Reason Foundation

New at Reason: Privatization Developments in Criminal Justice and Corrections

Posted on May 6, 2013, 3:55pm | Leonard Gilroy

The rollout of Reason Foundation's Annual Privatization Report 2013 continues today with the release of the Criminal Justice and Corrections section—authored by Leonard Gilroy, Harris Kenny, Alexander Volokh and Andrew Livingston—which provides an overview of the latest on privatization and public-private partnerships in criminal justice and corrections. Topics include:

• 2012 Corrections Privatization Overview
• State and International Corrections Privatization Update
• State and Local Correctional Healthcare Privatization Update
• ANALYSIS: Recent Developments in the Federal Civil-Rights Liability of Federal Private Prisons
• FOCUS: The Emergence of Social Impact Bonds: Paying for Success in Social Service Innovation
• FOCUS: Colorado, Washington State Vote to Tax and Regulate Recreational Marijuana for Adults

» Annual Privatization Report 2013: Criminal Justice and Corrections
» Complete Annual Privatization Report 2013

Florida's Misstep on Capital Punishment

Posted on April 30, 2013, 1:41pm | Lauren Galik

While a number of states are reconsidering or repealing the death penalty, the Florida Senate yesterday passed legislation to accelerate the state’s capital punishment process. Called the “Timely Justice Act,” the Senate passed the bill with a vote of 28-10.The Florida House passed the bill with an 84-34 vote last Thursday. Governor Rick Scott is expected to sign the changes into law.

Reuters reports:

The "Timely Justice Act" sets deadlines for condemned killers to file appeals, and for the state to proceed with issuing warrants after the Florida Supreme Court upholds death sentences.

It also sets competency standards for lawyers handling cases. To reduce the number of appeals alleging incompetent counsel, any attorney twice found to have provided "constitutionally deficient representation" will be suspended from handling death appeals for five years.

Reuters notes that Florida has more inmates on death row than any other state besides California, and has executed more inmates than any other state except for Texas. In Florida, it takes an average of thirteen years for a death row inmate to be executed after being sentenced to death. Moreover, Florida is the only state allowing juries to recommend death sentences by a simple majority of 7 to 5.

Supporters of Florida’s Timely Justice Act say numerous people have sat on Florida's death row for longer than 30 years, and that such a long waiting period “makes a mockery of our justice system,” as Republican Sen. Rob Bradley has stated. However, of the current 406 inmates on Florida’s death row, less than thirty were sentenced before 1983.

Many opposed to the bill have raised concerns that speeding up the legal appeals process for death row inmates could lead to the execution of innocent prisoners. Indeed, Florida has a history of sentencing innocent men to death. According to the Death Penalty Information Center, Florida has exonerated twenty-four inmates from death row since 1973—more than any other state in the country. What’s more, some of the inmates who have been exonerated were in prison for several decades prior to the emergence of additional evidence that proved their innocence. As Reason’s Adrian Moore put it in his California Voters' Guide, “We know the system is imperfect and sometimes condemns innocent people. Death is permanent; life in prison offers a chance.”

Recently, there has been a national trend away from capital punishment, with five states voting to repeal the death penalty in the past six years. According to Richard Dieter of the Death Penalty Information Center in Washington, D.C., “The number of sentences imposed in the country has declined by 75 percent since 1990 and only nine states carried out an execution last year."

That trend is a welcome one. Unfortunately it is clear that lawmakers in Florida have chosen to go their own way—for now. According to Rep. Matt Gaetz (R-Shalimar), lead sponsor of the House bill, “Only God can judge. But we can sure set up the meeting.”

A Step Toward More Rational Sentencing Policy

Posted on April 26, 2013, 4:19pm | Lauren Galik

On Wednesday, Representatives Bobby Scott (D-VA) and Thomas Massie (R-KY) introduced a bipartisan bill titled the Justice Safety Valve Act of 2013. Identical to the legislation introduced last month by Senators Rand Paul (R-KY) and Patrick Leahy (D-VT), this bill would authorize federal judges to pass sentences below federal mandatory minimums in cases where assigning the mandatory sentence would be excessive, and where a shorter sentence would not endanger public safety.

A press release on Rep. Massie’s website reports:

The Justice Safety Valve Act of 2013 would expand the current “safety valve” provision to include all federal crimes, allowing federal judges to tailor sentences on a case-by-case basis. This would also reduce the bloated federal prison population.

Essentially then, this bill would return some discretion to federal judges by no longer requiring them to sentence first-time and/or low-level nonviolent offenders to prison terms intended for high-level drug kingpins and major criminals. The fact is that existing federal mandatory minimum sentences result in many low-level nonviolent drug offenders receiving lengthy prison terms that do not fit their crimes.

The introduction of this legislation comes at a time when the federal prison population is nearly nine times larger than it was in 1980, facilities are increasingly overcrowded (39% over the rated capacity in 2011), and the system has becoming more expensive to maintain. Mandatory minimum sentences for nonviolent drug offenses are largely to blame for this, with inmates convicted for these type of offenses making up nearly half (47.3 percent) of all federal prisoners as well as the largest portion of newly admitted federal inmates.

The Justice Safety Valve Act of 2013 would help ensure that these types of offenders are not sent to prison for longer than is necessary to keep society safe, therefore saving prison space and resources for those who pose a larger threat to society, such as violent criminals.

While the Justice Safety Valve Act of 2013 neither repeals federal mandatory minimum sentences nor requires judges to ignore them if it would be appropriate to do so—both of which would be good policies—it nevertheless represents a welcome step toward reducing the size of the federal prison population, as well as the costs that come with maintaining it, all without compromising on public safety.

Discussing Prison Privatization on HuffPost Live (VIDEO)

Posted on February 8, 2013, 1:20am | Harris Kenny

I recently had the opportunity to appear on HuffPost Live, The Huffington Post's new Internet-based video streaming network, to discuss how federal and state policymakers partner with private prison operators (video embedded below).

The idea of partnering with for-profit operators can be challenging to some, however it is important to note public sector agencies (and their employees) don't work for free. In fact, as the host of this program notes, they share many of the same incentives as for-profit prison operators. Meaningful criminal justice reform seeks to change these incentives and move towards performance-based outcomes on critical metrics like inmate education, recidivism reduction and more. My colleagues Adrian Moore and Leonard Gilroy outlined this new approach, dubbed Corrections 2.0, in a study of the same name available online here. Well-structured public-private partnerships also allow accountability through rigorously enforced contracts.

For more of Reason Foundation's work on corrections and criminal justice, see the Prisons and Corrections Research Archive online here.

