A Tale of Two Cities? Marijuana, Municipal Difference, and Externalities

For the past several years I’ve been writing about criminal justice externalities at the local level, pulling on the loose thread of the correctional free lunch—the observation that local officials make the decisions that send people to prison but the state pays for prison out of general revenues.  The phrase was coined by Gordon Hawkins and Frank Zimring in the Scale of Imprisonment; Hadar Aviram provides a great introduction to the theory here (the very introduction, in fact, that piqued my interest).  From 2000-2009, counties in California used prison at very different rates, but only 3 percent of the variance can be explained by differences in rates of violent crime.  An ongoing question is how to internalize these externalities—I’ve proposed breaking up the state and unifying the pieces of criminal justice at the county level (Leon Neyfakh’s summary of my argument in Slate is here).   My reasons for picking the county level are, inter alia, that DA’s (and judges) are elected at the county level, jails are county institutions, and the Sixth Amendment says juries should come from the county and district of the crime (though I’ve also made the point that crime does not confine itself to county boundaries).

Two recent articles from Colorado underscore the idea that there are also important municipal/intra-county dimensions to criminal justice externalities.  In Colorado, several large cities/towns have banned recreational marijuana sales (most notably Colorado Springs).  This then means that little towns just outside the city limits can make money from sales (including, notably, from state sales tax rebates).  In one instance, a marijuana-selling town also contracts law enforcement out to the county sheriff–meaning that all costs are externalized (assuming crime goes hand in hand with marijuana sales, where the evidence is mixed) but all the benefits are internalized.  This strikes me as ripe for a race to the bottom where every jurisdiction ends up authorizing sales because it will end up paying for the costs anyway without reaping any of the benefits.

At the same time, there is also evidence from Colorado about action within the municipal level.  Denver is, apparently, siting marijuana businesses in rich white neighbor–oh, I mean poor neighborhoods of color (sorry, just wanted to break up the predictability a bit).  So there, the costs are apportioned intra-city but the benefits (in the form of sales tax rebates) accrue at the city level.  It’s the opposite internality/externality problem.

I don’t know that I have a one-size-fits-all prescription about the optimum state/county relationship in criminal justice.  (I’m still waiting for the criminal justice equivalent of a theory of optimum currency areas.)  In case you want to read more from me, you can check out my answer about about why we have state prisons—and how they used to be a revenue center, not a cost center–or about how the question about the proper relationship between county and state criminal justice in California (so important after realignment) has actually been with us since statehood.  If  you want to read someone else, a great place to start is  Lisa Miller’s excellent work the Perils of Federalism.  In general, though, I think discussions of criminal law in the legal academy tend to focus too much on the federal system and not enough on the state and local—even though there are so many fascinating issues to be explored there.

Author: W. David Ball

W. David Ball is an Associate Professor at Santa Clara School of Law. He writes and teaches primarily in the fields of criminal law and criminal procedure, with a special focus on sentencing and corrections. He also serves as the Co-Chair of the Corrections Committee of the American Bar Association.

6 thoughts on “A Tale of Two Cities? Marijuana, Municipal Difference, and Externalities”

  1. David — I am not positive but I think John Pfaff has also studied the change in prosecutors behavior toward charging what were once misdemeanors as felonies, perhaps worth a look.

    1. Thanks, Keith. I know and love both John and his work. As it happens, John presented this paper (http://readingroom.law.gsu.edu/cgi/viewcontent.cgi?article=2700&context=gsulr) at the conference where I presented my first paper on the subject. I think the difference between our approaches is that we slice the analysis a little bit differently. I was looking at contemporaneous comparisons across jurisdictions–why, given the same statutes, are counties incarcerating at different rates–whereas John is looking at how prosecutorial behavior as a whole (arrest to charging ratios) have changed across time to explain aggregate rates of incarceration. Nevertheless, John is someone who shares my opinion that the criminal legal academy's focus on the federal system is totally misguided.

  2. The issue of towns being pressured to approve sales because of sales taxes and the sales in surrounding towns is a common issue with alcohol sales. Almost every dry county or town has a cluster of liquor stores right on the border.

    Similarly with liquor stores and the more problematic bars being clustered in poor neighborhoods.

  3. The American practice of electing prosecutors in the first place must have some effect. In Europe, prosecution is typically centralised. In England, lay magistrates are recruited locally, though not elected; but prosecutions of any seriousness are brought by the Crown Prosecution Service. In France, there is SFIK no local participation in criminal justice at all beyond juries. European prosecutors are civil servants; they have career incentives to win cases, and drop losing ones, but not to seek popularity through spectacular sentences. They are however completely insulated, like judges, from the resource consequences of sentencing.

    I would not exaggerate the explanatory power of this difference. Brazil has unelected career prosecutors, and a notoriously high incarceration rate.

    1. There's been a great deal of good work on this subject–see, e.g., Ron Wright's "How Prosecutor Elections Fail Us" (http://works.bepress.com/ronald_wright/10/). This is, again, part of the design dispute. Prosecutors are locally elected, and so, in theory, reflect local preferences about crime and punishment. It's debatable, of course, how transparent the operations of the DA's offices are, whether crime perceptions on the part of the voting public are accurate, and, of course, whether DA's can be properly blamed or credited for anything having to do with crime rates. The point I've tried to make in my work is that given that the power already exists at the local level, costs should shift there–or, alternatively, we should centralize at the state level. Giving power but not responsibility to the locals is just asking for trouble.

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