Prison is a business and business is booming!
By Travis Gettys
Falling crime rates are bad for business at privately run prisons, and a new report shows the companies that own them require them to be filled near capacity to maintain their profit margin.
A new report from the advocacy group In the Public Interest shows private prison companies mandate high inmate occupancy rates through their contracts with states – in some cases, up to 100 percent.
The report, “Criminal: How Lockup Quotas and ‘Low-Crime Taxes’ Guarantee Profits for Private Prison Corporations,” finds three Arizona prisons must be filled to capacity under terms of its contract with Management and Training Corporation.
If those beds aren't filled, the state must compensate the company.
The report found that occupancy requirements were standard language in contracts drawn up by big private prison companies.
One of those, The Corrections Corporation of America, made an offer last year to the governors of 48 states to operate their prisons on 20-year contracts.
That offer included a demand that those prisons remain 90 percent full for the duration of the operating agreement.
The report found 41 of the 62 contracts reviewed contained occupancy requirements, with the highest occupancy rates found in Arizona, Oklahoma and Virginia.
Private prison companies have also backed measures such as “three-strike” laws to maintain high prison occupancy.
When the crime rate drops so low that the occupancy requirements can’t be met, taxpayers are left footing the bill for unused facilities.
In Colorado, for example, Democratic Gov. John Hinklooper agreed to close down five state-run prisons and instead send inmates to CCA’s three corrections facilities.
That cost taxpayers at least $2 million to maintain the unused facilities.
It’s more difficult to quantify the societal cost of filling prisons to satisfy private investors.