Are private prisons really cost-effective?
Published 5:00 am Thursday, May 19, 2011
PHOENIX — The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates. But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons — even though they often steer clear of the sickest, costliest inmates.
The state’s experience has particular relevance now, as many politicians have promised to ease budget problems by trimming state agencies. Florida and Ohio are planning major shifts toward private prisons, and Arizona is expected to sign deals doubling its private-inmate population. But hopes of big taxpayer benefits might end in disappointment, independent experts say.
“There’s a perception that the private sector is always going to do it more efficiently and less costly,” said Russ Van Vleet, a former co-director of the University of Utah Criminal Justice Center. “But there really isn’t much out there that says that’s correct.”
Such has been the case lately in Arizona. Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.
The research, by the Arizona Department of Corrections, also reveals a murky aspect of private prisons that helps them appear less expensive: They often house only relatively healthy inmates.
“It’s cherry-picking,” said State Rep. Chad Campbell, leader of the House Democrats. “They leave the most expensive prisoners with taxpayers and take the easy prisoners.”
Matthew Benson, spokesman for Gov. Jan Brewer of Arizona, a Republican, did not dispute the state research. But he said officials had a “pretty wide lens” to interpret the cost-savings mandate, like taking into account the ability of private companies to recoup hundreds of millions in construction costs over the life of contracts.
Privatization advocates play down the data. Leonard Gilroy, director of government reform for the Reason Foundation, a libertarian research organization, questioned whether all costs were included and said the figures were too narrowly drawn, particularly on medium-security prisons, to prompt conclusions. “It is looking at a limited slice,” Gilroy said.