Since 1980, the number of people held in State and Federal penal institutions has increased by 76 percent. One of every 52 adults, or about 2 percent of the adult U.S. population, is under some form of correctional sanction. Corrections expenditures have been one of the fastest rising components of State budgets for the past decade. Overall, State prisons were operating at 120 percent of design capacity as of December 1987, and the number of offenders sentenced to State prisons increased from 139 to 237 per 100,000 U.S. population between 1980 and 1988. Legislators play a role in correctional policies since they make decisions on punishment type and duration and on who gets punished. Legislators also appropriate funds to pay for corrections; in fiscal year 1987, States spent more than $11.7 billion on corrections. Key elements of sound correctional policies include sentencing reform, comprehensive community sanctions, prison construction cost containment, moderation of prison lengths of stay, coordination of State and local funding for corrections, and integration of corrections population forecasts and fiscal impact statements into legislative policy development. 29 references, 3 tables, 6 figures.