponsor or sponsors. Readers wishing to comment on a fiscal note may wish to
contact the bill’s sponsor to discuss the issue. Nearly all states always included a summary of the
relevant provisions, and most states identified the bill’s sponsor or sponsors.



Include contact information for the lead analyst. If a sponsor, legislator, advocate, or
member of the public has a question about the fiscal note or its methodology, he or she should
know how to contact the author of the note. Providing this information improves the
transparency of the note, and makes it easier to direct questions, and to challenge inaccuracies.
States are already doing well in this area. Every fiscal note in our review that found a fiscal
impact included contact information for the responsible analyst. Washington’s fiscal notes
even included the name and contact information for every analyst involved in producing the
note.

24

Conclusion
Many states have not implemented rigorous methods for providing legislators the information
they need about how criminal justice policy changes can affect their budgets. As a result, legislatures
are less likely to enact reforms that might offer cost savings and broader benefits for a state’s
economic and social health, and they may be more likely to enact costly policies of questionable
merit. With states struggling to restore or sustain funding for schools and other public necessities,
they cannot afford to miss opportunities to simultaneously improve public policy and save money.
And even when state budgets improve, states should, as a matter of sound policy practice, evaluate
carefully the fiscal impact of policies they consider.
Drawing on the best practices described in this report, states can improve their fiscal notes, giving
legislators, advocates, the public, and the media more useful information about a bill’s fiscal impact.
These improvements will help states enact more rational and effective criminal justice policy and
invest their limited resources wisely.

25

APPENDIX: 50 State Comparisons of Best Practices

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina

26

Four Criteria:
Number of
significant
adult
corrections
bills enacted1
19
0
10
14
25
30
5
12
18
9
11
10
7
14
3
11
12
55
8
24
3
10
5
10
2
8
8
15
17
4
11
11
22
7
1
13
16
7
15
6

Consistent2
Number of
bills with
fiscal notes3
7
0
10
1
23
29
5
0
17
0
0
10
0
13
1
3
9
29
7
24
0
7
3
0
2
6
7
9
0
0
5
9
7
2
1
6
15
6
0
0

Properly Researched4
Includes
estimate of
savings, cost,
or revenue
gain
4
0
9
0
20
29
5
0
17
0
0
9
0
12
1
3
9
15
7
24
0
5
3
0
2
6
7
9
0
0
5
8
5
1
1
5
13
6
0
0

Claims
indeterminate
impact
3
0
1
1
3
0
0
0
0
0
0
1
0
1
0
0
0
14
0
0
0
2
0
0
0
0
0
0
0
0
0
1
2
1
0
1
2
0
0
0

Includes
explanation for
indeterminate
impact
1/3
0/0
0/1
0/1
1/3
0/0
0/0
0/0
0/0
0/0
0/0
1/1
0/0
0/1
0/0
0/0
0/0
14/14
0/0
0/0
0/0
0/2
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/1
2/2
0/1
0/0
1/1
2/2
0/0
0/0
0/0

Average
years
projected
1.0
0
2.0
0
1.5
3.3
2.0
0
1.4
0
0
2.0
0
1.0
0
1.0
2.3
5.0
4.0
4.0
0
1.0
5.0
0
0
4.0
1.8
3.3
0
0
0
0
6.0
4.0
2.0
1.0
2.3
2.0
0
0

Detailed6
Impact not
"minimal"
or "zero"5
2
0
2
0
10
14
2
0
8
0
0
3
0
7
0
1
6
4
1
5
0
4
1
0
0
1
4
6
0
0
0
0
4
1
1
1
4
3
0
0

Describes
methodology
1/2
-0/2
-4/10
14/14
1/2
-6/8
--3/3
-5/7
-1/1
4/6
4/4
0/1
1/5
-0/4
1/1
--1/1
3/4
3/6
----4/4
1/1
1/1
0/1
1/4
2/3
---

Cites
sources
1/2
-0/2
-7/10
14/14
1/2
-6/8
--2/3
-7/7
-1/1
5/6
4/4
0/1
5/5
-2/4
1/1
--1/1
4/4
3/6
----4/4
1/1
1/1
0/1
1/4
3/3
---

Breaks down
one-time and
recurring costs
0/2
-1/2
-4/10
9/14
1/2
-4/8
--3/3
-3/7
-1/1
3/6
3/4
0/1
2/5
-0/4
1/1
--1/1
4/4
4/6
----3/4
0/1
1/1
1/1
2/4
3/3
---

Includes
impact on
local
government
1/2
-0/2
-6/10
2/14
1/2
-2/8
--0/3
-6/7
-0/1
1/6
0/4
0/1
5/5
-1/4
1/1
--0/1
1/4
3/6
----0/4
1/1
1/1
0/1
4/4
0/3
---

Accessible
Includes
summary
of bill
2/2
-2/2
-10/10
14/14
2/2
-8/8
--3/3
-7/7
-1/1
6/6
4/4
1/1
5/5
-4/4
1/1
--1/1
4/4
4/6
----4/4
1/1
1/1
1/1
4/4
3/3
---

Includes
bill
number
2/2
-2/2
-9/10
14/14
2/2
-8/8
--3/3
-7/7
-1/1
6/6
4/4
1/1
5/5
-4/4
1/1
--1/1
4/4
6/6
----4/4
0/1
1/1
1/1
4/4
3/3
---

