To be clear, it's not 3 in 5 incarcerated people, it's 3 of 5 in jail. Jail is where you go after being charged, but before conviction, or if you're convicted of a misdemeanor (less than 1 year sentence).

Unfortunately, there is an incentive for local prosecutors to convict people of offences with sentences longer than a year, so as to have them moved to state prisons, but that's a somewhat separate issue.