Who is the Colorado Criminal Justice Reform Coalition?

Our mission is to reverse the trend of mass incarceration in Colorado. We are a coalition of nearly 7,000 individual members and over 100 faith and community organizations who have united to stop perpetual prison expansion in Colorado through policy and sentence reform.

Our chief areas of interest include drug policy reform, women in prison, racial injustice, the impact of incarceration on children and families, the problems associated with re-entry and stopping the practice of using private prisons in our state.

If you would like to be involved please go to our website and become a member.

Sunday, October 25, 2009

Private Prison Companies Still Locking In On Business

Wall Street Journal
For a land of the free, the U.S. has a lot of prisoners: Over the past 25 years, our inmate population has swelled to 2.38 million, from roughly 700,000. Our incarceration rate is the highest in the world, and our federal prisons are at 137% of their capacity.
This should be good news for the private prisons that absorb the spillover from congested federal and state penitentiaries. But, alas, the recession has ruffled the economics of even law and order. Cash-strapped states are mulling measures, such as quicker paroles and earlier releases.

[corrections corp of america]
As a result, private-prison stocks are selling at unusual -- and untenable -- discounts to their historical multiples or value. The three biggest companies are Corrections Corp. of America, which controls 39% of private-prison beds, Geo Group, which runs 25%, and Cornell, with 10%. While their stocks have rebounded recently, they still trade at 12 to 18 times what each is expected to earn in 2010 -- compared with multiples pushing 30 before the financial crisis.
These grim valuations overlook private prisons' steady profitability, their stranglehold on a tough-to-penetrate industry and the chasm between supply and demand. Barclays analyst Manav Patnaik pegs the annual demand for new prison beds at 35,000, and the supply at just 20,000 public and private beds.
Today, budget-constrained states can ill afford the time or capital to build new facilities. And many increasingly find it cheaper to outsource part of their prison system. That explains why half the new inmates over the past year were sent to private prisons, even though less than 9% of U.S. prison beds are privatized.
Any reform that shortens sentences will hurt private prisons. But bulls say that the stocks may have already factored in much of the threat.
Case in point: Colorado wants to cut its prison population by 26%, or 6,000 inmates, over the next two years. But Signal Hill analyst T.C. Robillard doubts the state "can classify a quarter of its inmates as low-risk or near the end of their sentences." Mr. Patnaik pegs the net impact at just 1,000 beds, noting that releases will be offset by new intake.
Besides, private prisons earn steadily recurring revenue, impervious to seasons or business cycles. Customers don't defect easily to competitors. And the facilities tend to be durable, low-maintenance and quite immune to changing architectural whims.

1 comment:

Anonymous said...

If i had any say there wouldnt be one private prison in the USA.
Stop and look at what corporate america has done to our country in the past 20 years. All our industry and jobs are overseas so the corporations could make bigger profits?? Who gets the money?? I would say most of it goes to pay the CEO who brainstormed the idea to go overseas in the first place. Seems to me the stockholders are losers as well as all who lost there jobs when the companys went overseas.
The next thing we will get from the companys that run private prisons will be to move them overseas so they can make more profits?? djw