Texas Prison Bid'ness

State lawmakers continue to review the budget and ways to cut costs and private prison contracts are on the table.  Scott Henson at Grits for Breakfast covered a recent House Appropriations hearing where Corrections Chairman Jim McReynolds asked about private prison contract renewals.  According to Grits:

Livingston said [cutting private prison contracts is] possible, since contracts covering the 12,000 or so private beds for which TDCJ contracts are 5-7 years old. Most of these are up within the coming year and all new contracts should be negotiated by mid-2011. Livingston said that in general, for every dollar increase in per-inmate costs represented a $4.5 million cost increase to TDCJ.

How the state will deal with it's budget in 2011 may certainly impact these contracts.  We will continue to monitor the situation and post developments.

Previous coverage:

• Grits Explores which Private Prison Contracts could be Terminated
• State Budget Problems may Lead to Private Prison Closure

The Corrections Corporation of America held an investor conference call last month.  During the call, CCA officials discussed current capacity issues and how they were profiteering from incarcerating thousands of men, women, and children in private prison beds.  

According to CCA reports, the private prison company continues to be the largest private prison profiteer by controlling 45% of all private prison beds in the nation.  CCA reported that they have 12,000 empty beds.  Additionally, the nation’s largest private prison company stated they have lost or terminated contracts totaling more than 7,500-beds in the past 16 months and expect to lose over 3,600-beds in 2010. 

During the investor call, CCA reps mentioned they have lobbyists working in six states trying to identify new contracts.  CCA reps stated that those states are about 14,000 persons over current capacity and are not planning to build any new prisons.  While they didn’t mention Texas specifically, CCA was reported to have spent $2 million lobbying elected officials – presumably to identify the profiteering activities they outlined on the call. 

A majority of the company’s revenue is from state clients at 60%; with Texas contracts representing 5.39% of CCA business.  Federal contracts comprise about 40% of CCA’s business; specifically consisting of contracts from United States Marshall Service (USMS), Immigration Custom and Enforcement (ICE), and the Bureau of Prisons (BOP). 

CCA still reports that their average per diem rates have declined because of the change in population at the T. Don Hutto prison in Taylor, Texas.  Folks will remember that ICE ended family detention at Hutto last year, and currently detains women in that correctional facility.  That change in population impacts CCA’s ability to charge a higher per diem and affects the company’s bottom line.

"Downscaling Prisons: Lessons from Four States," a new report from Justice Strategies and the Sentencing Project anaylzes the trend in down-sizing prisons.  The report

finds that four states - Kansas, Michigan, New Jersey, and New York - have reduced their prison populations by 5-20% since 1999 without any increases in crime. This came about at a time when the national prison population increased by 12%; and in six states it increased by more than 40%.  The reductions were achieved through a mix of legislative reforms and changes in practice by corrections and parole agencies.

On the call, CCA profiteers mentioned they are monitoring current state reforms.  What continues to be disconcerting is that they talked about those policy reforms in terms of risk to their business.  We will continue to monitor CCA as they watch these reforms.  Stay tuned. 

Our pal Scott at Grits for Breakfast, posted a list of private prison contract term obligations earlier this month.  Grits post was further exploration of a story we posted a few weeks ago regarding the Texas Department of Criminal Justice (TDC) looking to terminate private prison contracts.  Scott adds this analysis:

A couple of notable contracts stand out as potential candidates for cuts. For starters, the Mineral Wells facility was the one unit state Senate Criminal Justice Committee Chairman John Whitmire is interested in closing, and for security reasons, not because of the budget. The contract for that troubled facility ends conveniently around a month after the next legislative session starts, meaning there's a lot of time for budget pressures to build between now and then. What's more, the Board of Pardons and Parole hasn't really been using the Mineral Wells facility the way it was intended, so there's no special reason to keep it opened compared to, say, Intermediate Sanctions Facilities on the list.

Equally interesting to me is the fact that the Dawson State Jail's contract with Corrections Corporation of America is up for renewal next January. This ill-placed facility is located in downtown Dallas on the banks of the Trinity River in prime real estate the city hopes to redevelop. So the fact that Dawson's contract ends on January 15, 2011 is a significant date for the city of Dallas: If the state renews the contract, the proposed riverfront redevelopment could be put on hold indefinitely. It's possible, then, we may see members of the Dallas delegation and related development interests pushing for non-renewal, though certainly CCA will have its own lobbyists on the other side.

Hopefully, lawmakers will continue to consider the possibility of terminating contracts as they figure out what to do with unused prison beds.

After a lawsuit, a review and estimate, a cancelled bond vote, two potential locations, and many other small battles, the Grayson County debate over whether or not to privatize their downtown jail or build another, separate private facility was given an answer by County Judge Drue Bynum on February 24th. In September, Bynum was one of the four who voted affirmatively to hold a bond vote to the public, a bond vote that was very ambiguous and eventually thrown out.

Last week, a press conference held by Bynum yielded this information ("Grayson County Jail bond election cancelled," KXII, 24 February, 2010):

Judge Drue Bynum says enough is enough, and at a press conference today he said a bond issue to build a public jail is now also off the table. The future of the Grayson County jail is a seemingly never ending debate.

"This has become a volatile issue," said Judge Drue Bynum... "...I have heard from the people, they are tired of wrestling this bear, we have been dealing with this issue since 2001," said Judge Bynum.

The jail does need major renovations, but according to Commissioner Gene Short, The County is scheduled to pay off several debts in the coming months, freeing up money that can go toward remodeling the existing facility, without raising taxes...

..."We need to get past this and get a jail that is downtown, close to the courts, and is run by the Sheriff," said Magers. While getting a new jail built was the goal of many county leaders, Judge Bynum says the cost has become too high to continue. "We have got to figure out how to make lemonade out of lemons, and I am not going to go forward with an idea or an agenda at the sake of splitting this county open," said Bynum. 

Because the county has yet to say definitively that they won't build a private prison, the debate is technically still alive.  Still, the Commissioners have made a choice to not build a new jail (public or private) until they renovate their existing jail and pay off some outstanding debt. After that task is accomplished, it is still possible that they could build a new private facility. What is known is that there will not be a new jail at all until the aforementioned goals are reached. However, I imagine that if a new jail is built in the coming years, that it will be a public prison "run by the Sheriff" rather than run by a company.

This was a good choice by the Judge and Commissioners. Paying off their existing debt is the responsible action to take, rather than forcing through a private jail project. It was a rocky road to come to this decision, and I would bet that the privatization topic will arise again within the next few years once tempers have fallen. However, a congratulations is due to the people and officials of Grayson County for finding a responsible plan to jail renovation rather than constructing a new, privately-operated facility with the thinking that it will bring in jobs and money at no cost to the county. 

We will keep our eyes open for any new developments in the months and years to come.