The impact of state funding of higher education and corrections on African American men was studied by analyzing the National Association of State Budget Officers' annual state expenditure reports for the 15-year period from 1985 to 2000. To ensure proper scale, all 1985 figures were converted to 2000-year dollars by using the Bureau of Labor Statistics consumer price index inflation calculator. The analysis established that the share of total state and local government spending on higher education has declined as spending on prisons has increased. Between 1985 and 2000, state corrections spending grew at six times the rate of state spending on higher education. Next, trends in African American male enrollments in higher education and estimates of African Americans in prison and jail were compared. The comparison revealed that nearly one-third more African American men are incarcerated than are enrolled in higher education. The following were among the policy actions recommended to help reverse these trends: (1) repeal mandatory sentencing, restore judges' discretion, and place low-risk nonviolent offenders in alternatives to incarceration; (2) reform drug laws to divert offenders from incarceration; (3) restructure sentencing; and (4) reform parole practices. (A bibliography listing 10 references is included along with 35 endnotes.) (MN)