  Follow Harris Kenny on Twitter @harriskenny

Understanding Correctional Privatization in Florida

Posted on October 9, 2012, 8:33pm | Harris Kenny

In a recent piece Andrew Marra of The Palm Beach Post ominously warns:

The specter of privatizing more (Florida) state prisons makes many uncomfortable. For-profit companies would want more inmates in prison, despite bipartisan calls for sentencing reform. Then there are questions about security and accountability.

However, Marra's piece misses the mark in several important ways. I submitted a letter to the editor that was not published in print, but is available online here. In short, my piece explains that correctional outcomes in Florida are improving, in part because of privatization.

First, these improvements can be measured in cost savings:

The Florida Department of Management Services recently reported that privately operated facilities cost taxpayers 10-27 percent less to operate than comparable state prisons.

Second, they can be measured in improved quality:

A Florida Chamber of Commerce evaluation of private and public facilities in south Florida finds private partners have four times as many inmates participating in educational, vocational and life skills programming (79.3 percent versus 21.3 percent). 

My piece concludes:

(Privatization) is an effective policy tool that has been thoughtfully integrated into the system over decades; making all Floridians—not only taxpayers and inmates—better off.

For related work, see Reason Foundation's Prisons and Corrections Research Archive.

Union-Propagated Red Herrings Continue to Mar Corrections Research

Posted on June 13, 2012, 2:11pm | Harris Kenny

My latest reason.org commentary entitled Union-Propogated Red Herrings Continue to Mar Corrections Research begins:

Yesterday Mike Hall posted on AFL-CIO Now’s In the States blog about a recent report entitled, Prison Bed Profiteers: How Corporations Are Reshaping Criminal Justice in the U.S. from the National Council on Crime and Delinquency (NCCD). Unfortunately NCCD falls for red herrings propagated by public employee unions like the AFL-CIO, while ignoring pressing issues facing the U.S. criminal justice system. Specifically, they blame the private sector for problems that are more strongly correlated with the criminal justice system as a whole.

After explaining that anti-privatization critics present some sound criticisms of the U.S. criminal justice system as a whole, but miss the mark by focusing on private sector partners, the piece continues:

Meaningful reform requires an all-of-the-above strategy, not a distracting debate over public vs. private sector prison operation. This can best be addressed by considering the three elements of the U.S. criminal justice system: criminal sentencing, facility environments and recidivism.

The piece goes on to explore how reform strategies for each of these elements of the system and highlights related Reason Foundation research. The piece concludes:

Ultimately, the private sector has proven to be a capable partner for the public sector and there’s no reason to ignore that success. As is always the case with privatization, rigorous contracting is necessary to achieve optimal outcomes. Blaming the private sector solves nothing. Instead, an all-of-the-above strategy is necessary to address the major challenges facing the U.S. criminal justice system.

For more, see the full piece available online here, and visit Reason Foundation's Prisons and Corrections Research Archive.

Innovators in Action: Ohio Department of Rehabilitation and Correction Director Gary Mohr

Posted on May 31, 2012, 9:00am | Leonard Gilroy

In the latest installment of Reason Foundation's Innovators in Action series, I interview Gary Mohr, Director of the Ohio Department of Rehabilitation and Correction (ODRC), on creating a culture of competition in corrections.

In September 2011, the ODRC announced the results of a groundbreaking procurement that will see the state raise $72 million from the sale of one state prison to a private operator—the first sale of its kind in the nation—and two others turned over to private management, for an estimated $13 million in annualized cost savings. One additional facility formerly under private sector operation was also brought back under in-house operation.

Notably, the state’s biennial budget signed in June 2011 authorized ODRC to sell up to five prisons to help close the state’s budget deficit and reduce corrections costs, though ODRC ultimately opted to pursue a mix of asset sales, outsourced facility operations and facility consolidation/insourcing.

In the interview—available here— Mohr discusses the rationale behind this large-scale and historic procurement, how ODRC uses the private sector in corrections and the role of privatization and competition in driving positive change throughout the state-run correctional system.

Here's an excerpt:

Leonard Gilroy, Reason Foundation: Last year, Ohio made history by becoming the first state to sell a prison to a private operator, at the same time that you both insourced and outsourced the operation of several other prisons. Can you describe the rationale for those moves, and what benefits do you expect?

Gary Mohr, Director, Ohio Department of Corrections: In a labor-oriented state, when we talk about outsourcing and privatization, it’s always a contentious topic. But my vision all along was this: we’re going to reform our system, which means that we need some catalysts for change. And my vision has been that you use competing forces. When you put in people that are earnestly concerned about competing and have a solid framework—which is the request for proposals (RFP)—what you can do is not just save resources, but you can literally enhance all of the operations by ratcheting up the standards and ratcheting up the best practices that can be created from both the public sector and multiple private vendors.

So in terms of reforming, we wanted to develop systems to reduce violence, and we wanted to develop programming to reduce recidivism, because that should be our measure, quite frankly. And what we have seen with this initiative is that we have reduced violence, and we’ve reduced the gang violence by 25 percent if we look at January through March of 2011 compared to the same period in 2012.

Now was that exclusively due to privatization? No. But I believe that the element of competition plays an important role in that.

Second, I’ve been a believer in decentralized unit management. I was involved in putting it in place in Ohio in the mid-1980s, and I know it is the most effective way to safely and proactively operate prison settings. And the benefit of outsourcing is that while Ohio had essentially deleted unit management, the ability to outsource immediately put in the RFP the requirement that these facilities will be fully unit managed to allow them to get a jump-start on shifting back to unit management. This served as an incentive for rest of state facilities to get back into the unit management way of doing business.

And along with that, we’re continuing to enhance the training and providers of evidence-based programs that have direct contact with inmates.

So those were huge for us as I looked at reforming our system to a safer, more proactive, and more evidence-based program delivery methodology, and certainly served in that positive, competitive sense.

Read the rest of the interview here for more of Gary Mohr's fresh and enlightening insights on bringing a culture of competition to corrections to drive better outcomes in offender rehabilitation and public safety. For more details on Ohio's recent correctional privatization initiatives, see Reason Foundation's Annual Privatization Report 2011.

For more interviews in the Innovators in Action 2012 series here.

