Captive Markets

Leah A. Plunkett

Volume 65, Issue 1, 57-112

Modern county jails have increasingly adopted policies to bill their inmates for some or all of the costs of their room and board. Statutes authorizing counties to implement these “pay-to-stay” programs are on the books in roughly seventy percent of states, yet the financial mechanism on which these programs typically rely is not well understood. Although the pay-to-stay obligation bears some resemblance to familiar citizen-state financial transactions—such as fines and penalties, restitution, taxes, and fees—it usually belongs to a distinct model that this Article calls the “government-imposed loan.” This Article provides an overview of the landscape of pay-to-stay programs and an articulation of the imposed loan model. The Article also assesses the normative desirability of the imposed loan model, focusing primarily on pay-to-stay programs.The imposed loan structure raises concerns in two primary areas: citizen privacy and governmental services. This model requires citizen-borrowers to disclose personal financial information—some of it with a dubious substantive link to the underlying issue for which a given service was provided—to the government on a long-term basis. It also creates some disincentive for these borrowers to work, thus increasing the likelihood that they will consume governmental services in addition to the one for which the loan was imposed. On balance, it does not appear that the familiar structure of a consumer loan translates well for use in captive markets, such as jail housing or emergency services, where citizens essentially have no choice but to consume services provided by the government through its police powers.

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