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More private prison debt problems – this time in Montgomery County

Last weekend, the Conroe Courier reported (Feds investigate 2 county facilities, July 7, 2012) that Montgomery County’s decision to construct the Joe Corley Detention Facility may have left the County with a large financial burden.  The facility, operated by The Geo Group, was constructed using $45 million in bonds exempt from federal taxes.  But, there was a catch.  As the Courier reported:

“the approval by the Internal Revenue Service in 2006 was based on a ruling request stating federal prisoners – including those from the U.S. Marshal’s Office and Immigrations and Customs Enforcement – would occupy an average of 70 percent of the 1,100 beds in the facility, according to county documents. … In that same ruling request … after the initial five-year operating period, ‘(the) county expects that the number of county prisoners or prisoners of other local governmental entities in the county housed in the Jail will exceed 30 percent of the beds. Eventually, County expects that non-federal prisoners will occupy close to 100 percent of the beds in the Jail.’”

Well, the facility opened in August 2008 and guess how many county inmates are in the facility?  Zero.     

Unfortunately for the county, and despite similar predicaments faced by other Texas counties, the county commissioners, according to County Judge Alan B. Sadler, “did not anticipate” the potential loss of its tax-exempt status.  According to Sadler, if the county loses its tax-exempt status “the tax implications would be huge.”

Stay tuned to Texas Prison Bid’ness for updates in Montgomery County.