You Know What Doesn’t Work So Well? Private Prisons

The myth put forth by private prison corporations like Corrections Corporation of America (CCA) and the GEO Group that private prisons are cheaper than public prisons is shattered by a new report from In the Public Interest, thus undercutting the primary rationale for prison privatization efforts across the country. When pushing for contracts with the many states that use private prisons, these corporations claim they are the better option because they can run prisons more cheaply than the government can. But this report not only dispels that idea, it highlights some of the less-than-savory activities the corporations engage in because of the perverse incentives created by these contracts.

The report details several methods through which private prison companies mislead governments and the public about their supposed cost savings, particularly hiding costs of private prisons, inflating public prison costs, benefiting from mandated occupancy minimums and delaying cost increases until after contracts are signed.

Numerous studies have shown that private prisons are more expensive than their publicly run counterparts. The report details a series of meta-analyses of individual studies conducted on the comparative costs between public and private prisons, and all of them found that cost savings, at best, were minimal for private prisons—in many cases, private prisons were more expensive. One of the few studies that showed private prisons to be more cost-effective was funded by the prison companies and is currently the subject of an ethics inquiry at Temple University. A close examination of many of the states that have invested heavily in prison privatization has shown the failure of the “private prisons are cheaper” idea:

  • Arizona: The state found private prisons can cost up to $1,600 per prisoner per year, despite private prisons often only housing the healthiest prisoners.
  • Florida: Three separate multiyear studies found the majority of the private prisons in the state failed to meet the legally mandated 7% cost savings, while half of the private prisons failed to save any money at all.
  • Georgia: In 2011, private prisons cost the state $45.81 per prisoner per day, compared with $44.51 per prisoner per day in publicly run prisons.
  • Hawaii: The state found the projected savings of using private prison contractors were based on bed capacity rather than the actual number of people incarcerated and that indirect administration costs were not included.
  • New Mexico: Over a five-year period, the state saw its annual spending on private prisons increase by 57% while the prisoner population only increased 21%. A significant portion of the increase was because of automatic price increases included in contracts with the private prison corporations.
  • Ohio: The state expected the private operation of the Lake Erie Correctional Institution would save the state $2.4 million a year, but it has turned out to instead cost the state $380,000 to $700,000 a year.

As the report notes:

To maximize returns for their investors, for-profit prison companies have perverse incentives to cut costs in vital areas such as security personnel, medical care and programming, threatening the health and safety of prisoners and staff.

There are several different reasons that savings fail to materialize. CCA and other companies explicitly seek to increase their profits by changing the details of previously signed contracts. They do this by raising the per diem rates the state pays for each prisoner or by requiring occupancy rates of 90% or higher or the state pays for the empty cells in order to reach the required level. Private prison companies cherry pick their inmates and refuse to house more expensive prisoners. Many contracts exclude those higher-cost prisoners, such as those in maximum security, on death row, female prisoners or prisoners that have serious medical or mental health conditions. Companies also make their costs look lower by inflating the cost of public incarceration when making their sales pitch. They can do this by leaving out overhead costs in their prisons, not including costs the state has to pay in either public or private scenarios in the private prison cost but keeping them in the public prison cost calculation, and leaving out the additional costs of overseeing and monitoring private prisons that the state must engage in if it properly oversees its contractors.

At its national convention last year, the AFL-CIO came out in opposition to the privatization of prisons and the profit motive being used to increase incarceration.

Read the full report.

Reposted from AFL-CIO NOW

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Rep. Mike Coffman: Who Do You Work For?

Working America members to deliver thousands of furlough notices, petitions calling for end to privatization and radical corporate agenda.

(Aurora, Colo.) – On Thursday, Aug. 22, at noon, members of Working America and AFGE will deliver petitions and furlough notices from government employees and Colorado constituents to Rep. Mike Coffman’s office, calling for him to end his privatization efforts and end the shifting of public assets to fund a corporate agenda that paid for his re-election.

The event is part of the “Rep. Mike Coffman: Who Do You Work For?” campaign to educate Coloradans about the representative’s radical legislative agenda to privatize programs like Social Security and Medicaid and, most recently, his efforts to privatize the work of the Department of Defense.

WHO: Members of AFGE and Working America, constituents, organizers

WHAT: Lobby event at Rep. Mike Coffman’s office to ask “Who Do You Work For?”

WHEN: Thursday, Aug. 22, noon

WHERE: Rep. Mike Coffman’s District Office: 3300 S. Parker Road, Cherry Creek Place IV, Suite 305, Aurora, Colo. 80014

CONTACT: Ianthe Metzger: 202-538-2026, imetzger@workingamerica.org
Kevin Pape: 440-724-6980, kpape@workingamerica.org


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Working America, a national organization for working people without a union on the job, has 3 million working-class members who fight for good jobs and a just economy. Check out our brand new Web tool, fixmyjob.com.


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They’re Not Only Expanding Corporate-Run Schools, They Are Making Them Less Accountable

Working America members are in the midst of a fight to protect public education in North Carolina.

Since 2011, the state’s public school budget has been cut by $450 million, leading to overcrowded classrooms and outdated textbooks. Now the state legislature wants to continue weakening our public schools through the expansion of charter schools and voucher programs.

Both charters and vouchers take public money to send children to private and sometimes for-profit corporate-run institutions. These corporate run schools have little accountability, and make large profits by underpaying teachers.

Do we really want corporations teaching our students – and using tax-payer money to do so?

Working America member Joyce Mers is taking a stand against privatizing education. Joyce organized a church forum to discuss issues surrounding public education and promoted the event though her church newsletter. She even enlisted the help of education policy expert Dot Kearns to answer questions.

