Peter Wagner has a fascinating new piece on Prisoners of the Census. If you're new to what Peter does, his organization, the Prison Policy Initiative, does innovative research and advocacy on the problems that ensue from counting mostly urban Black and Latino prisoners as residents of the predominantly white rural communities where many are imprisoned. Miscounting prisoners in this way diminishes the political clout of the communities the prisoners come from and provides the host communities with a windfall of tax revenues, based on the "increase" in their populations. The surprising thing is that communities who lose money to this arrangement are not the urban ones where the prisoners come from, but the the other adjacent rural areas that don't host prisons.
[M]ost of the money redirected by prison census counts is raised in specialty taxes (liquor taxes, cigarette taxes, recreational park usage fees, hunting-fishing licenses, etc.) and county sales taxes. Not all states have these revenue sources, and in the big picture this is small change, but it is important to see who pays for the windfall received by some.
Dutchess County, NY, can provide a detailed example. In 2003, the town of Fishkill and the small City of Beacon argued over whether the prison counted in one town was really in the other because $85,000 in county sales tax revenues was at stake. Although the prisoners were from New York City, neither the prisoners nor New York City had a valid claim on these funds.
This was not a state sales tax being distributed within the state on the basis of population, but a county sales tax being distributed on the basis of population within the county. The county sets the tax rate — about 3% of each purchase — and keeps that money locally. As a result of their "population" based formula, towns with elevated populations due to prisoners get an extra share. So if that money doesn't belong to New York City or to the prison towns, to whom does it belong?
That money belongs to every other town in the county that does not have a prison. The towns with prisons get a windfall, and every community without a prison is deprived of about 1.7% of the tax receipts it would otherwise receive.
(Read the rest.)