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* Most states look to reduce populations, close doors
* Ohio, Louisiana, Florida weigh prison sales
* Some states worry about threat of early release
By Lisa Lambert
WASHINGTON, May 20 U.S. states have been shackled for years by the rising cost of keeping inmates in prison. Now they are planning a getaway.
In the final stretch of approving budgets for the next fiscal year, many statehouses want to save money by changing incarceration policies and closing prisons. Florida is set to bring in more private contractors to run its prisons while Ohio and Louisiana consider selling theirs.
More than 2 million people are in state and federal prisons and local jails, many in facilities funded by states. For almost all states, corrections is a rapidly growing expense.
State spending on prisons shot up to $74 billion in 2007 from $63 billion in 1997, according to the U.S. Bureau of Justice Statistics. Local government spending on jails rose to $116 billion from $99 billion during that same time.
One of the main reasons for the high cost is that the United States has the highest documented incarceration rate in the world, according to the International Center for Prison Studies at King's College London.
The American rate stood at 743 people incarcerated per 100,000 of the population, ahead of both Russia's rate of 585 and China's rate of 120. In contrast, the rate in England and Wales was 150, 117 in Canada, 96 in France, and 88 in Germany.
"Before the Great Recession hit, that was the standard policy: let's lock them up," said John Thomasian, who has analyzed U.S. corrections spending for the National Governors Association.
Graphic showing how states fight rising prison cost: here
With the average prisoner now costing $24,000 a year, most states now want to cut prison populations to the point they can close the facilities. Savings from a closed prison are so significant that states may lay off corrections officers and just let the buildings stand vacant.
"Even if it lies fallow, it's cheaper," Thomasian said.
Rising costs could even force states into a politically unpopular position -- having to hike taxes to house criminals.
"Two of our three largest obligations for general revenue tax dollars are facing unsustainable growth in the next few years," Arkansas Governor Mike Beebe said in his annual address in January. "Both our Medicaid costs and our prison population are increasing, propelling us toward the unpalatable choice of raising taxes or cutting services."
As the recession took hold, battles erupted in legislative chambers across the country over slashing services and using other once-unthinkable measures to save money. While state revenue is improving, it hasn't reached pre-recession levels. That means states must still close budget gaps totaling more than $100 billion for the next fiscal year, which for most starts on July 1.
THE GREAT ESCAPE
States are shrinking populations by offering inmates ways to reduce sentences or by keeping people from going to prison in the first place, said David Fathi, director of the National Prison Project at the American Civil Liberties Union.
"These ideas have been around for a long time, but they are getting a lot more traction now that states are having to look at cutting essential services," he said.
Fathi's group is seeing states change regulations so a person on parole will not go back to prison for a "technical" violation, such as missing a meeting with a parole officer.
An informal analysis of a National Conference of State Legislatures database shows that at the start of the fiscal crisis, states cut prison operating costs, then released or moved inmates and finally closed facilities. This saved more than $4 billion.
During 2009, when the budget crisis was heating up, states' prison populations declined 0.2 percent, the first drop since 1972, according to the federal Bureau of Justice Statistics.
In Ohio, the House recently passed a bill to offer "earned compliance credits" that would move some prisoners to less-intensive supervision and speed up probation and parole processes, in the hope of emptying several thousand inmate beds and saving $77.9 million per year.
Oklahoma, meanwhile, expanded a community sentencing program for nonviolent offenders and increased the use of Global Positioning System (GPS) monitoring. It also cut the number of paroles the governor must approve.
The state's House Speaker Kris Steele said Oklahoma spends $56 a day incarcerating someone, but only $3.50 a day putting that person in community sentencing and $4.75 a day monitoring the person with GPS. The legislation will save the state at least $5 million a year, according to Governor Mary Fallin.
Privatizing prisons in Florida is touted to save the state up to $40 million a year. The deal would bring in The GEO Group (GEO.N), based in Florida's Boca Raton and the second-largest U.S. private prison operator after Corrections Corporation of America (CXW.N). [ID:nN12292092]
But bringing in private firms to run prisons is no panacea, and in fact could end up costing states more.
In Arizona, the prison population has increased tenfold in the last 30 years with the number of private prisons mushrooming. However, a 2010 report from the auditor general found that Arizona paid more for inmates in private prisons than for those in state facilities. The cost of an inmate in a state prison is $48.13 per day, compared to the cost of $55.89 per day in a private prison, according to the report.
According to the Federal Bureau of Investigation's survey of crimes reported by law enforcement, the violent crime rate decreased 6.1 percent in 2009 from 2008 and declined 15.2 percent from 2000. The survey found property crimes dropped 16.1 percent from 2000 to 2009, as well.
A Department of Justice survey of households about crimes such as rape and theft, which can pick up law-breaking that victims do not report to the police, found that violent crime rates in 2009 hit a record low.
A drop in criminal activity may drive down the need for prisons, but a recent report from the Pew Center on the States suggested much of the decline is because states have found ways to "effectively reduce their prison populations without sacrificing public safety."
Mostly, that had to do with parole. California and Michigan both cut their prison populations by giving parolees alternatives to returning to prison for minor violations, the Pew report said.
Still, some worry early releases threaten public safety.
Wisconsin State Senator Van Wanggaard blasted a bill on the state's early release program, saying "our society, our judicial system and our crime victims demand accountability for crimes -- not early release."
(Additional reporting by Karen Pierog in Chicago and Tom Brown in Miami; Editing by Andrea Ricci)