Private Prison's Cost Benefits Debated

The New York Times
PHOENIX — The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates. But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons — even though they often steer clear of the sickest, costliest inmates.
The state’s experience has particular relevance now, as many politicians have promised to ease budget problems by trimming state agencies. Florida and Ohio are planning major shifts toward private prisons, and Arizona is expected to sign deals doubling its private-inmate population.
The measures would be a shot in the arm for an industry that has struggled, in some places, to fill prison beds as the number of inmates nationwide has leveled off. But hopes of big taxpayer benefits might end in disappointment, independent experts say.
“There’s a perception that the private sector is always going to do it more efficiently and less costly,” said Russ Van Vleet, a former co-director of the University of Utah Criminal Justice Center. “But there really isn’t much out there that says that’s correct.”
Such has been the case lately in Arizona. Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.
The research, by the Arizona Department of Corrections, also reveals a murky aspect of private prisons that helps them appear less expensive: They often house only relatively healthy inmates.
“It’s cherry-picking,” said State Representative Chad Campbell, leader of the House Democrats. “They leave the most expensive prisoners with taxpayers and take the easy prisoners.”
In the 1980s, soaring violent crime, tougher sentencing and overcrowding led lawmakers to use private prisons to expand. Then, as now, privatization advocates argued that corporations were more efficient. Over time, most states signed contracts, one of the largest transfers of state functions to private industry.
Nationally, the number of state inmates in private prisons grew by a third over the past decade to more than 90,000, but it has stagnated, and some states have reduced total prison populations — shifting nonviolent offenders to treatment programs while bolstering probation. Now, Ohio lawmakers want to privatize prisons with 6,000 inmates, and Florida will transfer institutions with 15,000 inmates to private management. The Arizona plan would add 5,000 private prison beds.
Matthew Benson, spokesman for Gov. Jan Brewer of Arizona, a Republican, did not dispute the state research. But he said officials had a “pretty wide lens” to interpret the cost-savings mandate, like taking into account the ability of private companies to recoup hundreds of millions in construction costs over the life of contracts.
“It is a significant advantage to have a private firm be able to come in and front the costs,” he said.
Privatization advocates play down the data. Leonard Gilroy, director of government reform for the Reason Foundation, a libertarian research organization, questioned whether all costs were included and said the figures were too narrowly drawn, particularly on medium-security prisons, to prompt conclusions. “It is looking at a limited slice,” Mr. Gilroy said.