How Taxpayers Get Punished by Private Prison “Lockup Quotas"

In the Public Interest (ITPI) recently released a shocking study on the alarming frequency of state private prison contracts that contain “occupancy quotas” that guarantee for-profit prison companies a steady stream of revenue even if prison populations decline. In fact, ITPI’s study found that of the contracts analyzed, 65% of them included “lockup quotas” that guaranteed the prison would remain 80, 90 or even 100% full – or else taxpayers were on the hook for the empty beds.

As concern grows over mass incarceration throughout the country,  advocacy groups and elected leaders on all sides of the political spectrum are urging governments to roll back several decades of “strong on crime” mandatory minimum sentencing laws.  Those laws are responsible for skyrocketing numbers of prisoners across the country. In fact, the United States incarcerates 716 out of every 100,000 citizens. That’s more, per capita, than any other nation. Private prison corporations, Corrections Corporation of America and Geo Group, have aggressively lobbied for laws that ensure this steady stream of inmates.

As prisons filled, private prison companies started including occupancy guarantees to protect themselves if prison populations decline. It may be a logical business model, but it’s not logical for American democracy. After all, if the privatization of public services is predicated on the notion that government should be run like a business, contracts that game the system to guarantee profits should be anathema to the entrepreneurial spirit.

Worse yet, they are threat to the fundamental functioning of a democratic nation. Contract clauses with private companies that tie the hand of policy makers limit our collective ability to advance the public interest.

Lockup quotas do just that. As conservative advocate Marc A. Levin, who runs justice initiatives for the libertarian Texas Public Policy Foundation once said, “Clearly it would be a very bad public policy and tie the hands of public officials. I’m sure Marriott Hotels would like a government guarantee for a 90 percent occupancy rate.” And as Reid Wilson asked in his Washington Post headline that covered the report, “Are governments incentivizing longer prison terms?”

To be clear, ITPI is not aware of any circumstances in which people were thrown into jail to satisfy a lockup quota. But the pressure to keep beds filled in private prisons distorts rational criminal justice policy goals.  But we do know that, as crime in the state of Colorado steadily decreased by a third over the past decade, taxpayers in that state were forced to pay an additional two million dollars more, in fiscal year 2013 alone, than they would have had prisons remained in public hands. 

Think about that.  Colorado achieved what should be a laudable social goal. And yet, taxpayers were punished.

Fortunately, advocates are fighting back against the private prison industry. The Center for Media and Democracy, which created ALECexposed.com, recently launched OutsourcingAmericaExposed.com, which digs deep into corporate practices the biggest players in the private prison industry. The Public Safety and Justice Campaign, a coalition of union, community organizations and criminal justice advocates, is aggressively fighting the expansion of private prisons and running successful campaigns to cancel private prison contracts. And earlier this year, the NAACP and the Tea Party Network, strange bedfellows to say the least, both issued statements opposing for-profit prisons.

When asked to comment on lockup quotas, a spokesperson for Corrections Corporation of America argued that they were required for a successful business model.  That may be true.  But lockup quotas are also the result of taxpayers losing control of their services and democracy itself. 

For-profit prisons, and the lockup quotas and low crime taxes that come with them, are a raw deal.

Donald Cohen is Executive Director of In the Public Interest.