APR 2011: Corrections and Public Safety

Posted on May 2, 2012, 5:35pm | Harris Kenny

The rollout of Reason Foundation's Annual Privatization Report 2011 (APR 2011) concluded this week with the Corrections and Public Safety section, which provides an overview of the latest news and trends in public-private partnerships in corrections and public safety. Highlights include:

• According to the most recent data compiled by the Bureau of Justice Statistics, the total U.S. prison population declined for the first time in nearly four decades. The decrease is attributed largely to a decline in new prison admissions relative to prison releases in state prisons.
• Approximately 8 percent of the total prison population is currently housed in privately owned and/or operated facilities, while the remaining 92 percent continue to be housed in government-run facilities.
• In the 2011 case Brown v. Plata, the U.S. Supreme Court ruled California’s correctional system is providing unconstitutional mental and medical care to inmates. At the time, California held about 156,000 inmates in a system designed for less than 80,000 inmates – nearly twice the design capacity. In response, the court ordered the state reduce its system-wide prison population at or below an average of 137.5 percent of prison design capacity.
• A new form of public-private partnership is emerging in the United Kingdom and Florida that could dramatically reduce recidivism and transform corrections, whereby contractors would be compensated for achieving specific performance goals in reducing recidivism and improving rehabilitation. Florida is exploring this model for an 18-county region and would apply dozens of performance measures to quantify outcomes.
• In September 2011, the Ohio Department of Rehabilitation and Correction, under the guidance of Gov. John Kasich, announced the results of a large-scale procurement that will see the state raise $72 million from the sale of one state prison to a private operator—the first sale of its kind in the nation—and two others turned over to private management, for an estimated $13 million in annualized cost savings.
• Lawmakers in Texas, Florida, Arizona, North Carolina, Pennsylvania and elsewhere are pursuing meaningfully expanding the role the private sector plays in inmate healthcare delivery.

» Annual Privatization Report 2011: Corrections and Public Safety [pdf, 1.4 MB]

» Complete Annual Privatization Report 2011 homepage

The Year 2011 in State Government Privatization and Public-Private Partnerships

Posted on April 24, 2012, 3:53pm | Leonard Gilroy

The rollout of Reason Foundation's Annual Privatization Report 2011 begins today with the release of the State Government Privatization section, which I co-authored with Reason's Lisa Snell. This section of APR 2011 provides an overview of the latest on privatization and public-private partnerships in state government. Topics include:

• In New Jersey, the Christie administration continued to expand its portfolio of privatization initiatives in 2011, which included highway maintenance, manual toll collection, state-run horse racing facilities, vehicle fleet operation, the NJ Network TV station and more.
• Two ratings agencies upgraded Louisiana's credit rating in 2011, citing the state's strong fiscal management, strong employment levels and sustainable levels of public debt. Privatization remained a central feature of the Jindal administration's fiscal management in 2011, with progress on some of its major healthcare privatization initiatives in Medicaid delivery, public employee health care and behavioral health services.
• New Ohio Gov. John Kasich has already taken significant steps to advance privatization as a key component of his governing agenda, including privatizing the state's economic development agency, selling a state prison to a private operator, and hiring advisors to analyze the potential privatization of the Ohio Turnpike and Ohio Lottery.
• In late 2011, Washington State became the first state since the end of Prohibition in 1932 to fully privatize the sale and distribution of liquor, and several other states, including Pennsylvania and Virginia, considered similar moves. Today, 33 states have completely private wholesale and retail trade in liquor, while 17 states still retain a state-run wholesale and/or retail liquor monopoly.
• Puerto Rico continued to emerge as a leader in attracting private investment in public infrastructure, with public-private partnerships undertaken or underway in 2011 that include a modernization of 100 K-12 schools, a $1.5 billion toll road lease and an ongoing procurement for a long-term lease of San Juan's international airport.
• In 2011, both Texas and Connecticut enacted broad-ranging laws to authorize private sector financing for infrastructure assets.
• As state park systems continued to face significant fiscal pressures in 2011, policymakers in states like Arizona, Utah and California took steps to expand the use of private for-profit and nonprofit operators to take over state parks threatened with closure.
• Illinois' groundbreaking lottery privatization program got underway in 2011, an initiative designed to generate an additional $1 billion in revenues to the state over the next five years. Policymakers in California, New Jersey, and Ohio are considering similar moves.
• After years of implementation challenges that prompted a dramatic overhaul, Indiana's privatized welfare eligibility modernization program significantly improved its performance in 2011, prompting federal officials to authorize its expansion throughout the state and award the state $1.6 million in recognition of its progress at reducing its error rates for food stamp processing.
• Other topics include public-private partnerships in higher education, an update on state child welfare privatization systems and more.

» Annual Privatization Report 2011: State Government
» Complete Annual Privatization Report 2011 homepage

Gov. Cuomo Ushers Through $132.6 billion NY State Budget

Posted on April 2, 2012, 2:35pm | Harris Kenny

Last week New York Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver announced the early passage of the state’s fiscal year 2013 budget. The Legislature approved the $132.6 billion budget on Friday March 30. According to an article by Thomas Kaplan in The New York Times:

The voting on Friday marked the first time the Legislature had approved a state spending plan with more than 24 hours to spare since 1983 – when Mr. Cuomo’s father, former Gov. Mario M. Cuomo, passed his first budget.

Four major stories jump out of this budget deal.

1. Fiscal Responsibility: Lawmakers closed a multi-billion dollar deficit ($2 billion, or 3.5% of the state budget, according to the Center on Budget and Policy Priorities) without raising taxes or imposing fees. State spending growth held to 2% for the second year in a row, while net spending (state and local) was reduced for the second year in a row thanks in part to tax caps on local governments. State spending will total roughly $88.8 billion in FY 2013. Most impressively, out year deficits have been reduced by a cumulative $72 billion since Gov. Cuomo took office.
2. Government Reform: Lawmakers are empowering the Office of General Services (OGS) to serve as a clearinghouse for state agencies, thereby transforming procurement by facilitating bulk purchase common goods and services through centralized contracts. Officials will leverage the state’s purchasing power to save $100 million in FY 2013 and a projected $755 million over five years. They’re also eliminating 25 state boards and commissions that are no longer active or whose missions have been completed or become redundant, such as the Department of State’s Barbers Board. (See the full list of eliminated boards and commissions available online here, for more on the new OGS initiatives see here).
3. Transportation Infrastructure: Lawmakers are enhancing their focus on transportation infrastructure. The budget establishes the New York Works Task Force to coordinate capital plans across state government and funds the New York Works program with $232 million in state capital funds and $917 in federal funds for $1.2 billion in new spending. This is in addition to $1.6 billion already allocated this year to core transportation capital investment. And most importantly, these funds are in addition to the advancement of the Tappan Zee Bridge replacement project. (For more on the Tappan Zee Bridge replacement project, see my colleague Baruch Feigenbaum’s latest Out of Control Policy Blog post here.)
4. Criminal Justice: The Budget serves as the launching point for Gov. Cuomo’s Close to Home Initiative, which seeks to reform the state’s juvenile justice facility system. Specifically it allows New York City officials to take responsibility for the case of lower risk youth who come from the City. This applies to youth in non-secure and limited security facilities. The aim of the program is to reduce crime and improve outcomes for youth and the communities in which they live by providing targeted educational, mental health, substance abuse and other service needs without compromising public safety. The program is expected to save $4.5 million in FY 2013 and $27 million in FY 2014, in part by reducing the state’s juvenile justice system capacity by 140 beds in FY 2013 and 180 beds in FY 2014. (For more on the Close to Home Initiative see a write-up by the New York State Juvenile Justice Advisory Group here.)

