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ANALYSIS - States look to save with lockdowns, private prisons

SAN FRANCISCO (Reuters) - Washington state has found a way to save money on prisons -- restrict inmates to their cells one day a month and pare back staff.

An inmate serving a jail sentence rests his hand on a fence at Maricopa County's Tent City jail in Phoenix July 30, 2010. REUTERS/Joshua Lott/Files

Desperate to respond to slumping revenue, many states are looking to squeeze savings out of penitentiaries, with solutions ranging from lock-downs to turning inmates over to private companies.

Prisons in Washington state will go on lock-down one day a month through June, confining inmates to cells and adjacent living areas. That cuts the need for resources and lets wardens send some staff home -- without pay.

Washington state ran a trial of the lock-downs and furloughs in November and opted last month for the program to go into effect the remainder of the fiscal year

“It’s working as designed,” Dan Pacholke, deputy director of prisons at the Washington State Department of Corrections in Olympia, told Reuters.

Savings from the furloughs in Washington state may reach $1 million and will be applied toward a targeted $48.4 million, or more than 6 percent, cut in corrections spending demanded by Governor Christine Gregoire to help balance the state’s books.

Paul Guppy, research director of the Washington Policy Center in Seattle, isn’t impressed. State officials across the nation contending with ongoing weak revenue should instead more aggressively embrace private prisons, he said.

Not only are they built faster and at lower cost than public prisons, they cost less to staff and their employees do not add to public pension liabilities, Guppy said.

“The furlough approach is of limited utility at best,” Guppy said. “It doesn’t change the structural cost of running the correctional system.”


As states pare spending, private-prison companies like Corrections Corporation of America CXW.N and The GEO Group Inc GEO.N stand to benefit.

“The growth potential for the business has definitely become better... But the opportunities take time to play out,” said Barclays Capital analyst Manav Patnaik.

They take time because state governments can move at a glacial pace and because prison guard unions are a major obstacle in some states, including Washington.

In California, which has the largest inmate population of any state -- and a $25 billion budget hole -- guards likewise oppose the idea of private prison companies opening facilities to house state prisoners.

Private prisons have other critics, too. Advocates for inmates question their safety, security and accountability.

Private prison operators have, however, found toeholds in California with contracts to manage some federal and community facilities and deals to house state inmates in out-of-state facilities.

Rather than try to pry California wide open, private-prison operators are taking what business the state has to offer, which may inevitably be on the upswing regardless of political opposition, said Patnaik.

For now Corrections Corporation, which bills itself as the fifth-largest U.S. corrections system with capacity for 90,000 beds for inmates, is selling itself as a complement to California’s prisons -- out of state.

“We provide a relief valve,” said Steve Owen, spokesman for Nashville-headquartered CCA.


If any state prison system needs relief, it’s California’s. The matter of its notorious overcrowding has reached the U.S. Supreme Court, which could back a lower court’s order to reduce the states’ roughly 147,000 adult inmate population to 115,500 -- still a tight squeeze in prisons designed for 84,000.

Letting masses of prisoners go free would be political suicide for state leaders given high recidivism levels.

Meanwhile new prisons can’t be built fast enough, likely leaving private prisons outside California in line for more business from the state.

Roughly 10,300 California inmates are already in Corrections Corporation facilities in other states and the number may reach nearly 12,850. GEO has a deal with the state to begin housing up to 2,580 inmates in Michigan in May.

“Release is not the only option there in California. There is capacity elsewhere,” said James F. Blumstein, director of the Health Policy Center at Vanderbilt University, who has researched private prisons.

They may also get an additional boost if California’s leaders lower prison spending from the level proposed by Governor Jerry Brown’s in his state budget plan.

“If I’m a public manager looking to build a prison why should I use scarce public capital resources when I can have a five-year contract with private company?” Blumstein said.

Other financially troubled states may also turn to private prisons. Fourteen states currently have overcrowded adult prisons and no contracts with private operators, Patnaik said.