Previous research has found that 14.5 percent of male inmates and 31 percent of female inmates have a serious mental illness, rates that are two to six times higher than those for the general population. This report examines the cost-savings that can be obtained by providing treatment alternatives to incarceration for this group of offenders. This report discusses various alternatives to incarceration for mentally ill offenders, how they work, and how they can save money for local governments when properly implemented. One of the main alternatives to incarceration is the use of specialized policing responses (SPRs), teams of crisis intervention specialists and police-mental health co-responders who are trained to link mentally ill offenders to treatment alternatives without fear of arrest. This method has been found to save money by reducing reliance on police, jails, and emergency rooms to handle crisis situations involving mentally ill offenders. Another alternative involve jail diversion where mentally ill offenders receive treatment instead of jail time. This method saves money because it has been found to be less costly to provide health care services in the community than it is to provide health care services to incarcerated persons. In addition, jail diversion reduces expenditures associated with unnecessary arrests and detentions. Two other alternatives to incarceration are the use of courts and community reentry planning. Specialized courts have been found to be an effective method for diverting mentally ill offenders from incarceration and into treatment, while community reentry planning helps recently released offenders adjust to their environment thereby reducing recidivism and improving health outcomes. Specialized courts reduce costs by decreasing criminal justice costs associated with arrest and incarceration, while transitional planning reduces costs associated with compromised public safety, re-arrest, hospitalizations, and homelessness. The success of these programs depends on strong community-based services available to treat mentally ill offenders. 33 endnotes