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Costs of prison privatization are disputed

By Bill Cotterell
Democrat Political Editor
Tallahassee Democrat Feb. 25, 2005

Confronted with conflicting cost and benefit numbers, a Senate budget committee ordered a special audit Thursday to determine whether privatizing prisons really saves Florida taxpayers any money.

Lobbyists for the Police Benevolent Association said the private companies have used their political influence to cut corners and dodge a legal mandate of operating 7 percent cheaper than state-run prisons. The PBA, which represents about 18,000 correctional officers in state institutions and probation officers, opposes privatization - as other state employee unions do.

But lobbyists for Geo Group and Corrections Corporation of America, the two companies running the state's five privatized prisons, said their operating and program costs are generally below what it costs the Department of Corrections to run a prison. The privately run institutions have also had better service, they said, with fewer escapes and inmate disturbances.

"This is the poster child for everything that's bad in privatization of state government," said David Murrell, executive director of the PBA. "We think the taxpayers are being soaked for millions of dollars. We think the people of this state are being sold a bill of goods."

Hidden costs cited

Murrell and Ken Kopczynski, the PBA's legislative aide, said Geo and CCA enjoy a cap of $8,100 per inmate in medical costs and can "dump" extremely costly hospitalization treatment on the DOC if a prisoner needs long-term care. They also said the companies were supposed to pay property taxes to counties, when privatization was begun in 1986, but that the Legislature has given them tax breaks and credits against their corporate income taxes.

Kopczynski said the state has assumed $4.1 million in medical costs for prisoners who passed the $8,100 cap in a private institution and that lawmakers reimbursed counties $1 million for lost property taxes.

He and Murrell said state prisons have to pay higher salaries because they have more senior staff. Kopczynski said the five private prisons average 43 percent turnover a year because of low salaries and poor benefits and that the Gadsden County institution for women had 76 percent turnover in 2003.

"The for-profit private prison industry says they can do it better and cheaper," said Kopczynski. "This is true when you ignore statutes, medical cost, taxes, debt service, high turnover, low pay and fewer benefits."

Damon Smith, a lobbyist for Geo Group, and Matt Bryan, representing CCA, disputed the PBA figures. They said it is hard to compare state and private costs because no two prisons are alike, but that the corporations are meeting their 7 percent savings goal.

Bryan said, for instance, that "program costs" - mostly drug treatment and education - cost about $30 per inmate per day in the DOC but only $10 per day in CCA prisons.

Audit to be undertaken

CCA operates prisons in Bay, Gadsden and Columbia counties. Geo has two, in Okeechobee and in Palm Beach County. The state is planning a 1,200-inmate private prison near Graceville.

"Not one union member has lost his job due to prison privatization," said Smith. "I'm not sure what their problem is. We haven't tried to take over one state facility."

Sen. Victor Crist, R-Temple Terrace, chairman of the Justice Appropriations Committee, said he would have the Office of Program Policy and Government Accountability audit the costs of private prisons. OPPAGA is the Legislature's accounting and performance-monitoring agency.

"What are the real costs and what are the real savings?" Crist asked. "Are we taking into consideration all the indirect costs with the private prisons?"
Contact political editor Bill Cotterell at (850) 671-6545 or

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