Contact Info
for lead
analyst
2/2
-2/2
-9/10
14/14
2/2
-8/8
--3/3
-7/7
-1/1
6/6
4/4
1/1
5/5
-4/4
1/1
--1/1
4/4
6/6
----4/4
0/1
1/1
1/1
4/4
3/3
---

Available on
internet7
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes

Four Criteria:
Number of
significant
adult
corrections
bills enacted1

Consistent2

South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total

Properly Researched4

Detailed6

Number of
fiscal notes
written3

Includes
estimate of
savings, cost,
or revenue
gain

Claims
indeterminate
impact

Includes
explanation for
indeterminate
impact

Average
years
projected

Impact not
"minimal"
or "zero"5

Describes
methodology

3
19
25
18
8
23
17
10
3
2

0
17
21
17
0
16
14
1
2
2

0
17
19
17
0
13
11
1
0
0

0
0
2
0
0
3
3
0
2
2

0/0
0/0
2/2
0/0
0/0
3/3
3/3
0/0
2/2
2/2

0
1.0
5.0
2.6
0
1.0
6.0
0
0
0

0
6
4
5
0
1
6
0
0
0

-6/6
4/4
1/5
-1/1
6/6
----

616

363

310

53

2.7

115

Accessible

Cites
sources

Breaks down
one-time and
recurring costs

Includes
impact on
local
government

Includes
summary
of bill

Includes
bill
number

Contact info
for lead
analyst

Available on
internet7

-6/6
3/4
1/5
-1/1
6/6
----

-3/6
1/4
4/5
-0/1
2/6
----

-1/6
4/4
5/5
-0/1
5/6
----

-6/6
4/4
1/5
-1/1
6/6
----

-6/6
4/4
5/5
-1/1
6/6
----

-6/6
4/4
5/5
-1/1
6/6
----

Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
43 "Yes"

This appendix reviews all fiscal notes locatable for bills identified as ―significant state sentencing and corrections legislation‖ enacted in each state in the 2009, 2010, and 2011 legislative sessions as compiled by the National Conference of State
Legislatures. It can be found at http://www.ncsl.org/?TabId=20763. This database does not include bills that were proposed but not enacted and does not include any fiscal notes from Alaska. That state did not enact any significant adult criminal justice
bills in the last three years, according to the database.
1

We were unable to count the number of states that meet the other three best practices criteria under "Consistent" (These three are that notes should be updated when an adopted amendment may have fiscal impacts, based on an established set of
guidelines, and produced by a source that is trusted, non-partisan, and adequately resourced). The data necessary to include these criteria here were not available online and would require a comprehensive survey of state officials, something beyond the
scope of this report.
2

3

In a small number of cases, states may have produced fiscal notes for the bills in question, but we were unable to locate them online or through in-state contacts.

4

We were unable to count the number of states that analyze the impact based on the effects of maintaining current policy.

The figure in this column (the number of notes finding an impact that is more than minimal) is the denominator for all the best practices to the right of this column because fiscal notes that find a significant impact by definition contain some kind of
estimate of that impact, making it clearly relevant for the notes to describe the methodology used, cite sources, and include useful details such as the impact on local governments. While fiscal notes finding ―minimal‖ or ―zero‖ impact may in some cases
also need to describe the methodology and sources they used, at other times the bill’s minimal or zero impact will be self-evident; therefore, these details will be unnecessary. As such, for the ―properly researched‖ and ―detailed‖ best practices to the right
of this column, we evaluated only the notes for bills that had a significant impact. Having chosen to evaluate in detail this subset of notes, we examined this same subset of notes to determine how often states met the ―accessible‖ best practices.
Nevertheless, all fiscal notes should meet the best practices for accessibility.
5

We were unable to count the number of states that meet the other two best practices criteria under "Detailed" (These two are that notes should break down the impact of each major provision and the impact by agency and revenue source, and that
states should include impacts on prison or jail populations).
6

7

In the best practices criteria, we encourage states to place their fiscal notes on the state legislature's website. Most do, but here we assess whether the notes are accessible anywhere on the Internet.

27

Acknowledgements
The authors wish to thank research assistants Zoë Bunnell, Christine Mai, Frank Mamo, Jon Martin,
Geoff Schotter, Hayley Smith, and Alex Stephenson.
Thanks also to: Noah Berger, David Blatt, Amy Blouin, Kate Brewster, Nicole Bucheri, Brenna
Burch, Andrew Cannon, Michael Cassidy, Paul Cillo, Mark Cooke, Anna Dey, Alan Essig, Anika
Fassia, Rebecca Gasca, Melissa Goemann, Sondra Goldshein, Vanita Gupta, Carol Hedges, Jake
Horowitz, Rich Huddleston, Nick Johnson, Larry Joseph, Alison Lawrence, Marine Lowe,
Representative Jerry Madden, Nan Madden, Will Mathews, Frank Mauro, Karen McLaughlin,
Melissa Merrill, Andrea Meyer, Professor John Mikesell, Rachel Myers, Andy Nicholas, Jean Ross,
Matt Simpson, Alexandra Sirota, Ed Sivak, Joy Smolnisky, Becky Straus, Michael Streepey, Chandra
Kring Villenueva, and Shelli Weisberg.

28