Offender Diversion Into Substance Use Disorder Treatment: The Economic Impact of California's Proposition 36

We determined the costs and savings attributable to the California Substance Abuse and Crime Prevention Act (SACPA), which mandated probation or continued parole with substance abuse treatment in lieu of incarceration for adult offenders convicted of nonviolent drug offenses and probation and parole violators. We used individually linked, population-level administrative data to define intervention and control cohorts of offenders meeting SACPA eligibility criteria. Using multivariate difference-in-differences analysis, we estimated the effect of SACPA implementation on the total and domain-specific costs to state and county governments, controlling for fixed individual and county characteristics and changes in crime at the county level. The additional costs of treatment were more than offset by savings in other domains, primarily in the costs of incarceration. We estimated the statewide policy effect as an adjusted savings of $2317 (95% confidence interval = $1905, $2730) per offender over a 30-month postconviction period. SACPA implementation resulted in greater incremental cost savings for Blacks and Hispanics, who had markedly higher rates of conviction and incarceration. The monetary benefits to government exceeded the additional costs of SACPA implementation and provision of treatment.