Overall there are some major accomplishments in this budget. Kudos to state policymakers for finding common ground and balancing innovation with fiscal responsibility along the way. Once considered in the dysfucntional company of states like California and Illinois, New York appears to be taking serious strides in the right direction.

Corrections Still Impacting FL Budget Debate

Posted on March 5, 2012, 11:13pm | Harris Kenny

The Bradenton Herald reports:

Racing against the clock, legislators labored Sunday to settle spending differences and agree on a $70 billion budget with five days left in the session. They made progress, but today will be another marathon day as lawmakers left some of the most contentious issues to the final hours…

Following questions by Democrats, lawmakers removed budget language that would have allowed the Department of Corrections to move money between budget categories “for outsourcing efforts.”

In the most divisive vote of the 2012 session, the Senate voted 21-19 to reject a proposed privatization of all prisons in 18 South Florida counties. Some anti-privatization lawmakers and lobbyists were on high alert for a possible last-minute maneuver to keep privatization alive, but it didn’t happen.

Republicans said they were not giving the prison system authority to expand privatization, and when Senate Democratic Leader Nan Rich of Weston asked why the language was needed, Republicans quickly eliminate it.

“The budget is really pretty thin on cash,” said Senate Budget Chairman JD Alexander, R-Lake Wales. “I don’t think anybody’s quite satisfied, but I think we’re making good progress on a budget that will work for Florida.”

While the 18-county effort has garnered all the headlines, the state Department of Corrections is currently engaged in a less publicized reform effort to partner with the private sector to improve healthcare delivery within the state’s 100,000-inmate system. As I explained last week in a reason.org commentary entitled, “Florida Correctional Healthcare Reform in Jeopardy”:

The appeal of the legislature’s correctional healthcare reform effort is simple: private companies that compete to provide medical and mental health services to inmates can save the state money, provide high quality care, and give policymakers more accurate understanding of what it costs to run the state’s correctional system. In other words, competition disrupts an otherwise stagnant bureaucracy to find better ways to do things.

However like the aforementioned 18-county program, this innovative approach to correctional healthcare service delivery is facing legal challenges after the Florida Nurses Association filed a lawsuit in Leon County Circuit Court hoping to stop reform. The critics are ultimately on the wrong side of this issue. As I explain in the piece:

Government officials around the world are partnering with the private sector because it works. By abandoning the single-provider government service model, and embracing competition, policymakers have witnessed improvements in both cost savings and quality of service. Indiana, for example, has saved tens of millions of dollars in correctional healthcare costs through privatization, and corrections officials there have used privatization to lower food service costs by nearly one third.

The piece concludes:

Improving Florida’s correctional system is a daunting challenge and no one action can accomplish this goal. However, policymakers have already taken the first step by encouraging a culture of reform. Allowing private companies to partner in providing correctional healthcare is a common sense solution that’s as symbolically significant as it is substantive. The state Department of Corrections is exploring sensible new ways of doing the public’s work, something that should be encouraged, not stifled.

Read the full commentary available online here. For more of Reason’s work on corrections in Florida see here, here and here.

Prison Privatization Failure in Florida Shows Clout of Union

Posted on February 19, 2012, 11:51am | Samuel Staley

The failure of a signature privatization effort for Florida Gov. Rick Scott earlier this week was a telling sign of the continued clout of unions in the policy marking process. Gov. Scott and his supporters in the legislature tried to keep the debate about sound management. In fact, Scott's proposal even said no privatization would occur unless the state could save a minimum of 7 percent.

Unfortunately, an opposition that included all Democrats and nine Republicans successfully carried the day by arguing, in effect, government is really a big jobs program. As the Miami Herald reported (Feb 24, 2012):

"Senators debated privatization for nearly three hours, and opponents’ floor speeches often showed more passion. Rather than talk about numbers, they talked about people, such as the treatment of correctional officers, whose starting salary is $34,000 a year and who have not received an across-the-board pay raise for the past six years.

“What’s wrong with state employees?” said Sen. Dennis Jones, R-Seminole. “We should be taking care of them, rather than kicking them under the bus.”

"Prison guards displaced by privatization could have “bumped” less experienced officers from their jobs upstate. But, Jones said, with the current housing crisis, many are trapped in their homes and couldn’t sell them if they wanted."

While some argued that the savings were "unproven," the reality is that savings can never be "proven" unless the services are actually put out for bid in the first place. Nothing required the state to privatize even the savings weren't there in the proposals.

For more, see the Reason Foundation policy study by Len Gilroy and Adrian Moore Corrections 2.0, Len's recent review on corrections privatizations for our annual Privatization Report, and my recent podcast with Capitol Vanguard. 

PA Lawmakers Should Encourage Prison Health Competition, Not Ban It

Posted on January 20, 2012, 1:03pm | Harris Kenny

States across the U.S. continue to face budget woes. The latest budget estimates from the Center on Budget and Policy Priorities show 29 states are projected to have, or have addressed, budget deficits totaling $44 billion in FY 2013. However as my colleague Anthony Randazzo and I explained last month, long-range U.S. Census Bureau data suggests state and local governments have a spending problem – not a revenue problem. 

Pennsylvania fits all too comfortably within this narrative as its lawmakers are currently grappling with a $500 million budget deficit for FY 2013. My colleague Leonard Gilroy and I explain in our latest commentary entitled Lawmakers Should Encourage Prison Health Competition, Not Ban It:

(T)he last thing fiscally responsible policymakers should be doing is protecting sacred cows in government. Unfortunately, those trying to advance legislation to protect the jobs of Commonwealth prison nurses are attempting just that.

The legislation in question is House Bill 1985, which would prevent state funds appropriated to the Department of Corrections from being used to privatizing prison nursing services. There’s one glaring problem though: the state already partners with a range of private sector correctional healthcare professionals, including: physicians, mid-level providers, and nurses in some facilities. 

The bill is a reactionary attempt to stifle a request for proposals (RFP) issued by the Department of Corrections seeking two bids for comparative purposes, as we explain in the piece:

(O)ne that would maintain the current scope of outsourced services, and another that would expand the scope to include additional nursing positions. In essence, the corrections department is testing the market to see whether they should stay on their current path or if they can deliver more value to taxpayers by including more nurses.

Ultimately, the Pennsylvania Department of Corrections is doing their due diligence in considering every way to deliver high quality healthcare to inmates at an affordable cost to taxpayers. At a time of ongoing budget woes one would think they’d receive praise, not prying, from state lawmakers. For more, read the full piece available online here.

