The study reviewed the entire State-local relationship in corrections. The study found that the State is spending nearly $50 million for the housing of over 4,000 felons in local jails, an increase from $13 million for 2,000 prisoners 4 years ago. The State has managed recent felony prisoner populations by shifting the burden to local governments, requiring them to house more felons than the facilities and programs were intended to serve. The study recommends that the State establish a system of punishments that allocates the resources of the State and local governments so as to reserve the State prison system for the most serious and dangerous offenders. The Select Oversight Committee on Corrections accepts the staff findings and recommends that low-level property offenders be diverted from the State prison system. The handling of such property offenders locally would be partially funded by the State. Legislation for implementing this plan is proposed. 16 notes, appended data tables, and figures.