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Private prisons are efficient, cost-effective

An editorial in The Arizona Republic last month, “Let’s Get Facts On Private Prisons,” encouraged lawmakers to make policy decisions on public-private partnerships in corrections based on data supported by facts.

The Arizona Chamber of Commerce and Industry wholeheartedly agrees.

When it comes to the use of private facilities to address Arizona’s overcrowded prisons, the benefits are clear.

Many credible and responsible national studies — by respected authors from Vanderbilt University, Harvard Law Review and the Reason Foundation, to name a few — have concluded that private sector corrections can be carried out at industry-leading standards of service with demonstrated savings to taxpayers. Overall, the cost savings of public-private partnerships in corrections have been affirmed by more than 20 studies performed by universities, think tanks and government entities. This research supports a conservative estimate that private prisons offer cost savings of between 10 to 15 percent.

As cited in a recent report by the Arizona Department of Corrections, comparing public to private corrections costs can be a challenging exercise.

Certain costs — like monitoring the performance of the private sector — should be and have been included in the overall costs of private prisons. By the same token, costs on the public sector side — such as the costs of actually building the prison, its upkeep, and employees’

pension and benefit costs — should also be reflected on the public ledger.

If Arizona was to modernize all of its existing facilities, the cost to the state’s taxpayers would likely be in the hundreds of millions of dollars. That cost savings alone justifies the value proposition of public-private partnerships.

Not only does the private sector have new, innovative facilities, but the private sector invests its own capital in the construction, allowing Arizona to target its limited bonding capacity to building roads and schools.

In addition to the state’s ability to defer prison capital costs, public-private partnerships allow the state to control pension liability costs, since private sector employees are not on the state retirement system, but rather receive benefits through a traditional

401 (k) retirement account.

Also, unlike public prisons, private prisons in Arizona pay property taxes and contribute to the tax base of local communities, resulting in reduced tax bills for Arizona homeowners.

The recent RFP released by the state for up to 2,000 private prison beds requires the private sector to meet more than 40 pages of performance measures and includes more than 30 reports that must be completed by the contractor to ensure contract compliance.

Failure to meet these and other standards results in monetary offsets or termination of the contract by the state. These safeguards are appropriate and demonstrate to taxpayers that the contractor is living up to the terms the agreement.

Private correctional facilities have been able to meet their responsibilities by being efficient, innovative and flexible, all at a lower cost.

I would encourage those opposed to private prisons to talk to folks in communities that have facilities in their own backyards and ask them how the industry has been received. You will find that private prisons strive to adhere to the tenants of being good corporate citizens, and take their commitment to the communities they call home, as well as Arizona as a whole, very seriously.

— Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry.

4 comments

  1. As an organization, Middle Ground Prison Reform does not oppose private prisons per se. Instead, we believe they can serve some correctional needs by incarcerating minimum to medium custody inmates. The vast majority of the mail we receive from Arizona prisoners housed in private prisons is positive in terms of reporting on the infrastructure, attitude of prison guards and other staff, food, programs, work, etc at private prisons. Medical care is rated dismal at both private and public prisons.

    When opponents mention “horror” stories about things that happen in private prisons, we can match them horror-story-for-horror-story with an incident or series of incidents that have happened repeatedly in public prisons, especially in Arizona. Marcia Powell’s death is but one example. Tony Lester’s suicide death is yet another. There are many, many examples of enormous failures within state-operated/public prisons.

    Private prisons must be monitored and contract compliance is of utmost importance. There must be serious and swift sanctions for non-compliance. The state personnel who are assigned to monitor contract compliance must be diligent and thorough in their inspections, reporting, and reviews at all times. What happens in private prisons should not be kept in private prisons — their riots, work stoppages, inmate sexual assaults, deaths, injuries to staff or inmates MUST be reportable and available for scrutiny.

    The private prison industry is not going away. If we utilize private prisons to house low-risk to medium-risk offenders, accountability is key to public assurance that they are getting the most benefit from this arrangement while not compromising public safety. Inmate constitutional rights must be honored no matter what agency or who is supervising them.

  2. I dont buy into private prisons because there is a big liability in non law enforcement quality officers. The retirement is better the way it is because 401k does not compare with the state retirement. This whole idea only shifts benefits from the state employees to the private companies.

    I am a retired Arizona State Correctional Officer 20 years service.

  3. You say:

    \Many credible and responsible national studies…\ — There are just as many that show private prisons are no bargain for taxpayers or governments.

    \Also, unlike public prisons, private prisons in Arizona pay property taxes and contribute to the tax base of local communities, resulting in reduced tax bills for Arizona homeowners.\ — So basically, AZ homeowners get their tax money back from a private prison but still get to pay the private prison its profit. I am sure AZ taxpayers are ahead of that game via public prisons.

    \I would encourage those opposed to private prisons to talk to folks in communities that have facilities in their own backyards and ask them how the industry has been received.\ — Private prisons purposely put their facilities in economically depressed communities. Its hard to get a person to understand a thing when their salary depends upon it to paraphrase George Orwell.

    \If Arizona was to modernize all of its existing facilities, the cost to the state’s taxpayers would likely be in the hundreds of millions of dollars. That cost savings alone justifies the value proposition of public-private partnerships.\ — There has been much public spending on prisons. Are you saying Sheriff Joe should replace tent city with a sparkling new private prison? Considering how much his empire has grown I doubt he will want to include you.

    Which brings me to my final point. I am not crazy about paying taxes, but I would much rather my taxes go to my fellow citizens than to profit a corporation and its executives and partisans. No more corporate welfare. No more corporate involvement in government. Corporations are not people and are chartered at the pleasure of government. Government is people and has every right to regulate and tax its corporate creations.

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