'Private' Prisons Waste Money

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'Private' Prisons Waste Money

by Ari Armstrong, October 6, 2005

Sometimes it's a good idea for governments to contract out work. Sometimes it's not. For instance, contracted tax collection would be horrible and an open door to abuse. Regardless, it's confusing and, I think, inappropriate to refer to government-contracting of services as "privatization." When something is "private" or free-market, it involves money earned from willing contributers. Work contracted by the government involves coercively collected taxes.

I have deep reservations about contracting out prisons to otherwise-private companies. Wherever you are on that debate, though, surely we can agree that contract prisons should be held to reasonable standards of quality. Contract prisons in Colorado have fallen short and wasted some of the money transfered to them from taxpayers via the government. That fact alone doesn't imply that the government ought not contract out prisons, though it does point to some of the incentive problems.

A June 14, 2005, article by The Denver Post reports, "Privately owned prisons in Colorado fall far short of minimum safety and medical standards, possibly resulting in the deaths of two inmates and the early release of a sex offender, according to an audit released [June 13]. Part of the problem, the report from the state auditor's office said, is lax state oversight of the private prisons, which collected $53 million to house 2,800 inmates in 2004. The audit's key findings: Nine inmates died between January 2001 and September 2004. Two of those deaths may have been caused by physicians who changed medications without physically examining the inmates. A sexual offender was released from prison three months early because officials awarded him credits for treatment sessions he didn't attend. None of the five private prisons in Colorado have licensed medical clinics. Four private-prison employees had previous convictions for motor-vehicle theft, assault, criminal mischief and harassment. Staffing levels are lower at private prisons than at state institutions, with the worst ratio at the Crowley County prison, where inmates rioted last year" (Mark Couch, "Private prisons in Colo. remiss: Safety, medical shortfalls found").

The auditor's report details numerous other problems, ranging from lack of adequate treatment for mental illness to violations of Colorado law regarding the types of inmates that can be transferred to private prisons. The audit finds, "The Department [of Corrections] does not use a competitive bidding process to procure private correctional services..."

In a September, 2002, paper published by the Colorado Criminal Justice Reform Coalition, Stephen Raher cast doubt on the notion that contract prisons save the state money. He points to hidden costs. Others argue that contracting with outside prison firms does save the state money. Regardless, some of the money spent on "private" prisons has been wasted. Before the legislature asks for more tax money to fund additional projects, perhaps it should adequately manage essential programs already on its plate.

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