Behind Bars: The Economic Incentive to Incarcerate in Rural Kentucky

For decades in Kentucky and throughout the United States, it has been a commonly held notion that incarceration is predominantly an urban phenomenon. And up until recent years, Kentucky’s urban areas were indeed at the focal point of that phenomenon, incarcerating the largest proportions of their citizens. However, that pattern has altered today, and oddly enough, Kentucky’s rural areas have the highest incarceration rates. How come though?

To properly examine the need for the restoration of voting rights for former felons in Kentucky, it is important to first understand the long-running structures that incentivize and perpetuate incarceration in the state, particularly in its rural communities. 

Is There an Economic Incentive Behind High Rates of Incarceration in Rural Kentucky?

According to a 2015 report by the Vera Institute, the top ten highest rates of jail and prison admissions in the state were found in rural counties, with Grayson County in the central part of the state having the highest rate of jail admissions and Bell County in the southeast having the highest rate of prison admissions. In addition, pretrial detention has continued to increase in rural Kentucky counties throughout the years, with the state’s 85 rural counties seeing a 66% increase in pretrial incarceration in 2015. 

Source: The Vera Institute

Many will point to increasing homicide rates and the drug epidemic in the state as an explanation for the uptick in rural incarceration, and such factors have undoubtedly contributed. However, behind the prevalence of crime and drug use in rural Kentucky communities, is there an ulterior motive for struggling rural local governments to incarcerate? 

Kentucky is unique in that it is one of two states in the U.S. that incarcerates a sizable portion of its state inmates in rural county jails. This began in the 1980s when the “War on Drugs” and the harsher penalties that came with it filled state prisons throughout the nation. To address the growing number of inmates in prisons and the class action lawsuits that ensued as a result of overcrowding, the Kentucky Department of Corrections (DOC) established a policy to limit capacity in state prisons, which was undoubtedly the more ethical decision. Still, though, felony sentences during this period continued to grow, leaving the DOC with limited options to house their state inmates. They soon implemented a “controlled intake process,” where excess inmates awaiting transfer to a state facility were housed in the county jail until a spot in the state prison opened.

When the controlled intake process began in the 1980s, the state initially did not pay county governments for housing the inmates. In 1987, though, after years of overcrowding in county jails and significant strain on local budgets, a county government filed a lawsuit against the state demanding reimbursement for their services to allow for better living conditions. In the case of Campbell County v. Commonwealth, the court held that the state is required to pay counties for holding state inmates. But most notably, the court held that though state inmates who committed a felony have the right to custody and care under the state constitution, they do not necessarily have to do their time in state prison. 

Since then, the state pays county jails “per diem” fees to house state prisoners, and many rural local governments under financial hardship take full advantage of this opportunity. These payments cover the cost of food and medical expenses per day for the state prisoner; the average totaling $35.43 per prisoner per day. This is significantly less than what it would cost the state to house the same inmates in a state facility, which in 2021 was an average of $97.60. Thus, the state saves money by utilizing county jails to house state prisoners, and struggling rural county governments make some extra revenue to help keep other parts of the local budget afloat.

To make matters worse, recent population shifts from rural to urban parts of the state have increased rural county governments’ dependency on the state’s per diem fees, as they now have very few other sources to generate tax revenue. Some rural counties receive up to 86% of their jail revenue to house people for the state Department of Corrections. Other county jails also enter into agreements with ICE or U.S. Marshals to house inmates in federal custody, which has a significantly higher per diem payment than what the state pays. Counties that accept federal inmates receive up to 60% of their jail revenue to house people for the federal government. Therefore, rural county governments have a greater financial incentive now than ever to incarcerate. 

Many county jails intentionally overcrowd their inmates to save money or make a profit. For instance, a county jail may house two or more people in a space designed for one, creating inhumane  living conditions for inmates. In addition, some county jails have begun to disproportionately expand their facilities beyond what is needed for the size of the county to specifically hold more state and federal inmates. This only increases rural county governments’ reliance on state and federal payments for incarceration, as they need to pay off the debt to construct larger facilities.

Another reason rural county governments have a financial incentive to incarcerate is that they also make a considerable share of their revenue from various fees incurred by inmates. Such fees include a booking fee once an arrested person arrives at the jail and a daily room and board fee for individuals being held pretrial or serving a misdemeanor sentence. Jails also charge inmates for phone calls and video visits, in addition to non-cafeteria food items and e-cigarettes, which in 2018 brought in $1.3 million for nearly two-thirds of the state’s jails.

Potential Policy Solutions

According to a 2019 report by the Vera Institute, Kentucky ranks sixth worst in the nation concerning jail admission rates, pretrial incarceration rates, and prison population rates. The state also ranks the worst in a region of seven other states. Policy changes are long overdue in the state to disincentivize mass incarceration and rural county jails’ economic reliance on it.

Currently, in Kentucky, it seems the only change being pursued to address the number of those detained and the overcrowding of rural county jails is to expand and add more and more beds. To address this issue, the state needs to expand its COVID-19 administrative release program for those in jail awaiting trial. This temporary program demonstrated how releasing those awaiting trial does not significantly impact public safety. It can also help alleviate the financial burden county jails must bear to house pretrial inmates. It would also reduce the number of those detained if the state limited the number of offenses for which a money bond could be set, as rural county jails currently house a large number of impoverished inmates who could otherwise be released if they could afford bail.

Though policy changes are needed to discourage county jails’ economic dependence on incarceration, the state also needs to fundamentally address the policies and practices that send people to jail in the first place. Certain felonies, including drug possession and possession of a forged instrument, should be reduced to misdemeanors, which would reduce the number of people in state custody while also relieving overcrowding in rural county jails. And similarly, certain misdemeanor offenses need to be decriminalized or reduced to prepayable violations, which would also reduce arrests. Such misdemeanors could include criminal littering, possession of drug paraphernalia, disorderly conduct in the 2nd degree, and public intoxication, among others.

While these options would undoubtedly reduce incarceration and jail overcrowding, county governments would surely suffer a financial loss as a result. State policy changes to soften sentencing are, oddly enough, something many municipalities are pushing against, making it difficult for state officials to enact meaningful reforms. For many counties in eastern Kentucky facing tax revenue losses from coal production declines and in other rural parts of the state failing to remain financially afloat, the reduction in incarceration could mean financial devastation for their local governments. This only demonstrates how the lack of economic development and population shifts to urban areas has created total economic desperation in Kentucky’s rural communities, for which the state lacks a concrete plan.

Considering the clear financial incentives that fuel rural incarceration in the state, the wrongness of denying the right to vote to former felons becomes even more evident. Setting political differences aside, there are clear economic and societal incentives for scaling back on mass incarceration. Perhaps in pursuing such measures, the Commonwealth of Kentucky can be viewed as the flagship state in the country. However, these ambitions can only be matched through bi-partisan support. 

Published by Julia Mattingly

Julia is co-founder of the Louisville Political Review. She is Senior who specializes in rural issues, health policy, and economics.

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