City and county jails have become the "social agency of last resort" for millions of poor, homeless and mentally disturbed Americans who have no other place to go, a governmental advisory panel was told yesterday.

Cuts in social programs, hard economic times and the development of psychotropic medicines, which have allowed large numbers of disturbed persons to leave mental institutions, have contributed to a dramatic increase in persons jailed for non-serious crimes.

"Many of the people in jail today are there because we, as a society, have found no other place for them," said Judith Johnson, director of the National Coalition for Jail Reform, which represents 31 organizations, including the American Bar Association and National League of Cities.

Local jails are being used to house a "potpourri of juveniles, drunks, the retarded and the mentally ill" as well as people "who indeed should be locked up," added Anthony P. Travisono, director of the American Correctional Association.

Johnson, Travisono and other witnesses told the Advisory Commission on Intergovernmental Relations that conditions in jails are at a "crisis" level, largely because of overcrowding.

For more than a decade, the number of prisoners held in the nation's 3,493 jails did not increase, but since 1978 the jail population has increased 33 percent to 7 million persons per year.

One reason for the increase is tougher sentencing by judges.

Another is the "dumping" of state prisoners into local jails, according to Aldine Moser of the National Sheriffs' Association. In 1981, 8,576 state prisoners were moved from state prisons to local jails because the state institutions had exceeded their capacity.

While the number of juveniles in jail has dropped, at least 300,000 persons under age 18 are still being held in local jails each year, the panel was told.

The suicide rate for juveniles in jail is nine times higher than the rate in juvenile centers, Johnson said. Few local jails are designed or have enough room to segregate adults from juveniles or keep hardened criminals away from persons awaiting trial, other witnesses said.

Johnson said she was "most outraged" about the number of mentally disturbed persons in jail. Moving mentally ill persons out of institutions during the 1970s may have been a good idea, but in many cases "the money has not followed the people," she said.

"For many, one kind of institution--the mental hospital--has been replaced by another institution--the jail," Johnson said. More than 600,000 mentally ill and retarded persons were held in jails last year, she said.

The witnesses also said jails are reporting increases in arrests of homeless and jobless men who have nowhere else to go.