States Tap Private Prisons

States Tap Private Prisons
July 1, 2004

Prison privatization remains an attractive option for governors and state legislators seeking to control spending and balance budgets. In addition to recently announced agreements between Corrections Corporation of America (CCA) and the states of Minnesota and North Dakota (see "Privatization of Prisons Continues in Minnesota and North Dakota"), state legislatures from California to Virginia have taken up prison outsourcing measures.

Lawmakers in Virginia recently passed House Bill 1042, which requires the state's department of corrections to conduct a "cost-benefit analysis or public-private competition" for any new prison to be built in the state.

Virginia Delegate Chris Saxman (R-Staunton), who authored HB 1042, said on its passage, "The benefits of competition are well known: better quality at a lower cost. Even when you factor in the need to maintain public safety, you can still find opportunities for increasing performance and lowering costs."

Virginia currently has one private prison and has contracted for some of the medical operations in others.

In California, Governor Arnold Schwarzenegger (R) has put private prisons back on the table, after former Governor Gray Davis (D) abruptly ended three contracts with private community correctional centers in 2003. "It is a priority of my administration to reform the California prison system," said Schwarzenegger, who said his investigation into reform options will include the use of privatization.

Colorado, long a believer in private prisons, has increased its use of privatization by agreeing to send a population of up to 128 Colorado maximum-security inmates to CCA's Tallahatchie County Correctional Facility, located in Tutwiler, Mississippi. The one-year contract is effective through June 30, 2005, with four one-year options for extension.

The most complicated extension of prison privatization is occurring in the state of Florida, where a commission is being phased out and a department is taking over responsibilities.

The Florida Correctional Privatization Commission will complete its official duties on July 1. In one of its final actions, the commission has renewed for another year contracts for three of the state's five private prisons.

After July 1, corrections contracts in Florida will be monitored and administered through the Department of Management Services (DMS). The one-year private prison extension now places all of the prison contracts on the same time frame and will allow DMS to reevaluate and renegotiate all of the contracts at the same time.

According to the Tallahassee Democrat, CCA has the contracts for operating Florida's Gadsden, Bay, and Lake City facilities, while GEO Group operates the Moore Haven and South Bay facilities.

South Carolina lawmakers are considering privatizing medical operations within the state's correctional system. According to a January 2004 Associated Press report, the South Carolina Corrections Department pays almost twice the national average health care cost for sick inmates. Corrections Director Jon Ozmint said, "The prisons system spends $56 million annually on inmate health care, 19 percent of its budget." The national average is 10 percent.


Geoffrey F. Segal is director of privatization and government reform at Reason Foundation. His email address is geoffrey.segal@reason.org.