Saving Taxpayer Dollars

One of the greatest social benefits for implementing evidence-based programs (EBPs) for at-risk youth is the cost-savings presented to taxpayers. As noted by the Annie E. Casey Foundation, in some places, the average cost to operate a detention bed exceeds $70,000 annually, and experts estimate that the cost of building, financing and operating a single bed over 20 years is approximately $1.5 million. EBPs are sufficiently less than out-of-home placement and can save an average of $30,000 per youth per year when utilized as an alternative to placement.

This image demonstrates the savings experienced by Florida's Redirection project, a project funded from 2004 - 2013.

Cumulative Savings for Redirection Project

Evidence-Based Associates (EBA) worked with the state of Florida from 2004 - 2013 to develop a sustainable model in which EBPs were provided statewide and resulted in millions of dollars in savings. This project was known as the Redirection project and focused on redirecting youth away from ineffective, out-of-home placement, as well as redirecting budgetary resources away from juvenile facilities and to proven, more effective programs that turn youth around and produce positive results.

This innovative, award-winning project for offending youth offered a solution that was singled out for praise by citizen advocacy groups such as TaxWatch and the Southern Poverty Law Center. Dominic M. Calabro, president and CEO of Florida TaxWatch was quoted as saying, "Redirection will not only save the taxpayers tens of millions of dollars but will improve outcomes for children and families while strengthening and protecting the workforce of tomorrow."

The Redirection project consistently reduced felony adjudications and commitment in the adult system while at the same time demonstrating cost-savings to the state of more than $51 million in the first four years of operation. The project was evaluated each year by the Office of Program Policy Analysis and Government Accountability (OPPAGA) and received legislative reauthorization annually based on its positive results. View an OPPAGA report on Redirection's cost-saving benefit.

As of 2013, the project had achieved more than $170 million in cost savings for the state since it began due to its lower operating costs compared to residential delinquency programs (Justice Research Center, 2012). Following is an example of how these cost savings were obtained.

Immediate Savings

Based on Florida's documented out-of-home placement rate of a little more than $40,000 per youth, the following scenario for 'redirecting' 1,000 youth per year from placement to community-based, evidence-based services is feasible:

Immediate Savings
Based on a cost-analysis report by the Justice Research Center, Florida currently pays approximately:

$40K: average rate for completion of residential service
$10K: rate per successful completion in Redirection

1,000 youth x $30K (difference between residential and Redirection) = $30 million savings upon completion of the program

Improved success rate:
Lowering the recidivism rate by 10 percent = 100 fewer youth re-adjudicated

Future savings due to improved success:
Future placement reduction of 100 youth x $40K/youth = additional $4 million in savings

Total lower-end savings for 1,000 youth contract:
$34 million total or $34,000 savings per youth served over and above the cost of the services

Even by demonstrating cost-saving formulas, it's imperative that state leaders close juvenile beds to achieve the true savings that benefit taxpayers and benefit from the optimal value for society.

Another means of demonstrating the value of evidence-based programs to taxpayers is through social impact bonds or pay-for-success contracts. Social impact bonds/pay-for-success contracts would allow states to clearly identify savings in both the juvenile and adult systems (short- and long-term) and hold innovative contractors accountable for results. This is a relatively new area of financing for the social sector but one that looks extremely promising and that has already been vetted by our federal government.

Providing evidence-based programs within the juvenile justice system is not only a wise investment for our nation's at-risk youth, but may also constitute the most effective, long-term solution to adult criminality, prison overcrowding, concerns about public safety and inefficient use of precious state resources and ultimately taxpayer dollars.