Public-Private Partnerships Can Improve Corrections, Safety

While Florida faces a multi-billion dollar budget shortfall and billions more in financial liabilities, the current fiscal crisis offers an opportunity to seek innovative ways to transform the way government operates, particularly in one of its most costly areas – corrections.

Reducing crime and managing the costs and performance of our corrections system demand that we find ways to reduce recidivism. Florida TaxWatch and Reason Foundation issued a report in January exploring the expanded use of public-private partnerships (PPPs) that coordinate the currently fragmented corrections system with the aim of reducing recidivism while lowering costs by tens of millions annually. Our organizations testified several times in front of Senate and House committees in the Florida legislature on our proposed PPP model.

The budget passed by the Florida Senate embraces many elements of our proposal. It would privatize many correctional services in an 18-county region of South Florida and hold providers accountable for meeting an expansive range of new performance standards designed to improve offender rehabilitation and programming, prison safety, and other key goals.

The Senate’s proposal also draws inspiration from the sensible criminal justice reforms underway in the United Kingdom. Like a number of states, the U.K. is struggling with the combined challenges of fiscal duress, rising corrections costs and persistent recidivism, and they’re embracing PPPs as part of their larger reform strategy.

The U.K.’s left-right coalition government recently announced three new prison contracts estimated to save over $350 million (USD) over their lifetime, with one representing the first of several pilot projects for a “payment by results” (PBR) approach. Ten percent of the private operator’s payment will depend on lowering the reconviction rates of released offenders by at least five percentage points. As U.K. Justice Secretary Kenneth Clarke noted:

“[P]ublic protection isn’t just about how we manage prisons in order to punish people. It’s also about how we achieve genuine and long-lasting reductions in crime by cutting re-offending. […] PBR is central to our rehabilitation reform plans because it means we can concentrate on paying for what works to reduce re-offending. The current system funds services but not outcomes […] PBR looks to change this by rewarding performance against the outcomes specified in a contract.”

The Senate privatization proposal would similarly tie payment to performance, a point overlooked in the current public discourse. Instead, critics cite false red herrings. They complain the proposal would privatize prisons at an unprecedented scale, but if fully implemented, Florida would still have a lower percentage of its inmates in private prisons (29%) than states like New Mexico (43%), Montana (40%) and Vermont (30%). Critics also suggest privatization may not save money; however, state law requires at least a seven percent cost savings for privatization to proceed. And state officials estimate that the four prison contracts signed last year will save between 14 to 27 percent relative to in-house costs.

The Senate proposal would yield significant savings, and it would do so strategically by tying long-term cost savings to improvements in system performance. The proposal lays out in specific detail a wide range of new performance criteria vendors-and payments-would be evaluated on, including recidivism reduction, inmate programming, outcomes for inmate literacy and education programs, and many more. Most importantly, it would align the financial incentives of the private sector with government’s goals of maintaining public safety, reducing recidivism, improving rehabilitation and lowering costs.

Florida’s current system presents significant obstacles to offender rehabilitation, which costs taxpayers millions of dollars each year at the front- and back-end of the system. We should take the opportunity to create an open dialogue between the public and private sectors to find innovative ways to create a lower cost, higher performing, and more accountable corrections system.

Dominic M. Calabro is president and CEO of Florida TaxWatch, a nonpartisan, nonprofit, research institute, where he has served for more than three decades. Adrian Moore, Ph.D. is the vice president of policy of Reason Foundation.