Uncertainty Looms As California Corrections “Realignment” Plan Begins Saturday

Posted on September 26, 2011, 12:44pm | Harris Kenny

Tracey Kaplan of the San Jose Mercury News reports:

To trim its bulging prison population and cut costs, California is about to gamble on a strategy no other state has tried – unload the responsibility for punishing and rehabilitating thousands of nonviolent felons from the state prison system to local communities.

The state's new massive "realignment" plan – which begins Saturday – amounts to a dramatic retreat from California's costly, tough-on-crime, lock-'em-up approach. No matter how slowly the new strategy unfolds, it will ultimately put more low-level offenders on the streets sooner than they would be under the current rules, either because they are enrolled in rehabilitation programs outside the jail walls, or are serving shorter periods in jail or on post-release supervision.

"It's the biggest change in the criminal justice system in 35 years," since the state switched to imposing fixed-term sentences on most crimes, said Judge Phil Pennypacker, who presides over the criminal division of Santa Clara County Superior Court.

For those unfamiliar, this abrupt policy change is coming on the heels of the Supreme Court’s recent Brown v. Plata decision, which found California’s in-state publicly operated prisons are providing unconstitutional medical and mental health care to inmates. Notably, California’s thousands of inmates incarcerated in privately operated prisons were not included in this ruling. (For more on Brown v. Plata, see my previous post here.)

Many of the concerns over realignment first arose when enabling legislation, specifically California Assembly Bill 11-109, was signed in April. AB 109 allows for a felony offender to be punished “by imprisonment in a county jail for more than one year.” (For more on AB 109 see my previous post here). Kaplan continues:

With the startup of realignment just days away, judges, sheriffs, lawyers and probation chiefs throughout California have been frantically meeting to figure out the complex rules. Before long, nearly everyone in county jail will be eligible to get out after serving half their sentence if they behave; currently, jail inmates have to serve two-thirds. Parolees who comply with the conditions of their release also can earn their freedom sooner – in six months, rather than a year.

And sheriffs in some of the 32 counties with court-imposed caps on jail populations or overcrowded jails are likely to release more inmates early.

Though that's not a problem for most Bay Area counties, the lack of jail beds is particularly acute in parts of the Central Valley and Southern California, especially Los Angeles County, which collectively released more than 68,000 sentenced inmates in 2009 before they were due to be freed.

Next she highlights fears that early inmate release programs may lead to an increase in property crimes, reversing California’s recent plunge in crime rate down to 1960’s levels. At the same time, advocates for realignment argue a new approach may lead to lower recidivism as communities provide alternatives to incarceration. While the outcome is difficult to predict, funding remains uncertain too. Kaplan writes:

Counties were given state funds totaling $400 million this fiscal year to spend on whatever mix of incarceration, supervision and programs they choose. State finance analysts say realignment will save about $53 million in prison costs this fiscal year, $125 million next year and $338 million the year after, even as the counties' allocation rises to about $1 billion in 2013-14.

But even if counties had the capacity or the staff to supervise more inmates, the state is not giving them enough money to simply lock them up. Incarceration is an expensive option; in the Bay Area, jail costs about $77 a day, compared with up to $49 for electronic monitoring. Drug treatment costs a little more than jail – $88 a day for a 90-day residential program – but if it works, it saves taxpayers money in the long run.

Many counties complain the funding falls far short of covering the cost of alternative programs – and they worry the state could cut it even more as the budget crisis worsens. The governor's first attempt to get a constitutional amendment on the ballot guaranteeing future funding failed, but he vowed last week to get such an amendment on the November 2012 ballot – even if he has to launch an initiative campaign himself.

Finally, she concludes with revealing data from a recent Los Angeles Times and University of Southern California poll that found:

• ”80 percent of voters support realignment, though it’s unclear whether they will agree to tax themselves to fund it or to designate a portion of the state’s general fund to cover the cost.
• Nearly 70 percent even approve the early release of some low-level nonviolent offenders.
• In a major shift, voters are fed up with prison spending… [Which] produces the second-highest recidivism rate in the country: 67.5 percent.”

The full article is a must-read and is available online here.

In a recent reason.org commentary entitled “Brown v. Plata Ruling Highlights Need for Reform (Not Tax Increases)” Adam Summers and I outline three recommendations for California policymakers:

1. Pursue criminal sentencing reform.
2. Make recidivism reduction a priority.
3. Expand use of privately operated facilities.

The full reason.org commentary is available online here. For more, read Reason Foundation’s 2010 study entitled Public Private Partnerships for Corrections in California: Bridging the Gap Between Crisis and Reform.

Public Employees Spurn Concessions in Connecticut

Posted on July 5, 2011, 3:59pm | Harris Kenny

According to the latest budget analysis by the Center for Budget and Policy Priorities, Connecticut faces a $2.9 billion budget deficit in FY 2012 and a $2.7 billion budget deficit in FY 2013. In order to balance the budget, Gov. Malloy emphasized a two-pronged approach of tax increases and negotiated concessions for public spending cuts.

In February the governor introduced an unprecedented slate of tax increases through which the Hartford Courant reports, “Taxes would increase on virtually all taxable items.” (For more on this proposal see my previous post here.) Lawmakers complied in passing $2.6 billion in tax increases that Bloomberg describes as “the biggest increase in state history.” However, the second prong of his approach failed to materialize. Rank-and-file union members rejected a range of wage and benefit concessions negotiated with labor leaders leaving Gov. Malloy with a $1.6 billion budget deficit to balance.

Last week lawmakers granted the governor authority to cut spending in all three branches of state government by as much as 10 percent over the next three months. If last week is any indicator, it’s going to be a contentious three months. An estimated 5,500 state workers face layoffs with layoff notices being sent shortly after rank-and-file union members rejected the concessions, while another 1,000 unfilled positions will be eliminated.

Gov. Malloy is pursuing expanding the use of privatization in addition to layoffs. He’s requested legislative changes to the State Contracting Standards Board, specifically suspending legal restrictions and procedures inhibiting privatization. He told newspaper editorial writers and editors in a conference call last Wednesday:

I'm asking for additional ability to privatize services. There are a whole bunch of people in the world who think they are the only people who know how to operate a plow. I got news for you; other people know how to operate a plow.

According to the Hartford Courant:

(This) was an apparent reference to Department of Transportation snowplow operators, who are part of one of the state employee unions that voted in recent weeks to reject the concessions agreement that would have provided a four-year no-layoff guarantee in exchange for changes in employee health care and pension benefits.

