One of the great dangers of privatizing jails and prisons is that you give a huge profit motive to keep those facilities filled to the brim with inmates. A new report from In the Public Interest finds that many of the contracts between private corrections firms require that the government either keep them full or pay for the empty beds.
In 2012, Corrections Corporation of America (CCA), the largest for-profit private prison company in the
country, sent a letter to 48 state governors offering to buy their public prisons. CCA offered to buy and operate a state’s prison in exchange for a 20-year contract, which would include a 90 percent occupancy rate guarantee for the entire term. Essentially, the state would have to guarantee that its prison would be 90 percent filled for the next 20 years (a quota), or pay the company for unused prison beds if the number of inmates dipped below 90 percent capacity at any point during the contract term (a “low-crime tax” that essentially penalizes taxpayers when prison incarceration rates fall). Fortunately, no state took CCA up on its outrageous offer. But many private prison companies have been successful at inserting occupancy guarantee provisions into prison privatization contracts, requiring states to maintain high occupancy levels in their private prisons.
For example, three privately-run prisons in Arizona are governed by contracts that contain 100 percent inmate quotas.2
The state of Arizona is contractually obligated to keep these prisons filled to 100 percent capacity, or pay the private company for any unused beds…
Bed guarantee provisions are also costly for state and local governments. As examples in the report show, these clauses can force corrections departments to pay thousands, sometimes millions, for unused beds — a “low-crime tax” that penalizes taxpayers when they achieve what should be a desired goal of lower incarceration rates. The private prison industry often claims that prison privatization saves states money. Numerous studies and audits have shown these claims of cost savings to be illusory4, and bed occupancy requirements are one way that private prison companies lock in inflated costs after the contract is signed.
Such contracts should be illegal everywhere. But Congress completely ignores the inequities in our criminal justice system.