States don't use third grade failure rates or reading scores to determine prison space

For years now, I've heard the idea that states use reading scores and failure rates of third graders to determine prison space. The idea recently came up on the Education Writers Association listserv as reporters were trying to find out who first came up with the idea and whether it's true.
Turns out, it's not.
The Washington Post looked into it since several of Virginia's candidates for governor have made the claim.