The governor faces a daunting task and is moving forward with several reform efforts. First, he fulfilled a promise made in his state of the state address to divest Bradley International Airport into an independent entity. This is a proven and welcome reform that will save the state money, improve airport operations and reduce taxpayer liability. The newly established Connecticut Airport Authority now has day-to-day control of the airport. Second, he is moving forward with closing the Bergin Correctional Institution in Mansfield-Storrs, Connecticut. After ending public operation of this facility, Gov. Malloy should consider leasing or outright selling the facility to a private operator interested in using it.

For ideas on how to cut spending and streamline government, Connecticut policymakers should consult Privatizing “Yellow Pages” Government, a thorough study released this spring identifying dozens of opportunities for privatization in neighboring Pennsylvania. The study is a collaboration between Reason Foundation and Commonwealth Foundation and is available online here.

ICYMI: Brown v. Plata Ruling Highlights Need for Reform (Not Tax Increases)

Posted on June 3, 2011, 3:31pm | Harris Kenny

In case you missed it, yesterday my colleague Adam Summers and I co-authored a Reason.org commentary (available online here) explaining that in light of the Supreme Court’s recent Brown v. Plata ruling, a multi-faceted approach is necessary to finally reform California’s correctional system. The Court ruled that California must reduce overcrowding at its prisons in order to improve conditions currently so poor as to be unconstitutional.

Notes from the Brown v. Plata ruling reveal just how bad conditions are in California’s prisons, for example:

• In one state-run prison, 200 inmates are living in a gymnasium sometimes monitored by only two or three guards;
• In another, 54 inmates share one toilet;
• Suicidal inmates have been held for prolonged periods in telephone booth sized cages without toilets; and
• In one case, an inmate was held in a cage (similar to the one described above) for 24 hours, standing in a pool of his own urine, unresponsive and nearly catatonic.

To bring California’s correctional system closer to adequate—and constitutional—conditions, the state should adopt the following reforms:

• Pursue criminal sentencing reform;
• Make recidivism reduction a priority; and
• Expand use of privately operated facilities.

As we conclude in the piece, kicking the can down the road is no longer an option, and officials in Sacramento can’t simply tax their way out of this crisis. Read the full commentary (available online here). For more, see Reason Foundation’s latest corrections research: Public-Private Partnerships for Corrections in California: Bridging the Gap Between Crisis and Reform and Corrections 2.0.

New Hampshire Exploring Prison Privatization

Posted on May 20, 2011, 5:27pm | Harris Kenny

Earlier today I had the privilege of being a guest on The Exchange with Laura Knoy, an hour-long daily call-in show focused on news and public affairs hosted by New Hampshire Public Radio. Todays show covers the use of privately operated prisons across the U.S. and around the world. It also includes discussion of whether New Hampshire should move forward with proposed plans to send inmates to privately operated prisons. Full-length audio of the episode is available online here.

Note: At one point in the interview I say, “In a majority of privately operated prisons there are state employees overseeing operations within that prison 24/7.” To clarify, I mean that privately operated prisons remain under careful watch by states through state employees in the facility, closed circuit television recordings and/or through meticulous documentation of daily operation.

The conversation spans many aspects of America’s correctional system and includes discussion of how public-private partnerships are being used to effectively deliver correctional services both in the U.S. and around the world. There is special focus on how a new “Corrections 2.0” approach is being explored in the United Kingdom and Florida. Under this next-level approach, the financial incentives of the private sector align with government’s goals of maintaining public safety, reducing recidivism, improving rehabilitation and lowering costs. (For more on the Corrections 2.0 approach, see this study by my colleagues Leonard Gilroy and Adrian Moore.)

During the show we were only able to scratch the surface on the issues facing New Hampshire in providing correctional services. According to the Council of State Governments Justice Center, over the past ten years New Hampshire’s prison population has increased 31%, while lawmakers have doubled spending on corrections. Meanwhile the Department of Corrections is expected to be the only state agency whose funding will increase over the next biennium.

What have New Hampshire taxpayers gotten for their money? The Council of State Governments Justice Center recently published a revealing study, some highlights of their findings include:

• The number of women admitted to prison has increased dramatically, while women’s recidivism rates are also on the rise.
• The number of parolees who fail on supervision and are revoked has increased 50% since 2000.
• Recidivism rates are highest amongst 17-19 year olds, with 60% returning back to prison after release.
• The state has inadequate integrated mental health and substance abuse services, creating significant challenges for police officers and emergency first responders. 

Last year New Hampshire lawmakers passed Senate Bill 500 into law, which makes it so nonviolent criminals will be released after serving 120 percent of their minimum prison sentences. All prisoners will be paroled at least nine months before their minimum prison sentences, and all parole violators would face 90 days back in jail in a special program designed to re-engage them in their parole plans. The legislature’s intention with SB 500 is to address the failure of the prison system to adequately prepare inmates for re-entry into society, however states cannot exclusively legislate recidivism reduction. A Corrections 2.0 approach that embraces partnering with the private sector to individually meet the needs of inmates should also be used.

More recently State Senator John Morse, Chairman of the Senate Finance Committee, has publicly sought to cut costs for the Department of Corrections. The Nashua Telegraph reports he proposed relocating 600 inmates to private facilities in order to realize around $11 million in savings over the next biennium. Sen. Morse also asked lawmakers to study the state’s entire corrections system saying, “The reality is, the department (of corrections) can’t continue to grow and grow and grow in costs.” It’s worth noting these cuts serve to reduce the Department of Corrections’ budget increase, and the agency is still expected to be the only one in the state to receive a funding increase (2% over the next biennium.)

New Hampshire is not alone in facing these difficult policy questions. In fact, Granite State policymakers need look no further than Vermont for better understanding of how to work with the private sector to find cost-savings. Vermont has the third highest percentage (30%) of inmates kept in privately operated prisons of any state. Vermont is effectively partnering with the private sector to deliver more cost-effective correctional services without sacrificing quality, why isn’t New Hampshire?

Full-length audio of the aforementioned interview is available online here. For more on public-private partnerships in corrections, see Reason Foundation's Corrections Policy Research Archive.

CA Gov. Brown Signs Inmate Transfer Bill AB 109

Posted on April 6, 2011, 12:40pm | Harris Kenny

On Monday California Governor Jerry Brown signed AB 109 into law, which amends the state’s options for imprisonment of offenders that commit felonies. The Los Angeles Times reports that this bill will impact tens of thousands of felons convicted of nonviolent crimes. Specifically, AB 109:

Would provide that a felony is a crime that is punishable with death, by imprisonment in the state prison, or notwithstanding any other provision of law, by imprisonment in a county jail for more than one year. The bill would generally provide that felonies are punishable by imprisonment in a county jail for 16 months, or 2 or 3 years. The bill provides exceptions to imprisonment in a county jail for a variety of felonies, including serious felonies and violent felonies, as defined, felonies requiring registration as a sex offender, and when the defendant has a prior conviction for a serious or violent felony, or a felony subjecting the defendant to registration as a sex offender, among other exceptions [emphasis added].

