Prison sale’s fuzzy math
Toledo Blade - December 31, 2011
Gov. John Kasich believes the private sector does many things better than state government. That’s why he privatized the state’s economic-development efforts, and proposes leasing the Ohio Turnpike, privatizing management of liquor operations and the lottery, and selling off or privatizing some prisons.
So far, the governor’s faith has reaped few rewards. Now, a nonpartisan research organization says Mr. Kasich’s plan for privatized prisons could cost Ohio taxpayers millions of dollars.
The Kasich administration wants to sell a state prison, will install private management at two facilities in Marion tonight, and plans to combine operations of two Grafton facilities, one of which is privately operated. Officials say selling Lake Erie Correctional Institution in Conneaut to Corrections Corporation of America would save the state $3 million a year. Executing the entire plan would save about $7 million a year, they estimate.
Not so fast, says Policy Matters Ohio. Last April, the think tank found omissions, oversights, and errors in the state’s figures on potential savings from privatization. After the state revised the numbers, Policy Matters concluded recently that selling the Conneaut prison would be, at best, an economic wash.
At worst, though, privatization could cost taxpayers millions of dollars in future years if a prison’s private owner seeks a rate increase. Policy Matters says Corrections Corporation of America has employed that strategy.
More than half the projected $7 million in savings would come not from privatization, but from returning the North Coast Correctional Treatment Facility to state control and merging its operations with the state-run Grafton Correctional Institution. And savings the state says it will get from not having to pay for maintaining the relatively new Lake Erie facility have not been substantiated.
Ohio has dabbled in private prisons for 10 years. A state law requires a minimum of 5 percent savings from privatization. But no one in state government knows how much, if anything, has been saved by privately run prisons. That’s not a strong basis for handing more control of prisons to for-profit companies.
Also unanswered is the question of how private owners will generate savings for the state and profits for themselves. Experience elsewhere suggests that possible answers could include fewer guards and lower pay, less money spent on training, more crowding of prisoners, and fewer inmate services such as psychological counseling, drug and alcohol treatment, education, and rehabilitation.
If those things occur, Ohio can expect lower morale and higher turnover rates among guards, seething prison environments, poorer supervision, a lower rehabilitation rate, and more repeat offenders. Policy Matters says lower pay rates, fewer guards, and profits that follow out-of-state owners would reduce the impact of state spending on local communities that have prisons. And private operators will be less transparent and accountable, which could lead to prisoner abuse.
Right now, the numbers on private prisons in Ohio just don’t add up.