Privatizing Prisons Is a Risky and Costly Scheme

States Blocking Privatization in Response
by Joshua Miller
AFSCME

The get tough on crime environment has led to an explosion in the state prison inmate population over the last two decades. But weighed against other priorities, states find it difficult to convince taxpayers to finance new prison construction. So private entrepreneurs have capitalized on the situation by building prisons and leasing bed space to jurisdictions desperate to relieve overcrowding.

Unfortunately, legislators are often unaware of the problems caused by privately-run prisons.

Two companies currently dominate the private prison industry, Corrections Corporation of America (CCA) and Wackenhut Corrections. One way these companies grew was by locating speculative prisons in economically depressed communities. These communities would often bend over backwards for the promise of jobs. Once a private prison was constructed, the company was able to acquire inmates through lucrative contracts with out-of-state jurisdictions.

This was the scene in Youngstown, Ohio, where abandoned steel mills dominate the landscape. CCA obtained the land to build a 2,000-bed, medium-security facility for $1, and also received tax abatements and free utility hookups. But like so many other private prisons, the Youngstown facility soon became a nightmare. In a little over a year, there were 20 inmate stabbings, two homicides and a major escape. An investigative report, requested by Attorney General Janet Reno, concluded that the facility opened with no policies and procedures in place and had lax security, inexperienced and poorly trained staff, and few educational and work opportunities for inmates.

Similar fiascoes recently occurred in other states including Texas, Louisiana and Florida. These operational disasters are not isolated incidents, confined to a few under-performing facilities. It is inherent in private prisons that inevitably the profit motive creates cost-cutting practices that are not suited for a labor-intensive and inherently dangerous industry like corrections.

For instance, poor pay and benefits have repeatedly resulted in chronic turnover and understaffing in private prisons. Stock option-based retirement plans shift the facility’s mission from public safety and inmate programming to controlling company expenditures.

After more than a decade of high growth and profits, states are finally taking a closer look at this problem-plagued industry. North Carolina recently canceled two contracts with CCA for non-compliance with its contracts, and in February, Arkansas announced it would be taking over two Wackenhut-run facilities.

Illinois and New York enacted laws that prohibit privatization of prisons, correctional facilities, and any services related to their operation. Other states have taken steps to ban, curtail or regulate the industry. Recently, North Carolina, California, and Montana passed laws banning the importation of inmates from other states. In the 2001 state legislative sessions, several states considered similar legislation.

Ohio passed strict private prison regulations in the wake of the Youngstown crisis. Texas legislators cracked down on private prisons after officials were embarrassed in the aftermath of a major escape.

The awareness of these problems has had another major effect: in 2000 no new state issued a request for proposals (RFPs) for private prisons. The interest of state legislatures in curtailing the industry shows promise for the demise of the for-profit prison industry and that government is best suited to protect public safety.

For more information about prison privatization, including model policies and state resources, visit www.afscme.org or click here for CPA resources.