The bill’s opponents, including many Republican legislators, argue that this bill will undermine the justice system. Los Angeles County District Attorney Steve Cooley told the Los Angeles Times, “County jails are also crowded, and were never designed to offer the same rehabilitation programs as state prisons. Public safety requires appropriate incarceration and deterrence... and both of those will suffer under this proposal.”

Conversely, supporters believe this bill will provide a number of benefits, as Gov. Brown said in a press release, “Cycling these offenders through state prisons wastes money, aggravates crowded conditions, thwarts rehabilitation and impedes local law enforcement.” California Department of Corrections and Rehabilitation Secretary Matt Cate supports the measure, telling the Los Angeles Times:

(California’s state prisons) took in 47,000 inmates last year who were parole violators sentenced to 90 days or less… it makes no sense to go through the elaborate intake process, which takes an average of three months, for inmates who are going to spend only a few months behind bars. (California’s state prison) system is the most expensive in the free world… You can’t do worse [emphasis added].

Arguably the most pressing benefit of AB109 would be relieving California’s chronically crowded state prisons. As recently as 2009 the Golden State’s state prison system was at 178% of design capacity, far in excess of the national average of 110% among states. Of course, this benefit would be undermined if the overcrowding were simply transferred to County prisons, so the details of how this will be implemented remain unseen. Further, Associated Press reports AB 109 hinges on scarce funds to offset increased local government costs that may not be available in FY 2012.

Last year Reason Foundation published Public-Private Partnerships for Corrections in California, a study that provides a number of policy tools to reduce the state prison system’s overcrowding crisis and improve efficiency. Many of the policy tools included in the study are being implemented today (measures like AB109 were not included in the study). For a comprehensive update of California’s prison system, see Reason Foundation’s Annual Privatization Report 2010: Corrections.

New at Reason: Annual Privatization Report 2010

Posted on February 10, 2011, 3:32pm | Leonard Gilroy

I'm pleased to announce that today marks the launch of Reason Foundation's Annual Privatization Report 2010 (reason.org/apr2010). Now in its 24th year of publication, the Annual Privatization Report is the world's longest running and most comprehensive report on privatization news, developments and trends.

Readers will notice that we've made a significant change with APR 2010, publishing it as a series of reports arranged by topic, rather than one consolidated report as in previous years. We expect that this will make it easier to use as a resource and find the information you're looking for. The individual sections of APR 2010—which will be released over the next two weeks—include:

• Air Transportation
• Surface Transportation
• Federal Privatization
• State Privatization
• Local Privatization
• Education
• Telecommunications
• Corrections
• Water

We started the rollout today with the APR 2010 Air Transportation section. It provides a comprehensive overview of the latest news on domestic and international airport privatization, the privatization of airport security - including passenger and baggage screening and the federal Registered Traveler program, and domestic and international trends in air traffic control reform. 

» Annual Privatization Report 2010: Air Transportation [pdf, 800kB]

» Complete Annual Privatization Report 2010

Corrections PPPs Delivering Cost Savings in Florida

Posted on February 4, 2011, 1:05pm | Leonard Gilroy

In this post, I'd like to address a question recently posed by a reader regarding Reason Foundation's January policy brief proposing a continuum of care in corrections through public-private partnerships (PPPs). We used Florida as a case study in the paper, estimating that shifting to a continuum of care PPP model in two Florida Department of Corrections (FDOC) regions could potentially save the state between 7-10% in operating costs. However, because most state correctional systems do not typically break down their own fully allocated costs at the individual facility level, we relied on average per diems (by facility type) reported by FDOC to estimate the total facility operating costs in each region, multiplying the number of beds in each facility by the average per diem for that type of facility (e.g., prison, work camp, private prison, etc.) across the whole district.

The reader noted that the per diem we used for "correctional institutions" (e.g., prisons)—$42.31 per inmate per day-was lower than the per diem we used for "private prisons" ($45.53), prompting the question, "doesn't that show that private prisons cost more than public prisons?"

The answer is no, for two reasons. First, the average per diems reported by FDOC are indeed that—averages. They were useful for preparing a broad estimate of costs by facility at a regionwide scale in the absence of internal state accounting that breaks down facility-level costs in that manner, but as averages, they inherently smooth out a significant degree of variation in costs at the facility level. Hence, they're not meant to (or designed to) provide an apples-to-apples comparison of like-versus-like facilities in the public and private sector. That's the sort of question that demands a more rigorous full-cost accounting analysis at the individual facility level, which was not the purpose of the FDOC average per diems. Simplifying, the former attempts an apples-to-apples analysis, while the FDOC averages were essentially averaged bundles of apples and oranges mixed. In fact, when averaged out, the higher per diem figure for privately-operated institutions makes some intuitive sense, as private prison population in Florida includes a higher proportion of higher cost female beds—FDOC estimates average per diems of over $60 per inmate per day in female institutions, for example—and private institutions are often required to offer more intensive education and substance abuse programming than found in state-run facilities.

Second, the average per diems for state-operated facilities do not account for indirect administrative costs, which the Florida DOC estimates to be $3.54 daily per inmate. On the other hand, state-operated facilities include specialty institutions that house chronically-ill offenders and death row inmates. All these differences—which play out at the facility level—have to be accounted for when comparing privately-operated prison per diem costs with state-operated prison per diem costs. Average per diem costs are useful in approximating broad costs among many facilities, but they're neither designed nor intended to serve as a basis for evaluating the comparative costs between public and private facilities.

For that, what's needed are facility-level cost comparisons prepared on an apples-to-apples basis, and a large-scale correctional PPP procurement in Florida in 2010 offers a powerful example of the cost savings achievable through PPPs. For context, under Florida law the privatization of prison operations cannot be approved without a minimum cost savings threshold of 7%, which has been consistently met by private prison operators since the 1990s and has been validated and verified by the state in advance of the private corrections contracts in place in Florida today.

In 2010, the Florida Department of Management Services (FDMS) entered into an "invitation to negotiate" process to award contracts for the private management and operation of four state prisons—the 985-bed Bay Correctional Facility, the 1,520-bed Gadsden Correctional Facility, the 1884-bed Graceville Correctional Facility, and the 985-bed Moore Haven Correctional Facility. During the procurement process, FDMS assembled a team of in-house and corrections department experts to conduct a cost comparison that established a benchmark per diem for each facility based on what it would cost the state to operate them.

For private bids to be considered compliant, they had to beat the benchmark state per diems at each facility by at least 7%. As shown in the table below, the winning bids at each facility came in at cost savings levels ranging between 14-27%. Taken together, these private facilities will therefore be operated at an annual cost savings of $19.8 million, or more than $59.5 million over the three-year term of the contracts.

