Readers of Texas Prison Bid'ness are well aware of the some of the major problems that private prison contractor GEO Group has had in Texas. Still, the company has continued to expand by winning contracts, buying competitors, and expanding into new markets. The company holds quarterly conference calls to discuss its earnings and outlook. The next GEO call will be this Wednesday, May 4, at 2pm EST/1pm in most of Texas. According to the company's press release:
The GEO Group, Inc. (NYSE:GEO) ("GEO") will release its first quarter 2011 financial results on Wednesday, May 4, 2011 before the market opens. GEO has scheduled a conference call and simultaneous webcast for 2:00 PM (Eastern Time) on Wednesday, May 4, 2011.
Hosting the call for GEO will be George C. Zoley, Chairman, Chief Executive Officer and Founder, Brian R. Evans, Senior Vice President and Chief Financial Officer, John M. Hurley, President, GEO Detention & Corrections, and Jorge A. Dominicis, President, GEO Care.
To participate in the teleconference on Wednesday, May 4, 2011 at 2:00 PM (Eastern Time), please contact one of the following numbers 5 minutes prior to the scheduled start time.
Conference Call Participant Pass-code: 65944659
Anyone can call in to listen to the call, and it's often archived online after it occurs. It's well worth listening to these calls to get a glimpse of how the private prison industry views increased incarceration and detention as a business opportunity. We'll provide analysis of the call on Wednesday.
NPR's John Burnett has an excellent piece today ("Private Prison Promises Leave Texas Towns In Trouble," March 28) about several Texas communities that have been left high and dry by private prison deals gone bad. The story is the second part of a two-part series on private prisons - Friday's story chronicled the GEO Group's extremely troubled Walnut Grove youth prison in Mississippi.
Today's story follows the fortunes of Littlefield, home to the Bill Clayton Detention Center, formerly operated by GEO Group. That community has been paying back loans it floated to build the prison facility before its closure in 2008. According to the story:
"For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city.
... To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked.
The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out. 'It was never voted on by the citizens of Littlefield; [it] is stuck in their craw,' says Carl Enloe, retired from Atmos Energy. 'They have to pay for it. And the people who's got it going are all up and gone and they left us...'
'...Holdin' the bag!' says Tommy Kelton, another Atmos retiree, completing the sentence."
The backstory to the Bill Clayton Detention Center is no less troubling. The state of Idaho pulled its prisoners after the suicide of Randall McCullough, who, according to news reports, had spent more than a year in solitary confinement. GEO was later hit with a massive lawsuit over in the McCullough case. Since the facility's closure, Littlefield has had its bond ratings dropped and turned to two different private prison companies in an effort to fill the prison beds. Idaho had pulled its prisoners from another GEO-operated facility in Texas - the Dickens County Correctional Center - in 2007 after an investigation of the suicide of Idaho prisoner Scot Noble Payne found "squalid" conditions.
And Littlefield is certainly not alone in troubles brought about after private prison deals went bad. The NPR story today tells of how the CEC-operated Jack Harwell Detention Center in McLennan County sits half-empty after county spent $49 million to build it. The sitting McLennan County Sheriff was on the payroll of CEC at the time the county voted to finance the construction of the facility.
And, Scot Henson over at Grits for Breakfast recently chronicled a long list of privately operated jails that are seriously under-capacity due to a declining prison population. Of course, there is an obvious public interest in declining prison populations and low crime rates. However, private prison corporations are always looking for new groups of people to put behind bars. Right now, companies like CCA and GEO Group are betting on increased immigrant detention, but the trend hasn't carried far enough to save towns with speculative prisons like Littlefield.
Texas' current budget deficit might result in a termination of private prison contracts. According to the Financial Times:
The Texas budget plan includes closing 2,000 places in private prisons and more than 1,500 job losses.
However, according to the TDCJ budget summary, it seems that these cuts may be to treatment prison beds and not hard prison beds. The cuts mentioned involve beds in substance abuse and intermediate sanction facilities.
These are still prisons that require many low-level, non-violent prisoners to be away from their families and communities. However, if law makers really want to reduce corrections spending they should be exploring opportunities for sentencing reform that continue to reduce the number of people who enter into Texas prisons and their length of stay.
We will continue to monitor the budget's impact on private prison capacity as it develops.
With the new year comes the newly proposed Texas budget plans. While seemingly no department or sector was spared from the widespread cuts, we were surprised to hear that private prison cutbacks were on the table in this tough-on-crime state:
In public safety and corrections programs, the budget report recommends shutting down a unit in Sugar Land, three Texas Youth Commission lockups and 2,000 private prison beds, a move that could close at least two additional lockups. About 1,562 prison jobs were also chopped.
Probation programs would see funding cut by 20 percent, parole supervision would be cut by almost 9 percent, and the agency's construction and maintenance funding could be cut by 83 percent, along with 90 jobs. The Victims Services Division would be eliminated. (Kate Alexander, Austin American-Statesman, "Spartan budget plan calls for broad cuts," January 19, 2011).
When browsing around the actual budget plan document itself, the Legislative Budget Board looks to other states that, in an attempt to balance the state budget, have also cut private prison contracts:
Other states, including New York, Colorado, North Carolina, and Kansas, closed units with excess capacity, left correctional positions vacant, reduced correctional staffing levels, reclassified facilities and ofenders, and terminated contracts for private facility operations. In most cases, decisions on prison closures, reclassifications, and changes in staffing levels necessary to achieve the desired level of savings were made by the chief executive leadership of the states’ Department of Corrections under direction by the Legislature or governor. North Carolina and Kansas both experienced savings of approximately $23 million from the realignment decisions, while New York’s changes resulted in savings of $8.4 million per year. (page 337)
We will continue to monitor the 2012-2013 budget plans while trying to find more specific information regarding which private prison contracts (if any) are on the chopping block.