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Privatizing Prisons

The for-profit prison industry has expanded rapidly, capitalizing on soaring incarceration rates.
The United States is experiencing the largest prison build-up in recorded history. The prison population has more than quadrupled since 1980. The number of prisoners in private prisons grew more than 2,000 percent between 1987 and 1996, soaring from 3,122 to 78,000.1 Privately-run facilities held more than 98,790 inmates at mid-year 2004—up 3.4 percent since 2003.2
The business of incarceration is booming, with revenue passing the $1 billion mark in 1998.
Two companies dominate the for-profit incarceration industry—Corrections Corporation of America (CCA) and the GEO Group, formerly known as Wackenhut Corrections. These two companies control 75 percent of the for-profit incarceration market.3
There is little credible evidence to support the industry’s claim that privatization of prisons cuts costs.
CCA advertises that privately-managed prisons can save states up to 20 percent on the cost of incarceration. Yet a study by the U.S. Bureau of Justice Assistance found that these savings “have simply not materialized.”4 In fact, some research has concluded that for-profit prisons cost more than public prisons.5 Furthermore, cost estimates from privatization advocates are misleading because private facilities often refuse to accept inmates that cost the most to house. For instance, a 2001 study concluded that a pattern of sending less expensive inmates to privately-run facilities artificially inflated cost savings.6 A 2005 study found that Arizona’s public facilities were seven times more likely to house violent offenders and three times more likely to house those convicted of more serious offenses.7
When profit is a primary motivation, quality of services and public safety are jeopardized.
Companies tend to skimp on employee training to maintain profits, which leads to increased incidence of violence. A nationwide study found that assaults on guards by inmates were 49 percent more frequent in private prisons than in government-run prisons. The same study revealed that assaults on fellow inmates were 65 percent more frequent in private prisons.8
Private prison companies stay profitable by courting political influence and supporting strict sentencing laws.
Corporate-owned prisons need a steady flow of inmates to maintain profits. To protect their profit margins, prison companies exert political influence by contributing thousands of dollars to state political campaigns. Lobbyists for private prisons support tough-on-crime legislation that ensures the continued need for prison space, including mandatory minimum sentences, life terms for “three strikes,” and sentencing juveniles as adults.9
States have used a variety of approaches to halt the privatization of prisons.
In recent years, states have addressed the problem in different ways:
  • Banning privatization of state and local facilities—Louisiana enacted a moratorium on private prisons in 2001. In 2000, Illinois and New York enacted laws that ban the privatization of prisons, correctional facilities and any services related to their operation.
  • Banning speculative private prison construction—For-profit prison companies have built new prisons before they were awarded privatization contracts in order to lure state contract approval. In 2001, Wisconsin’s joint budget committee recommended language to ban all future speculative prison construction in the state.
  • Banning exportation and importation of prisoners—To ensure that the state retains control over the quality and security of correctional facilities, North Dakota passed a bill in 2001 that banned the export of Class A and AA felons outside the state. Similarly, Oregon allowed an existing exportation law to sunset in 2001, effectively banning the export of prisoners. Several states have considered banning the importation of prisoners to private facilities.
  • Requiring standards comparable to state prisons—New Mexico enacted legislation that transfers supervision of private prisons to the state Secretary of Corrections, ensuring that private prisons meet the same standards as public facilities. In 2001, Nebraska legislation that requires private prisons to meet public prison standards was overwhelmingly approved by the legislature, but pocket-vetoed by the governor. Oklahoma passed a law in 2005 that requires private prisons to have emergency plans in place and mandates state notification of any safety incidents.
Public opinion supports government-run prisons over private ones.
A majority of voters oppose the privatization of prisons, with Democrats, Republicans and Independents equally against it. The public fears that privately-run prisons are more likely to cut corners and place profits ahead of public safety. Nearly 60 percent agree that government is best suited to protect public safety—providing necessary security and preventing prisoner escapes.10

This policy summary relies in large part on information from the American Federation of State, County and Municipal Employees.

Endnotes
  1. Brigette Sarabi and Edwin Bender, “The Prison Payoff: The Role of Politics and Private Prisons in the Incarceration Boom,” Western States Center & Western Prison Project, November 2000.
  2. Bureau of Justice Statistics, “Prison and Jail Inmates at Midyear 2004,” April 2005.
  3. American Federation of State, County and Municipal Employees, “The Evidence is Clear: Crime Shouldn’t Pay,” 2001.
  4. James Austin and Garry Coventry, “Emerging Issues on Privatized Prisons, Bureau of Justice Assistance,” February 2001.
  5. Dennis Cunningham, “Projected FY 2000 Cost of DOC Operated Medium Security Beds Compared to Private Prison Contracts,” 4th Annual Privatizing Correctional Facilities Conference, September 24, 1999.
  6. Policy Matters Ohio, “Selective Celling: Inmate Population in Ohio’s Private Prisons,” May 2001.
  7. Kevin Pranis, “Cost-Saving or Cost-Shifting—The Fiscal Impact of Prison Privatization in Arizona,” Private Corrections Institute, Inc., February 2005.
  8. James Austin and Garry Coventry, “Emerging Issues on Privatized Prisons,” Bureau of Justice Assistance, February 2001.
  9. “The Prison Payoff.”
  10. Lake Snell Perry & Associates, “Private Prisons Survey,” August 1999.
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