2010 Florida Correctional Procurement Cost-Comparison Summary

Source: Florida Department of Management Services, Memorandum by Negotiation Team (ITN# 09/10-017) to DMS Secretary Linda South ("Recommendation of Award"), April 13, 2010, available here.

Real-world evidence like this supports our suggestion that the private sector could deliver the cost savings estimated in our paper for Florida. Our estimated annual cost savings range of 7% to 10% is based on Florida and other states' past experiences with prison privatization and may be a conservative assumption, given the notably higher cost savings in the real world comparison discussed above. Results like that in the recent past help make a compelling case for the expanded use of correctional PPPs in Florida, given the magnitude of the state's ongoing fiscal challenges.

For more details on Florida's 2010 procurement and cost comparison analysis, see here. And for more on Reason's work on privatization and corrections, see here.

Flawed AZ Study Skews Dialogue on Corrections Privatization

Posted on November 4, 2010, 7:20pm | Harris Kenny

Earlier this year the Arizona Department of Corrections (ADC) released a provocative, but flawed study claiming that per capita prisoner costs in Arizona's private prisons are higher than state-run prisons. However, there were a number of methodological problems with this widely-cited study that led to inaccurate public-private cost comparisons.

Unfortunately, the Arizona's Auditor General relied on the flawed ADC study in its recent performance audit of the department. The audit admittedly "did not assess the (ADC's) method for adjusting the per capita rates for comparing state-operated and private prison costs."

But that hasn't stopped the media from reporting it. Just yesterday, the Auditor General's review was cited by Arizona CBS affiliate KPHO in a report entitled, "Audit: Private Prisons Cost Slightly More." A spokesperson for Gov. Jan Brewer responded to the KPHO story saying the governor has commissioned another prison cost-comparison study.

The governor's office should be commended for taking a closer look at this data, because it seems to have skewed the dialogue on privatization of correctional facilities in that state. Earlier today I posted a commentary on Reason.org detailing the mistakes made in the ADC's original study -- that commentary is available here.

Cutting Prison Costs in California

Posted on April 9, 2010, 12:27pm | Leonard Gilroy

Jon Coupal, president of the Howard Jarvis Taxpayers Association, and I have a column in the Orange County Register and LA Daily News on how much prison costs contribute to the California budget deficit and how private prisons can be part of the solution:

The Legislative Analyst's Office found that correctional officers account for one in seven state employees and eat up a disproportionately large 40 percent of state personnel spending. The overcrowded state prisons house 167,000 inmates in a system designed for 84,000. As a result, federal judges have ordered California to release 40,000 inmates. And a federal receiver has taken over control of California's prison health care services due to a class action lawsuit and the poor quality of medical care in the system.

California is spending more than $8 billion on corrections this year, more than 10 percent of the massive state budget. State taxpayers spend about $133 per inmate - every day. Texas, which has the second largest inmate population after California, spends less than one-third of that amount - about $42.50 per inmate per day. One reason Texas spends so much less than California on prisons is its extensive use of public-private partnerships. Since 1989, Texas' annual data shows its cost savings from private prisons have averaged 15 percent a year. During that time, there was not a single year in which government-run prisons matched or were below the private prison costs.

A new Reason Foundation-Howard Jarvis Taxpayers Foundation study finds that modest expansion of California's current use of public-private partnerships in corrections would save taxpayers nearly $2 billion over the next five years. Additionally, more aggressive use of private prisons and contracting out some operations of existing prison facilities would save another $400million to $1.2 billion each year.

Former NM Gov. Gary Johnson on Competitive Contracting in Corrections

Posted on February 20, 2010, 2:06pm | Leonard Gilroy

In case you missed it, our recent Reason.tv interview with former New Mexico Gov. Gary Johnson is well worth watching. In addition to discussing his latest endeavor, the Our America Initiative, and a range of economic, social and foreign policy issues, he reflects back on his two-terms as Governor and the experience of downsizing government in real life.

When asked specifically about his use of competitive contracting in corrections (at the 15:04 mark), he was very clear on the results:

"…in New Mexico we had over 600 prisoners housed out of state, we were under a federal court order—federal consent decree—regarding our prisons and how they should be run. I ended up—as a result of a legislature that was not wanting to address this issue—ended up privatizing over half of the state's prisons. Comparing apples to apples, the private side produced the same goods and services for two-thirds the price. To me that was good government. And that's what happened."

There's a powerful lesson here for states like California that are facing massive challenges with their correctional systems and budgets.

Watch the whole video for more thoughts from a government executive who managed to leave office while also leaving to his successor—and taxpayers—a smaller government than the one he himself had inherited. Seems like most Americans wish their own elected officials would be doing the same right now.

Louisiana Privatizing Correctional Pharmacy Services

Posted on February 8, 2010, 12:04pm | Leonard Gilroy

Per the Daily Advertiser, Louisiana is privatizing pharmacy services in its state prisons to cut the costs of providing inmate medications in half:

Louisiana prisons are hiring an outside drug company to provide medication to inmates, rather than the two dozen pharmacists currently on staff.

The Civil Service Commission agreed Wednesday to let the state Department of Corrections privatize pharmacy services at all state-run adult prisons, as a way to save money.

Department Undersecretary Thomas Bickham says the move will cut the costs of providing medications to prisoners annually from $2.5 million to $1.2 million.

This is one of the recommendations of the Commission on Streamlining Government, discussed here.

Puerto Rico, King County (WA) Extend Offender Monitoring Contracts

Posted on January 5, 2010, 8:12pm | Leonard Gilroy

Late last year, both Puerto Rico and King County, Washington (home of Seattle) decided to extend their long-running outsourcing contracts for offender monitoring services. Under the agreements, BI Incorporated will provide a variety of electronic monitoring services and technology, including monitoring systems (integrating ankle bracelets, receivers placed in offenders' homes, and a host monitoring computer), an online offender database (for scheduling and other data) and 24/7 national monitoring center support.

At a time when budget cuts and prison capacity constraints are prompting public officials to explore ways to do more with less in corrections, privatized offender monitoring and community-based corrections services offer a real solution. They offer a way to save tax dollars while providing alternatives to detention and viable approaches to "right-sizing" the corrections system (e.g., lower-risk offenders in community-based care; higher-risk inmates in prison beds). For example, in 2004 the Illinois Department of Corrections contracted out the operation of eight re-entry centers for high-risk parolees and electonic monitoring services for nearly 3,000 offenders. Since the privatization, the three-year average recidivism rate in Illinois has dropped to 51.8%, having spiked to 54.6% prior to the privatization. Hundreds of other state and local governments have embraced the outsourcing of community corrections services to achieve similar results, a trend that's likely to continue.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Corrections Research and Commentary