· The Office of National Drug Control Policy states that the average annual cost of incarceration for a state inmate is $20,142, while the average annual cost of treatment is approximately $3,000. Diverting non-violent drug offenders into treatment programs can allow states to reduce demand for prison beds, delay the construction of new prisons and reduce the number of inmates released to state parole supervision. These immediate benefits will provide opportunities for fiscal savings in state and county prison operations, prison construction, parole operations, and prosecution costs.

· Initial results from the implementation of Proposition 200 in Arizona, which mandates drug treatment in lieu of prison for first- and second-time non-violent drug offenders, show that the state netted more than $2.5 million in savings the first fiscal year of the program by diverting 551 offenders into treatment who otherwise would have gone to prison for an average of six months. (Source: National Drug Strategy Network, "Proposition 200 Working, Saving Money, Says Arizona Supreme Court,"1999.) According to an evaluation by the Arizona Supreme Court, the state saved about $50.25 per day in prison costs for every probationer, amounting to savings of more than $5 million. As more offenders are diverted into treatment, the state expects to see increased fiscal savings.

· California anticipates that Proposition 36, a ballot initiative that requires certain non-violent drug offenders to enter treatment instead of prison, will have similar effects on its budget. The state expects to save $1.5 billion over five years. The measure is much broader than the Arizona law; the state expects nearly 36,000 offenders to be diverted to treatment each year. According to the California Legislative Analyst's Office (LAO), the state expects to save $200 million to $250 million annually in prison costs and $40 million in county jail costs by diverting non-violent drug offenders to probation with treatment. The state also will save $450 million to $500 million in prison construction costs as the need for new prisons diminishes. The state parole system will save $25 million because the diversion of offenders will mean fewer will eventually be released into the parole system.