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CCA investor call reports an excess of 12,500 beds

The Corrections Corporation of America (CCA) held its quarterly conference call last week.  We have previously reported that CCA has excess capacity and that trend continues; company officials mentioned they had unoccupied 12,500 beds in their system.  As a result there are no immediate plans to build new CCA prison beds.

CCA currently operates 65 prisons, including 44 company-owned facilities that include 89,000 beds in 19 states and the District of Columbia.  Currently, the company’s biggest customers are the state of California and the federal Bureau of Prisons (BOP).  

During the call, CCA officials made assumptions that states and the federal government would soon need new beds to accommodate a growing prison population despite current budget constraints.  The BOP is reportedly over capacity by 36%; while CCA claimed state prison systems exceed capacity by 12,000 prisoners.  
Company representatives went on to mention that while current state prison demand is anemic, potential state customers are not authorizing new beds making the company’s excess capacity readily available for new contracts.
It’s a good thing that while CCA profiteers are struggling to find new customers for their excess supply that state legislators are rethinking criminal justice policies.  In fact, the Bureau of Justice Statistics reported that state prison systems declined by nearly 3,000 beds in 2009; prison populations declined in 20 states.  While tight budgets are a salient feature they are not the sole contributing factor.  Our own Judy Greene co-authored a report earlier this year along with my Sentencing Project colleague Marc Mauer, entitled Downscaling Prisons: Lessons from Four States.  In that report, Judy and Marc document legislative and administrative reforms that predate the current recession and contributed to the states of New York, New Jersey, Michigan, and Kansas all reducing their prison populations while maintaining public safety. 

While there is movement at the state level, federal demand remains steady driven significantly by the need for capacity in the immigrant detention system.  During the CCA call, company officials mentioned that Immigration and Customs Enforcement (ICE) population numbers 33,000 persons in detention.  To meet demand,  BOP issued several requests for proposals to add new beds to their system.  These requests seek to contract with existing facilities and not new ones.  One proposal request would add a new prison in either Texas, Arizona, or Oklahoma and would require a capacity of 1,200 beds.
CCA’s excess supply of prison beds shows that policy reforms - legislative or administrative -- can reduce the need for prison capacity.  It further indicates that state policy makers can make other choices when confronted with how to maintain public safety.  But, the steady demand from the federal government indicates that there continues to be an over-reliance on confinement as social policy -- the reason why the United States has the highest incarceration rate in the world.  But steps can be taken at the federal level - in immigrant detention and the prison system to reduce overall capacity and undermine CCA’s efforts to fill those 12,500 beds.

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