State Considers Reopening Troubled Prison

Looking to cut a corrections budget that accounts for nearly a quarter of the state's general fund each year, Michigan lawmakers have reopened the door to privatizing state prisons.

Prison systems constitute a major slice of state budgets across the country, prompting legislators to explore savings measures. Under legislation signed into law by Gov. Rick Snyder (R) this week, Michigan could send inmates to a troubled private prison or privatize other prisons as part of an effort to trim costs in the state's $1.9 billion corrections system.

The legislation is a potential boon for the GEO Group, the nation's second-largest for-profit prison operator, which owns a now-vacant youth prison in rural Baldwin, Mich. Ever since the state canceled its contract with GEO in 2005, company executives have unsuccessfully tried to find inmates to fill the 1,725 empty prison beds. The company boosted its spending on political lobbying in Michigan more than fivefold last year.

But the Baldwin prison has a checkered past. The state closed the facility, its only private prison, in 2005, following a series of audits and investigations that found high levels of assault, frequent staff vacancies and operating costs that exceeded those in comparable state prisons.

Civil rights and criminal justice policy groups argue Michigan cannot ignore its troubled history with privatization. "There's absolutely no reason to think that conditions will necessarily be better, or that problems like staff turnover will have been solved," said Barbara Levine, executive director of the Citizens Alliance on Prisons and Public Spending, a Michigan group that advocates for sentencing reform and reducing prison populations. "There are a lot of lessons to be learned."

Michigan's experience with privatization offers a case study of the challenges many states have faced in outsourcing public safety to for-profit corporations: Cost savings often don't materialize, and lower wages lead to high rates of turnover, which critics say compromises safety.

Private prison corporations such as the Florida-based GEO Group grew in the 1980s and '90s as state prison populations soared, and in more recent years as the federal government detained record numbers of undocumented immigrants. The companies have angled for growing shares of state and federal inmates, promising cost savings for governments struggling to balance budgets.

But those savings have often proven illusory, according to a series of reports by federal and state auditors. State reports in Arizona, where nearly a quarter of the prison system is privatized, have found that medium-security private prisons cost more than state prisons when factoring in medical care and other costs. Studies on Florida's private prisons have also shown minimal cost savings, despite state requirements that private facilities must produce savings of more than 7 percent.

Michigan state Sen. John Proos (R), who introduced the prisons bill last year, said the legislation is part of a broader effort to determine whether private contracting can bring down costs across the corrections system -- for food services, transportation and healthcare, in addition to outright management. Any contractor would be required to demonstrate a 10 percent cost savings.

"This is a colossal industry in the state of Michigan that requires constant and diligent management," Proos said. "The only way I could get my arms around the budget question of whether or not we are adequately using taxpayer dollars to provide those services was to ask the private sector to bid for those services."