Are private prisons worth the cost?

By Suzy Khimm

Well before passing Arizona's controversial immigration law, Arizona lawmakers were treating the state as a laboratory of sorts for the criminal justice system. Last year, state legislators passed a bill that would have privatized almost all of Arizona's correctional system for $100 million upfront -- an unprecedented move by a state government. The main argument was economic, as private operators claimed they could run more cost-efficient facilities, which supporters said would help close a billion-dollar budget gap in Phoenix.

The bill wasn't ultimately signed into law, but Arizona has still put a growing number of inmates into private prisons each year, who now account for 20 percent of the state's prison population. Nationally, there's been a similar surge in private prison construction as the inmate population has tripled between 1987 and 2007: Inmates in private prisons now account for 9 percent of the total U.S. prison population, up from 6 percent in 2000.

Although private prisons have been sold on economic grounds, a study this year by Arizona's own Corrections Department questions whether such facilities can even deliver in terms of cost savings, reports the Arizona Republic. The state's cost study showed that it's often more expensive to incarcerate inmates in private prisons than in state-run facilities, despite the savings that private operators typically promise. "The cost of housing a medium-security inmate is $3 to $8 more per day in a private prison, depending on what assumptions are made about overhead costs to the state," according to the story. How did this happen? According to some observers, it's because private operators often low-ball their operating costs when presenting their case to the state. The Republic lays it out:

According to the National Institute of Justice, private prisons tend to make much lower estimates of their overhead costs to the state for oversight, inmate health care and staff background checks. Officials at public prisons often argue that the state winds up paying a higher cost for those services than is advertised, mitigating savings that private prisons are built to deliver. … To maintain profit margins, [Arizona State University professor] Pratt said, companies often cut back on staff training, wages and inmate services. "Cost savings like that don't come without consequences," Pratt said. "And that can present a security risk that's elevated."

In fact, the reason that Arizona is taking a second look at its private prisons right now is because of a high-profile fugitive case: Three inmates escaped from a private facility last month and are believed to be responsible for two murders during their flight, having only been captured last Thursday. This is just the latest episode in a long history of scandals that have plagued private prison operators, including charges of prisoner abuse in adult and juvenile facilities.

I don't think there's anything inherently wrong with privately run prisons, but if they can't even save taxpayers money -- and create greater security risks in an effort to deliver as promised -- then lawmakers should think again before resorting to them. Having poured millions into lobbying lawmakers, the private prison industry has also sold itself to local communities by promising to create jobs in the places where new facilities are built. The thing is, if the same funds were put toward constructing new publicly run facilities, the money could have a similarly stimulative effect on local economies -- and could end up delivering more on the dollar than their private counterparts.

Suzy Khimm is a political reporter in the Washington bureau of Mother Jones.