Texas Prison Bid'ness

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.

There is one fact that may impact prison capacity over the coming years – like other states -- Texas is dealing with serious budget problems. The Governor has issued his typical mandate -- asking state agencies to find ways to reduce their budgets by five-percent.  Additionally, legislative leaders in the state House and the Senate have suggested that closing prisons is definitely on the table as they work to manage the state’s correction budget.

"Closing prisons? It's absolutely on the table," said House Corrections Committee Chairman Jim McReynolds of Lufkin. "As tight as our budget situation looks, we cannot unravel the fledgling system of diversion and treatment programs that are paying big dividends now for the states. And there's only one other place to look prison operations."

The state's pending budget shortfall in 2011 may result in the closure of the privately run units.  Senator John Whitmire, who chairs the Criminal Justice Committee, has specifically mentioned the Mineral Wells lockup which is managed by the Corrections Corporation of America.

In recent weeks, Whitmire has publicly suggested that the state consider closing the privately run, 2,100-bed Mineral Wells Unit and perhaps aging prisons that are much more expensive to operate and maintain than newer ones.

The Texas Department of Criminal Justice submitted their plan for reducing the agency’s annual budget to the Governor.  The plan does not call for the closing of prison units – private or otherwise.  Rather the focus on cutting costs targets eliminating job positions and reallocating the community supervision funding that was appropriated in 2007 and has contributed to the flat prison population that makes closing prisons a possibility. 

However, according to an analysis by The Statesman, some $10.7 million in funding for 817 beds in privately run prisons would be eliminated, reducing the state’s prison capacity. 

Advocates that promote alternatives to incarceration are asking agency officials and state policymakers to close prisons rather than reduce community corrections funding. 

Looks like this may shape up to be quite a battle in the 2011 legislature.  Time will tell if there is political viability that will lead in the actual closing of state prison units.  We will keep y’all posted as talks develop. 

Another year has passed here at Texas Prison Bid'ness, and what an exciting year it has been. As we have done in the past, the bloggers here at TPB would like to recap our favorite or perhaps the most memorable stories/topics over the past year.  Over the next few days, we'll be posting 2009's top five stories related to private prisons.

The end of family detention at Hutto was TPB's biggest story of 2009. 

 #1 Family detention ends at CCA's T. Don Hutto detention center

By the beginning of 2009, perhaps no private prison in the country had become as controversial as Corrections Corporation of America's T. Don Hutto family detention center in Taylor, Texas.  The former medium-security prison was converted into a family detention center in 2006, and had been the site of dozens of vigils, a major lawsuit, two critical documentary films, intense media scrutiny, and a national movement to end family detention. 

So, when the government decided to stop sending immigrant families to Hutto, it was big news. The New York Times lead with this line on August 6th:

[T]he government will stop sending families to the T. Don Hutto Residential Center, a former state prison near Austin, Tex., that drew an American Civil Liberties Union lawsuit and scathing news coverage for putting young children behind razor wire. ...

The decision to stop sending families there - and to set aside plans for three new family detention centers - is the Obama administration's clearest departure from its predecessor's immigration enforcement policies."

Although the facility continues to hold immigrant women, the August  announcement was a huge victory for the movement to end family detention.  The efforts to close Hutto have morphed into a broader movement against private immigrant detention centers, including vigils and protests at the Willacy County Processing Center, the Houston Processing Center, and other facilities around the state. Here's to a 2010 with more victories like the one at Hutto!

The Corrections Corporation of America (CCA) held its latest investor call earlier this month.  There were no big surprises on the call except that the company reported on how changes at the T. Don Hutto facility were impacting CCA’s bottom line.

We have covered previous CCA investor calls this year.  Given the nation’s current outlook, the private prison profiteers are not planning on building any new speculative prisons right now.  During the call they mentioned over 8,000 beds that are going unused.  This is a significant portion of the more than 86,800 beds that comprise the company’s inventory in its 44-owned prisons or 21-managed only facilities. 

During the call, company officials discussed the recession and the impact of state budgets on their ability to find new customers.  State prisons continue to be overcrowded – according to reports 29 states are operating at 100% capacity or more.  CCA has an interesting take on the state prison crisis.  Rather than building new prisons or even obtaining new contracts, many states – like Texas – have responded with policy changes.  In some instances those changes involve parole reforms and identifying changes to early release practices.  But CCA officials believe that states are having a harder time implementing these changes than officials thought they would.  So they are watching state policy changes pretty closely to determine changes in demand and potential new customers. 

As a result of the state outlook, CCA officials are focusing on federal customers.  Their primary customer targets are Immigration Customs and Enforcement (ICE), United States Marshall Service (USMS), and the Bureau of Prisons (BOP).  The BOP continues to operate at 137% capacity.  CCA thinks there may be an opportunity to consolidate detention beds in centralized facilities – currently about 12,000 detainees are imprisoned in over 150 jails that do not meet new detention standards.  As a result, the company believes there is an opportunity to obtain new contracts with ICE. 

The most relevant issue for Texas may be changes in family detention at Hutto. Now that the medium security prison is detaining immigrant women it seems that CCA can’t charge the same per diem rate to ICE as when it locked up families including small children.  The CCA profiteers seemed most concerned.

The economic outlook continues to delay speculative prison construction.  But it hasn’t changed the world view of the profit minded folks at CCA.  Let’s hope that stakeholders who don’t stand to profit will continue to challenge how we respond to crime and not listen to the folks at CCA or other companies.