If pursued, that would be the largest investment ever made in the state’s aging correctional system, following years of neglect and controversy.

The study, commissioned by the state Department of Public Safety, says the correctional system is seriously overcrowded, has been poorly maintained, and is in no shape to accommodate a projected increase in prisoners.

It calls for two news jails on the Big Island, new medium- and minimum-security prisons, and a secure substance abuse treatment facility at unspecified locations.

The system currently has a rated capacity for 3,369 inmates, but there are more than 5,650 inmates in state custody already. More than 1,000 are serving time in private Mainland prisons under contract to the state. The report, by Carter Goble Associates, estimates that Hawai'i will have 8,320 prisoners by 2013.

Department of Public Safety director John Peyton said officials will review the report for several weeks before making any recommendations to Gov. Linda Lingle, but that it is clear that more cells are needed.

"We need to expand and we need to replace," he said. "The question is how to prioritize with the money that’s available."

But others worry that building up prisons and jails would hurt efforts to expand drug abuse treatment programs outside prison.

"The prisons are in physically bad shape and something definitely needs to be done," said Kat Brady of the Community Alliance on Prisons. "But my fear is that expanding their capacity will kill diversion programs, and that’s really problematic to me."

She noted that Lingle’s proposed budget for the coming fiscal year includes less than $500,000 in new money for treatment and job training programs for parolees.