Do Private Prisons Really Save States Money?
Date:  04-28-2014

Evidence suggests they don’t, but Success-Oriented Funding does, so why aren’t more states implementing it?
The following article by Julia Bowling was published by the Brennan Center for Justice on April, 15, 2014.

Are Private Prisons Good Investments for States?

The wave of criticism against private prison companies has grown amidst revelations of poor security, lack of oversight, and perverse financial incentives to lock up more people. Now, a new report from In the Public Interest confirms that private prisons not only rely on faulty math to get states to agree to binding contracts, but also fail to save states money even when their contract legally requires it.

The report examined over 40 studies of private prisons and outcomes in five individual states, and found added costs with private companies when compared to state run facilities. It concluded that companies use questionable methodology in calculating the costs of public and private prisons, inflating public prison costs to make private prisons seem more affordable. These companies can cherry-pick the least expensive prisoners available (often choosing not to house elderly, sickly, or higher-security prisoners), while filling their contracts with expensive terms, occupancy minimums, and automatic increases that create added hidden costs to the state. The study found that Ohio, New Mexico, Florida, Georgia, and Arizona all failed to see savings that were promised – or even legally required in the cases of Ohio (5 percent savings) and Florida (7 percent) – with private prisons.

If private prison companies are not saving taxpayer’s money, why do states continue to send funding where it doesn’t work? Unfortunately, states cannot afford their corrections systems and are scrambling to find any solutions to mitigate the increasing costs, without the time or wherewithal to evaluate the best options

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