Report: Taxpayers Responsible for Helping Keep For-Profit Prison Operators Financially Afloat


A new report on for-profit private prisons shows how correctional corporations make money whether cells are empty or occupied, depending on citizens to pay “low-crime taxes” when occupancy is down in order to cushion corporations’ bottom lines. According to In the Public Interest’s (ITPI) report, which analyzed 62 contracts between state and local governments and private prison operators, “lockup quotas” serve to “incentivize keeping prison beds filled, which runs counter to many states’ public policy goals of reducing the prison population and increasing efforts for inmate rehabilitation.”

The majority—65 percent—of contracts that ITPI obtained either obligate the state to maintain prison occupancy rates above 80 percent and up to 100 percent, or put the cost of empty beds on taxpayers. The states with the highest quotas are Arizona, Louisiana, Virginia, and Oklahoma.

“What corrections should not be is a turnkey, for-profit machine,” said the former director of the Oklahoma Department of Corrections, Justin Jones, on an ITPI press call last week. Jones left his position earlier this summer, he said, in part because he disagreed with the state’s increasing privatization of incarceration.

And in Colorado, despite a one-third reduction in the crime rate, ITPI reports that the state has opted to house more than 3,000 prisoners in facilities operated by the major private prison operator, Corrections Corporation of America (CCA), rather than in state-run prisons “to ensure they met the occupancy requirement.” The estimated cost to taxpayers, who are paying doubly for unoccupied state prison beds and a per-diem for each inmate to the CCA, is $2 million since the contract was negotiated in 2012.

The ITPI recommends that state and local governments reject mandated occupancy quotas and protect taxpayers from being penalized when crime rates drop, in part because “bed guarantee clauses can also tie the hands of lawmakers,” who might want to seek more effective alternatives than imprisonment as punishment for certain crimes, but who could be restricted by adherence to contract language that serves only to minimize risk to private corporations.

“Why would we promise a corporation they’d be paid with taxpayer funds even for the prisoners they don’t house?” asked Alex Friedman, managing editor of Prison Legal News, on the press call. The answer, he said, is simple: to “safely and effectively guarantee CCA’s profit margin.”

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