Out of Control Policy Blog

Forbes: Strong Outlook for Private Prisons

Per Forbes, the outlook for the private prison industry remains strong, as the ongoing fiscal crunch is likely to prompt more states to look for opportunities to cut costs through correctional services privatization (emphasis mine):

One group of contractors, though, may benefit from states' newfound attention to cost-cutting and budgeting. Publicly traded companies that run prisons—the business is known as private corrections—could see their portfolios increase dramatically as states look to cut costs, writes RBC analyst Jamie Sullivan. Some state prison systems are bursting with inmates and could shift the burden to private contractors to relieve overcrowding. One sign that these firms have become indispensable to state governments is that although corrections budgets are falling in states that use private prison firms, the amount going to those firms is increasing.

Three firms dominate the business of running prisons: Corrections Corp. of America, The Geo Group and Cornell Companies. CCA, the biggest of the three, owns and runs most of its own prisons in 19 states. Geo mixes in some overseas contracts as well as mental health and residential programs. Cornell adds youth detention and group homes for adults. All three get about a third of their business from federal agencies. [...]

The gap in state finances is big, $183 billion in the next two years by some reckonings and tax revenues are falling rapidly in states that boomed with the real estate or financial markets. That has led governments in states that use private firms to slash prison budgets by about 2.9% this year but the amount of money going to those contractors is up 2.6%, says Sullivan, who estimates that the private firms offer states savings of 15% to 20%.

As for winning new customers, Sullivan notes that among states not already using the firms, between 11 and 17 have as many or more inmates than their facilities can handle with little money available to build new prisons.

» Reason Foundation's Corrections Privatization Research and Commentary

Leonard Gilroy is Director of Government Reform

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Comments to "Forbes: Strong Outlook for Private Prisons":

strayarts | July 26, 2009, 1:03pm | #

Even if one does not ask or pretends not to see the rope and the flashing red flag draped around the philosophical question standing solemnly at attention in the middle of the room, it remains apparent that the mere presence of a private “for profit” driven prison business in our country undermines the U.S Constitution and subsequently the credibility of the American criminal justice system. In fact, until all private prisons in America have been abolished and outlawed, “the promise” of fairness and justice at every level of this country’s judicial system will remain unattainable. We must restore the principles and the vacant promise of our judicial system. Our government cannot continue to "job-out" its obligation and neglect its duty to the individuals confined in the correctional and rehabilitation facilities throughout this nation, nor can it ignore the will of the people that it was designed to serve and protect. There is urgent need for the good people of this country to emerge from the shadows of indifference, apathy, cynicism, fear, and those other dark places that we migrate to when we are overwhelmed by frustration and the loss of hope.
My hope is that you will support the National Public Service Council to Abolish Private Prisons (NPSCTAPP) with a show of solidarity by signing "The Single Voice Petition"

Please visit our website for further information: http://www.npsctapp.blogspot.com

–Ahma Daeus
"Practicing Humanity Without A License"…

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