Private sector ready to take jailhouse keys

By: ADRIAN MOORE
Mr. Moore is the associate director of economic studies at the Reason
Public Policy Institute in Los Angeles.

The states's prisons are at 196 percent of capacity. The Department of
Corrections predicts that by the year 2000 we will no longer be able to
cram any more prisoners into these overcrowded cells.

Along with running out of space, prisons are turning into a budget buster.
California spent nearly $4 billion in 1996 just operating existing
facilities. According to the nonpartisan Legislative Analyst, that cost is
expected to double over the next 10 years, by which time the state will be
spending twice as much on prisons as it does on higher education. And about
$10 billion will be needed to build up to 10 new prisons.

What can be done? Two events in late August point to the answer:

First, SB 818 was approved by the Senate and then by the Assembly's fiscal
committee. The bill provides for more than 7,000 nonviolent female inmates
to be transferred to private correctional facilities over the next several
years. The law also mandates that all contracts with private facilities
must have an annual perinmate cost at least 10 percent lower than the
cost in state facilities.

Second, the state's Little Hoover Commission held its final public hearing
on the future of California corrections, and the focus of the hearing was
how the private sector can help.

Finally, an agreement was reached this month by officials in California
City (In Kern County) for a private firm to build and operate a 2,000bed
prison, which will house state prisoners at a perday cost considerably
less than it currently costs the state.

Compared to the cost of having the government run a prison, a private
operator usually saves 10 percent to 15 percent. The savings are even
greater in construction of new prisons, around 40 percent. If California
allowed the private sector to build half of the new prisons needed in the
next decade, it would save roughly $1.2 billion.

The Department of Corrections especially the union representing state
prison guards has long resisted efforts to make greater use of private
facilities. The union argues that guarding prisoners is a duty that only
professional public employees can be trusted with. They would rather ignore
the tremendous success other states and the federal government have had
with private prisons.

The federal government has contracted with private firms for years to run
detention facilities in California, and will be opening the firstever
privately operated federal mediumsecurity prison this year in the San
Joaquin Valley. In addition, 27 states now have at least one privately
operated adult prison more than 130 in total.

The private sector can run prisons at lower cost without lowering quality,
by minimizing overtime, using fewer administrators and by shopping for
deals in purchasing supplies rather than using convoluted government
purchasing rules.

The Little Hoover Commission will release its recommendations later this
year. If its members heed the testimony heard last month, they will
recommend that California contract out the operation of a few prisons to
allow the state, the public and the private sector to get a feel for
partnerships in corrections. The results will speak for themselves.