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New York’s Innovative Solution to Crime: Betting on Success

New York City Mayor Michael Bloomberg recently announced a new initiative that could save government money, decrease the crime rate and strengthen urban communities.

  • Inimai M. Chettiar
August 21, 2012

Crossposted at The Huffington Post

New York City Mayor Michael Bloomberg recently announced a new initiative that could save government money, decrease the crime rate and strengthen urban communities. Global investment bank Goldman Sachs will invest $10 million in a program to reduce recidivism among released adolescent prisoners at Riker’s Island. This will make the city the first in the nation to adopt a social impact bond model, which uses private resources to improve social outcomes, and a pioneer in realigning the financial incentives of the prison system.

For-profit reentry programs like the Goldman model lead companies to bet on people staying out of prison, instead of staying in them. Under this model, Goldman only breaks even—or makes a profit—if the program reduces incarceration rates and helps young men reintegrate into their communities. This model is also designed to save the city money. Other states and cities should look to this approach as a more sensible way to fund their justice systems and close their budget gaps.

Studies have shown that improving reentry opportunities, which means giving released prisoners educational, employment and housing opportunities, and family stability, greatly reduces crime rates. When we fail to invest in these key components, we guarantee the costliest result: hopeless and penniless people returning to crime, and then punishment. Increased crime is a negative outcome not only for the affected communities, but also for all of us.

Misguided attempts to save a quick buck have left us with a costly prison complex that incarcerates more people than any other country in the world. The United States spends $70 billion annually to lock up over 2.3 million people. Across the country, states are cutting funding for courts and public defenders, and raising the fees and fines charged criminal defendants in order to close budget gaps. Some states have even tried to charge prisoners for visits, and serve just two meals per day instead of three.

The real way to save criminal justice costs is to reduce unnecessary incarceration. Some states have taken on this tactic by reducing the unnecessary use of pre-trial detention, paroling people who do not need to be locked up, and using non-incarceration sanctions for low-level crimes. The Goldman model should—we hope—create an investment in treatment and reentry programs that rehabilitate prisoners and help them obtain jobs and educational opportunities—instead of winding up back in prison due to insurmountable obstacles.

Other states and cities can look to this approach from the city as one way to close their budget gaps: raising short-term capital to improve communities and generate long-term savings. As the city rolls out this program, we hope it will be mindful of obvious risks. The program should be closely and periodically monitored and evaluated to ensure the city is not overpaying for very limited, if any, positive outcomes. And just as the city’s repayment to Goldman is based on whether its program reduces recidivism, governments across the country should condition funding all prisons and correctional programs (public and private) on whether they achieve the goals of reintegration and reduced recidivism. Re-aligning the incentives of our corrections departments is the only true way toward achieving a system of justice that is worthy of that name.

This post was coauthored with Bruce Reilly. Reilly is a former intern for the Brennan Center’s justice program and a current student at Tulane University Law School.