“In Kentucky, our prison budget is approaching half a billion dollars,” said J. Michael Brown, secretary of the State Justice and Public Safety Cabinet. “And as dollars get scarce, it forces a tremendous amount of scrutiny.”

The annual cost to keep someone in prison varies by state, and the type of institution, but the typical cost cited by states is about $35,000, said Peggy Burke of the Center for Effective Public Policy, a nonprofit group that works with local governments on criminal justice matters.

The most pervasive cost-saving trend among corrections departments has been to look closely at parole systems, in which it is no longer cost-effective to monitor released inmates, largely because too many violate their terms, often on technicalities, and end up back in prison. In California, among the few states to mandate parole for all convicts, parole violators  not new offenders  account for the largest percentage of inmates entering the system.

New Jersey recently began a program for some offenders on parole with technical violations, like failing to report to a parole officer or changing their address without the officer’s approval. Rather than being returned to jail, those former inmates are sent to a center for a clinical assessment of their risks and needs. With that change, the state is on track to save $16.2 million this fiscal year.

Other states are shortening paroles, or even sentences, to save money.

In Kentucky, Gov. Steven L. Beshear, a Democrat, is about to sign a bill that makes permanent a pilot program that offers qualifying inmates credit for time served on parole against sentence dates, in part to avoid a pattern of inmates’ choosing to stay in prison rather than risking later parole violations. The trial program saved the state $12 million last year. The state has also adopted a program that gives treatment rather than jail time to select drug offenders.

In California, where Gov. Arnold Schwarzenegger, a Republican, has called for $400 million to be cut from the state’s corrections budget, officials are seeking to remove low-level drug offenders from the parole supervision system and to provide them treatment options instead.

Like other states making such changes, California is led by a governor who long opposed such shifts in prison policies. But Mr. Schwarzenegger, as well as other leaders and lawmakers who are far more conservative, has come around to a view held by advocates of sentencing and prison reform that longer sentences do little to reduce recidivism among certain nonviolent criminals.