Sneaky Ways For-Profit Prisons Steal Taxpayer Money

Does anything say free enterprise like forcing states to fill prison beds or else pay for empty ones? Privatizing profits, socializing losses and ruining lives, all at the same time!

A new study by InThePublicInterest.org shows that for-profit prisons pad their bottom lines by negotiating sweet deals to guarantee payments for a certain number of beds, whether or not there are actually prisoners in those beds. That gives states an incentive to send prisoners to these for-profit concerns while leaving state facilities to languish.

It should come as no surprise to anyone that these sweetheart deals are negotiated in red states. From the report:

Arizona, Louisiana, Oklahoma and Virginia are locked in contracts with the highest occupancy guarantee requirements, with all quotas requiring between 95% and 100% occupancy.

Arizona is one of the worst. In Arizona, they bilk taxpayers through quotas AND increased costs per prisoner.

Arizona: Three Arizona for-profit prison contracts have a staggering 100% quota, even though a 2012 analysis from Tucson Citizen shows that the company's per-day charge for each prisoner has increased an average of 13.9% over the life of the contracts.

Of course, this means there are incentives for states to shovel people into prison, too. Corrections Corporation of America (CCA) donates millions to the Republican Governors Association to elect governors friendly to their business model. According to the report, CCA sent letters to 48 governors offering to buy their prisons in exchange for 20-year contracts with bed quotas. Nice work if you can get it, right? Guaranteed profits for 20 years is a nice return on your investment!

These contract clauses 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. When policymakers received the 2012 CCA letter, some worried the terms of CCA’s offer would encourage criminal justice officials to seekharsher sentences to maintain the occupancy rates required by a contract.

Policy decisions should be based on creating and maintaining a just criminal justice system that protects the public interest, not ensuring corporate profits.

The full study can be read here.

Is there a clearer example of why services which the government should be providing should not be privatized? What happens when charter schools start negotiating with school districts for seat guarantees after they fail to perform up to standards, for example? Taxpayers are paying for substandard services because profits matter more to these corporations than the service they're providing.

If you're as outraged by this as I am, please sign ITPI's petition to stop private companies from padding their bottom lines with taxpayer dollars.

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