Lawmakers urged to rein in prison costs that put ‘backdoor tax’ on inmates’ families

When state prisons mark up commissary items and charge higher prices, the revenue it receives covers anything from storage and delivery of those goods to staff salaries and substance abuse programs.

Nevada Department of Corrections Director James Dzurenda told lawmakers in April that in most states, like Connecticut and New York where he’s previously ran corrections programs, those costs are passed on to the taxpayers.

In Nevada, those incarcerated and their families have been picking up the costs. 

Nick Shepack, the Nevada State Deputy Director for the Fines and Fees Justice Center, said instead of using the general fund to pay for prison costs the state has created a “backdoor tax put directly on the families of the incarcerated.”

“It comes down to the question of who pays for our criminal justice system,” Shepack said. “We rely on incarceration as our corrections and as an essential government service. Yet a small portion of Nevadans, the families who have done nothing wrong except love someone who is incarcerated, are paying for these positions and charged exorbitant amounts of money.” 

Lawmakers are looking to rectify the high costs associated with incarceration and come to grips with the fact that some of the inflated prison costs are the result of the state underfunding the system. 

“The impression I get is that you’ve developed some internal mechanism to make up for the failure of the Nevada legislature to properly fund the Department of Corrections,” said Republican state Sen. Ira Hansen. 

Senate Bill 416, referred to as the cost of incarceration bill, caps commissary markups at 5%, prevents the department from charging for room and board for inmates who work, and eliminates medical copay or “man down” fees, when those incarcerated require emergency medical services.

The legislation would also discharge medical debt that resulted from accidents and self harm. 

The bill passed out of committee seven to one April 14, with Republican state Sen. Jeff Stone the lone opposition.

In an interview, Shepack said he expects the bill to be scaled back to account for the department estimate that, if implemented, it would cost $12 million over the biennium.

While he said the bill asks for a lot and acknowledged “reforming all of it at once might not be possible,” he still thinks lawmakers should mull the possibility of shifting all costs to the general fund.  

“The department will be able to function significantly better if its revenue streams are fully stable, and understand exactly how much money it will have every year,” Shepack said. “It also says the state has a stake in the successful reentry of incarcerated individuals.”

Revenue model

A state audit in 2022 found prisons were marking up prices for commissary goods by more than 40%.

During the interim Legislative Judiciary Committee, chaired by Democratic Sen. Melanie Scheible, lawmakers proposed reining in some of those markups. 

“One of the consistent themes was that being incarcerated is expensive,” said Scheible, who presented SB 416. 

While Scheible said they aren’t going to “pretend we are going to get a $12 million allocation,” the bill, she said, is a vehicle to at least start the discussion about how the Department of Corrections is using a revenue model that imposes costs on incarcerated people and their families. 

“We pick on the Department of Corrections a lot, but sometimes there are problems that we as a legislature have to solve,” she said. 

Dzurenda, who testified that his department is neutral on the legislation, said he had some concerns about the language but would work with the Fines and Fees Justice Center to amend language that addresses those issues. 

His concerns ranged from practical implementation to who picks up the costs associated with the bill. 

Under Dzurenda, who served under former Republican Gov. Brian Sandoval and recently returned under Gov. Joe Lombardo, the department has made some changes designed to bring down some commissary costs.

Recently, the department ended markups on hygiene items.

The 2022 audit found that while the vendor price for a box of Playtex tampons costs NDOC $6.08, NDOC sold it for $10.13. Midol, which costs the department $4.70 for a box with 16 tablets, was being sold at $7.83.

While the department does provide some hygiene items for free for those it deems indigent, products can be lower quality. 

“Some of those items, especially the feminine napkins, are probably not even ones you would want to buy in a dollar store,” Dzurenda said. 

Shepack said the decision to end markups on hygiene products was “a huge start,” adding “this bill has the ability to codify some of the policies that are being implemented now.”

People who are incarcerated often supplement their diets with food from the commissary.

The Fines and Fees Justice Center and the prisoner advocacy group Return Strong surveyed 376 individuals incarcerated by the state between November and January to learn how they handle medical copays, debt and commissary prices. 

“The portions here when they feed us are child sized so I must try to supplement my diet with store as I am also diabetic but the cost is extremely inflated, which is a hardship for me,” one incarcerated individual wrote. 

According to the fiscal note from the department, it would lose an estimated $8.4 million in revenue over the biennium if the bill was implemented and commissary items were sold at cost.

Commissary revenue doesn’t just fund staff, Dzurenda said, but also substance abuse programs and other support services. 

“Right now, there are state employees in the state retirement program, who have all the other benefits of state employees, who are not funded at all through the general fund but instead are funded through commissary markups,” Shepack said in an interview. “We believe it’s time for the state to pay its own employees and not force families to do that.”

Medical debt, cremation, and taking rent

The legislation would also attempt to tackle medical costs associated with incarceration. 

Ending medical copays would cost an estimated $374,215, according to the fiscal note.

Shepack said in conversations with people who are incarcerated, they “made it abundantly clear to us that the costs of medical care is a deterrent from receiving it.”

Eliminating high commissary prices and helping inmates receive care earlier could save the state money in the long run, he said. 

“They will seek preventative care and early treatment versus waiting until it’s an emergency, which is often very expensive for the state and they never recoup that money,” Shepack said.

The survey sent to inmates showed 142 of the 376 interviewed had paid for “man down” fees for emergency medical services.

Katie Brandon, a public health intern with the Fines and Fees Justice Center who presented the legislation to the Senate Judiciary Committee alongside Shepack and Scheible, said among those surveyed with medical debt the average amount was $4,558. Some of those surveyed didn’t have medical debt. 

“At the average pay rate that people earn after the deductions of $72 per month, this would take over five years to pay off,” Brandon said. “This burden really shifts to families.” 

The 2022 audit found incarcerated people owed NDOC $10.4 million in outstanding and uncollected debt, including medical debt.

The bill would also require the department to set up indigent standards for people who’ve had a loved one die while incarcerated but can’t afford the fees to retrieve the body. 

Sonya Williams, whose loved one died in 2021, listed $1,400 of costs associated with retrieving the body:

• $1,200 for the cremation;
• $175 for the cremation container;
• $39 for the death certificate;
• $10 for a regulatory fee;
• $50 for a temporary urn;
• $14.67 in state tax.

She said it costs another $367.80 to obtain medical records. 

“I cannot even imagine the cost NDOC would have charged me if they cremated him and I had to buy his ashes back,” she wrote in testimony she submitted. “All this and we were not even allowed to see him for the 7 months prior to his death.”

Current NDOC policy also charges those incarcerated who work in prison for room and board. If people don’t work, they aren’t charged. 

The bill ends those room and board charges, which would cost less than $1 million over the biennium according to the fiscal note. 

Shepack said there seems to be an appetite among lawmakers to eliminate room and board fees.

The Fines and Fees Justice Center, he said, is working on scheduling a meeting with NDOC, a liaison from the governor’s office and the Senate Finance Committee to discuss what’s feasible in the bill. 

“The question is, What do the legislators feel are the most important parts and how much money (are they) willing to invest in the Department of Corrections and take that burden off families?” he said. 

SB 416 has been exempted from deadlines and currently doesn’t have a hearing scheduled in Senate Finance.