Despite much speculation that court orders against correctional facilities have adversely impacted government finances, little empirical investigation has been conducted. Counties, already experiencing severe fiscal crisis, may increasingly allocate more of their budget toward local jails to comply with court‐ordered improvements. This hypothesis was tested by examining time series data, case histories, and interviews with government, corrections, and justice officials in three counties. In addition, cross‐sectional data from two constructed samples of matched counties compared expenditures in counties under and not under court order. Results suggested that judges were sometimes persistent in seeking reform, even ordering direct expenditures on jails. However, statistical investigation revealed that the effects of judicial intervention were relatively strong in some cases, but weak in others. The effects of court orders on correctional policy are heterogeneous, and the judicial “power of the purse” is limited by various legal and pragmatic constraints.