Saturday, March 10, 2012

Ohio's deal with private prison promises 90% occupancy

As states struggle to reduce prison overcrowding and tight budgets, a private prison management company, Corrections Corporation of America, is offering to buy prisons in exchange for a controversial guarantee that the governments maintain a 90% occupancy rate for at least 20 years, reported the USA Today.

Last fall CCA purchased the 1,798-bed Lake Erie Correctional Institution from the state of Ohio for $72.7 million. Ohio officials lauded the September transaction, saying that private management of the facility would save a projected $3 million annually.  Ohio is the first state to sell an existing prison to a private corporation.

Linda Janes, chief of staff for the Ohio Department of Rehabilitation and Correction, said the purchase came at time when the state was facing a $8 billion shortfall. The $72.7 million prison purchase was aimed at helping to fill a $188 million deficit within the corrections agency, reported the USA Today.

Ohio's deal requires the state to maintain a 90% occupancy rate, but Janes said that provision remains in effect for 18 months — not 20 years — before it can be renegotiated. As part of the deal, Ohio pays the company a monthly fee, totaling $3.8 million per year.

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