Under existing policies, States will increase their prison populations by over 68 percent by 1994. This projected inmate population increase translates into an additional 460,000 inmates by 1994, for a total of 1.13 million prison inmates. With average operating costs of $25,000 per inmate per year and a construction cost of $50,000 per cell, States will require at least an additional $35 billion to build and operate their prisons over the next 5 years. By 1994, the current incarceration rate of 250 per 100,000 population will increase to 440. The primary reason for the dramatic increase in prison populations is the war on drugs. As States are faced with increasing prison admissions, longer prison sentences, and limited prison capacity, new methods for shortening prison sentences must occur. By 1991, California will become the first State to exceed 100,000 inmates; by 1994, the State will have over 136,000 inmates. Florida's prison system is projected to grow faster than any other State, reaching over 100,000 inmates by 1994. Prison population increases are also projected for Illinois, Louisiana, Massachusetts, Michigan, Nevada, Ohio, Oklahoma, Oregon, Tennessee, and Virginia. Policy implications of the NCCD survey are discussed in terms of an aging prison population, expanded use of good time credits, an increasing proportion of Hispanic and black prisoners, escalating prison budgets, shortages of correctional staff, and prison construction expenditures. 7 references, 3 tables, 3 figures.