News Release

Transferring 25,000 Inmates to Private Prisons Would Save California $1.8 Billion Over Five Years

California spends three times as much per inmate as Texas, over twice as much as Florida

Every inmate in a California prison costs taxpayers over $47,000 a year. Because of the state’s astronomical prison costs, a new Reason Foundation-Howard Jarvis Taxpayers Foundation study finds California could save $120 million a year for each 5,000 inmates it sends to private prisons in other states. The report details a five-year prison privatization plan that would save California taxpayers $1.8 billion over that span by gradually transferring 25,000 inmates out of state.

The Reason Foundation-Howard Jarvis report shows California spends three times as much per prisoner as Texas, which has nearly as many inmates. Texas spends $42.54 per inmate each day, while California spends at least $132.98 an inmate every day. Florida, with the third largest inmate population in the country, spends $52.90 a day per inmate.

Prison privatization is becoming increasingly common in other states. Nearly 130,000 inmates are now housed in private facilities, with Texas sending over 20,000 inmates to them. In 2008, 14 states (Arizona, Colorado, Hawaii, Idaho, Kentucky, Mississippi, Montana, New Jersey, New Mexico, Oklahoma, Tennessee, Texas, Vermont, and Wyoming) had relocated at least 10 percent of their state prison populations to private-run facilities.

“Simply put: private prisons offer California a huge opportunity to save money,” says Leonard Gilroy, lead author of report and director of government reform at Reason Foundation. “The state’s labor costs and the lack of incentives to reduce costs have created a prison system that is helping wreck the state budget. Our partial privatization plan isn’t going to solve all of the problems, but it can put a big dent in them.”

As Gilroy notes, labor costs are a huge part of the prison system’s costs. In fact, prison guards eat up a whopping 40 percent of California’s personnel spending. One in seven state employees is a correctional officer.

This prison plan, combined with other much-needed criminal justice and corrections policy changes mentioned in the report, can help reduce the size and cost of California’s prison population. The state needs to take bold actions on sentencing reform (such as rehabilitation programs and drug courts for low-risk offenders), parole and probation reform to reduce the excessive number of non-violent offenders returned to prison for technical violations of their parole, recidivism reduction programs, revamping the inmate classification system, and drug policy reform.

Full Report Online

Public-Private Partnerships for Corrections in California is online here.

About Reason Foundation

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically acclaimed monthly magazine, Reason, and its website For more information, please visit


Leonard Gilroy, Director of Government Reform, Reason Foundation (713) 927-8777
Jennifer Kerns, Howard Jarvis Taxpayers Foundation, (916) 420-2888
Chris Mitchell, Director of Communications, Reason Foundation, (310) 367-6109