THE ANALYSIS WAS CONDUCTED BY A MANAGEMENT CONSULTING AND ACCOUNTING FIRM UNDER CONTRACT WITH THE NATIONAL COUNCIL ON CRIME AND DELINQUENCY. INCLUDED ARE DIRECT COSTS (SALARIES, FRINGE BENEFITS, DEBT SERVICE, SUPPLIES, OTHER), OUTSIDE SERVICE COSTS (MEDICAL SERVICES, GENERAL SERVICES, LEGAL AID, SERVICES FROM THE CITY'S EDUCATION DEPARTMENT AND HEALTH AND HOSPITAL CORPORATION), OTHER COSTS RELATED TO JAILING (LOST REAL ESTATE TAXES, HIGHER WELFARE PAYMENTS, LOST EARNINGS), COSTS OF MEETING THE MINIMUM STANDARDS FOR INMATES RECOMMENDED BY THE NEW YORK CITY BOARD OF CORRECTION IN THE WAKE OF PROTESTS BY INMATES OF THE 'TOMBS' JAIL, AND OPPORTUNITY COSTS (REFLECTING MONEY USED BY THE JAILS THAT OTHERWISE COULD HAVE BEEN USED TO REPAY SOME OF THE CITY'S DEBTS). IN THE YEAR ENDING JUNE 30, 1976, THE NEW YORK CITY JAILS' TOTAL DIRECT COSTS WERE $139.9 MILLION, OR AN AVERAGE OF $58.12 PER PRISONER DAY. OUTSIDE SERVICE COSTS WERE $33.1 MILLION, OR $13.75 PER PRISONER DAY. THE PROJECTIONS, WHICH ARE FOR 10, 20, 30, AND 40 YEARS HENCE, SHOW A THREEFOLD INCREASE IN OUT-OF-POCKET COSTS (DIRECT AND OUTSIDE SERVICE COSTS) BY 1996. (THE PROJECTIONS ARE SAID TO BE CONSERVATIVE). THE STUDY CALLED ATTENTION TO A NUMBER OF ALTERNATIVES--DECRIMINALIZATION, CITATIONS FOR NONDANGEROUS SUSPECTS, EARLY SCREENING OF SUSPECTS, DIVERSION, IMPROVED COURT PROCESSING, COMMUNITY-BASED SANCTIONS--WHICH HAVE PROVED SUCCESSFUL IN REDUCING OR SLOWING THE INCREASE IN JAIL POPULATIONS WITHOUT ENDANGERING THE PUBLIC. NEW YORK CIY HAS TRIED SEVERAL OF THE ALTERNATIVES. AN INDICATION OF THEIR EFFICACY IS THAT THE CITY'S JAIL POPULATION WAS REDUCED FROM A HIGH IN THE EARLY 1970'S TO A LEVEL COMPARABLE TO THAT IN 1956. HOWEVER, PEOPLE CONTINUE TO BE DETAINED IN JAILS WHEN THE PROVISION OF OTHER SERVICES WOULD BE AN APPROPRIATE AND EFFECTIVE ALTERNATIVE. THE STUDY'S CALCULATIONS OF FUTURE COSTS ESTABLISH A MODEL FOR ESTIMATING INCARCERATION COSTS AND FOR WEIGHING ALL GOVERNMENT COSTS IN ANY CASE INVOLVING MUNICIPAL INDEBTEDNESS. SUPPORTING DATA ARE INCLUDED. (LKM)