When discussing the immediate threats to public schools, Joyce referenced a bill that would restructure the oversight of charter schools. Under the proposal, charter schools would no longer be held accountable to the State Board of Education, which oversees all K-12 public schools.  Rather, charter schools would have a separate board, whose members would be appointed by Republican Governor Pat McCrory and the legislature. The bill also has provisions to eliminate certain charter school requirements.

“Right now only 50 percent of teachers in charter schools are required to have a teacher’s license and this bill would do away with that requirement completely,” said Joyce, “Also, the schools would not be required to perform a background check, which just doesn’t make sense to me – especially when there is a bill in the legislature trying to put armed guards in schools.”

Under this proposal, corporations have even more power to use taxpayer money to create and oversee charter schools.

When discussing public school funding, both Joyce and Dot noted that despite past cuts, student performance is high. “It’s a popular thing now to say everything is failing, but that just is not the case,” said Dot. She then cited the increase in North Carolina’s graduation rates. However, it will become difficult to maintain this success if more charters and vouchers drain public education resources and are held to different accountability standards.

The forum ended with Joyce collecting a dozen petition signatures from the group, which urge Governor McCrory to protect public school funding.  But we need to continue this pressure. Our state needs to fully invest in public schools. If you’re in North Carolina, email me at cmedlock-walton@workingamerica.org to find out how you can help.

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Governor Corbett Pretends to Care About Education to Sneak Through Liquor Privatization Plan

Pennsylvania Governor Tom Corbett and his allies in the state legislature are proposing a plan to privatize the state’s 600 Wine & Spirits stores.

The Governor claims this plan will generate funds that can be used toward education, which we take with a grain of salt since he has cut billions from education during his tenure.

The truth is, this is just the latest in Gov. Corbett’s longstanding pattern of cutting or privatizing anything in the Keystone State that isn’t nailed down.

Pennsylvania Wine & Spirits stores, run by the Pennsylvania Liquor Control Board (PLCB), generate nearly $500 million every year for the state treasury. These funds are used to pay for education and other public services. The stores also account for about 5,000 family-sustaining jobs, many of them union.

Gov. Corbett says “getting the state completely out of the liquor business” and instead auctioning off up to 1,200 liquor licenses to individual stores could generate $1 billion over the next four years, to be used toward “the education of our children.” We don’t believe that for a second, and here’s why:

In the past two years Gov. Corbett has shown apathy or downright hostility towards the education of Pennsylvania children: starting with his first budget that cut state education funding by $1.1 billion, so deep that teachers in the cash-strapped Chester Upland School District famously worked for no pay. On top of that, he has made giant cuts in funding for state colleges, reduced funding for early childhood education, abandoned “costing-out” studies that are used ensure poorer school districts get adequate funding, and trumpeted privately-run charter schools at every turn. One columnist called it “bombing public education back to the stone age.”

It’s also worth noting that Vahan Gureghian, owner of one of the state’s largest charter schools, is a huge Corbett campaign donor.

So no, we don’t believe Gov. Corbett when he says this privatization plan is about the education of our children.

More likely, he is interested in generating revenue for private liquor companies, shrinking the available funds the state treasury (to give him an excuse for the next round of cuts), dismantling the PLCB, and busting up the union that advocates for thousands of Pennsylvania Wine & Spirits employees.

That he is doing so while claiming to care about educating our children is nauseatingly cynical – preying on the insecurities of Pennsylvania parents and teachers to sneak through a plan that benefits private corporations.

Put another way, it’s classic Tom Corbett.

Take Action: Tell Gov. Corbett and the legislature to protect 5,000 jobs and badly needed revenue – stop the liquor privatization scheme.

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Gov. Scott Set to Hand Florida’s Prisons to Corporate America

by Donald Cohen, founder and executive director of In the Public Interest, a national resource center on privatization and responsible contracting. Reposted from the AFL-CIO NOW Blog

Florida Gov. Rick Scott and the Republican-controlled legislature are moving fast to privatize all 29 prison facilities in 18 counties in southern Florida.

Last year, the GOP prison privatization proposal was ruled unconstitutional because it was wrapped into a budget proposal, a violation of Florida laws that requires policy changes be in separate laws. Tallahassee Judge Jackie Fulford ruled that the lawmakers rushed the process.

The privatizers aren’t making the same mistake this time. Not only are they proposing to privatize the prisons but they are changing the law to be able to privatize any service as fast, as easily and as secretly as possible. Under the latest proposals, an agency would not have to report its privatization of a program or service until after the contract is signed. And they also would eliminate a current legal requirement to do a cost-benefit analysis before privatizing any government function.

In other words, don’t let the public know what you’re doing and don’t bother to find out the costs.

Scott, former CEO of hospital giant Columbia/HCA, came into office on a mission to privatize Florida government. Scott left HCA as the company was being investigated for the “biggest Medicare fraud case in U.S. history.”  Columbia/HCA ultimately paid a record $1.7 billion in fines, penalties and damages.

Scott has already proposed privatizing the state’s Medicaid system, state parkcampgrounds, the state’s three remaining public mental hospitals, three centers for the developmentally disabled and six veterans’ homes.

The two largest prison companies, Corrections Corporation of America (CCA) and GEO Group (formerly Wackenhut), are poised to strike, in what Judith Greene, director of Justice Strategies calls, “an unprecedented” expansion of the use of private prisons that no other state has undertaken.

GEO has been a consistent force within Florida politics. GEO Group alone gave more than $400,000 to the party in the past election cycle. Geo Group‘s lobbyist, Brian Ballard, hosted Scott at his Tallahassee home to watch the Super Bowl. GEO Group and CCA donated nearly $1 million toward the Scott’s inauguration celebrations.

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