The Youngstown Vindicator
December 11, 2011
Ohio was facing an $8 billion budget shortfall in 2010 when Gov. John Kasich took office. He proposed an ambitious and unprecedented plan to balance the corrections portion of the budget — sell five prisons to private companies.
Lake Erie Corrections Institution, located in Ashtabula County, was the only prison sold. It’s the first state prison in the nation to be sold to a private company.
Correction Corporation of America (CCA) bought the facility for $72.7 million. The state will pay CCA $44.25 per inmate per day in addition to an annual $3.8 million ownership fee.
CCA may be familiar to many because the company operates the Northeast Ohio Correctional Center in Youngstown. The state’s ability to sell only one of five prisons slated for sale was not a concern for the Department of Rehabilitation and Correction. “It’s not a disappointment at all,” Annette Chambers-Smith, deputy director of administration told the Cleveland Plain-Dealer, “... we thought we would need to sell all five of them to net $50 million.”
CCA operates 60 facilities in 19 states and the District of Columbia. Those facilities have more than 80,000 beds and currently house about 75,000 offenders. CCA owns 44 of the facilities it operates, representing more than half of all the private prison beds nationwide. According to the company website, CCA with its 17,000 employees is the fifth-largest corrections system in the nation, behind only the federal government and three states.
Privatization may seem like a promising way to generate revenue and cut costs in difficult economic times. Ohio’s prisons are over capacity. As of October, Ohio’s 30 prisons had the capacity to house 38,196 inmates, but actually confined 50,334.
There is an incarceration bubble in America. That bubble may burst as budget woes force states to reduce prison populations andthe federal government look for alternatives to an immigration policy that has been a boon to private prisons.
Prison reduction efforts are obviously not part of the package offered by corporate-run prisons. They have no incentive to explore alternatives to incarceration, such as electronic monitoring, half-way houses or other diversionary efforts to reduce the number of non-violent offenders behind bars.
Ohio, like many states, is trying to reduce its prison population. Nonviolent offenders often serve the shortest sentences. There are about 12,000 inmates in Ohio serving state sentences of less than one year. Some estimate that reducing short term sentences in state prison could trim inmate population by about 4,000 within four years.
The Texas-based criminal justice blog Grits for Breakfast recently reprinted portions of CCA’s latest annaul 10-K report filed with the U.S. Securities and Exchange Commission. CCA acknowledged that the company is “dependent upon the governmental agencies with which we have contracts to provide inmates for our managed facilities. We cannot control occupancy levels at our managed facilities ... a decrease in our occupancy rates could cause a decrease in revenues and profitability.”
The report continues, “The demand for our facilities and services could be adversely affected by…leniency in conviction or parole standards and sentencing practices.”
CCA is not ignoring the threat of leniency or a reduction in occupancy. According the Chattanoogan, citing a report from the National Institute on Money in State Politics, CCA hired 199 lobbyists in 32 states between 2003 and 2010. On the federal level, CCA spent more than $18 million on lobbying between 1999 and 2009.
CCA’s Ohio lobbyist, Don Thibaut, served as Gov. Kasich’s chief of staff when he was in Congress, says The Associated Press. The connections go beyond a lobbyist. Kasich’s corrections director Gary C. Mohr spent five years as a consultant for CCA.
The incarceration bubble, like the real estate bubble before it, will burst, which could mean trouble for Ohio taxpayers.
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