Wednesday, January 25, 2012

WIN: Will privatizing Florida prisons save money?

Florida has moved a step closer to privatizing prisons in the southern tip of the state. Jesse Russell reports.

A bill was passed out of the Senate committee on Monday in spite of public comment that weighed heavily against privatization due to employment and public safety concerns.

Lt. Mike Riley told the committee that a 2005 study shows private prisons overcharged the state of Florida $13 million with much of that overcharge for positions that were never filled. As a result prisons are understaffed increasing safety issues for inmates and officers alike. Riley added:

If we privatize these prisons its already projected that they’ll cut positions to save money. It’s already been proposed that training be reduced from 400 hours to four weeks.

Riley said it’s a fact that correction officers are killed in the line of duty. In the last few years he had to attend three funerals. He had one request of the Senators if they pass a privatization bill that further reduces safety at prisons. Riley noted:

If you choose to privatize these facilities, I ask you, the next officer death, please stand next to me at the funeral.

A recent congressional Government Accounting office (GAO ) report stated that the few robust studies that it had reviewed did not permit drawing generalities.

For these reasons, among others, the few studies that we reviewed
do not permit drawing generalizable conclusions about the comparative
operational costs and/or quality of service of private and public prisons.

However, the Reason Foundation that has connections to the Florida administration of Jeb Bush sees it differently with a multitude of studies that indicate that privatized prisons are more cost effective, maintain higher standards and have less  recidivism.

Rightardia is inclined to believe the primary purpose of the Reason Foundation has produces  some private enterprise prison marketing hype. 

In general, governments are more successful in managing large programs because overhead is about half. When you privatize a government functions, an administrative entity like a public service commission must be created to oversee the operation of the privatized function and to approve rate increases. 

Initially, the privatized organization may appear to be more cost effective. Over time, revenue savings are likely to disappear. 

Another trick is to put the privatized prisons under different standards than the state prisons. There should be just one inspector general function that applies uniform standards to the entire prison system: both public and private. 

You can be certain that the privatized prisons won't want to be subjected to these standards because they will say "we are special." A unified inspection system is the only way to really compare the effectiveness of public and private prisons. 

The prison staff and security guards will also see wages shrink over time and pensions disappear. 

The big winner will be the corporate office in which the CEO will make 300 times what the guards make. The corporate staff will also be far better paid than the workers in the prison. Shareholders will also get quarterly dividend checks. 

In the end who is the biggest loser? 

The public is. The public will end up paying more for the private prsions in the long run. 

Privatization is  Ponzi scheme that produces diminished returns over time. 

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