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Private Youth Prison Gouging Michigan Taxpayers

Five years after beginning its first flirtation with for-profit prisons, Michigan is learning an invaluable lesson: Despite the hype, private prisons are not cost-effective.

In the months following its 1999 opening, the Michigan Youth Correctional Facility (MYCF) was criticized over assaults, staff turnover, and suicide attempts. Now critics contend that MYCF, coarsely referred to as the punk prison," is gouging taxpayers for high security costs when the majority of its young prisoners could be housed more cheaply in lower security prisons. MYCF is operated by the Geo Group Inc., formerly known as Wackenhut Corrections Corporation [see PLN, June 2004, pg. 16].

Approved in 1996 during the height of the get tough on crime" craze, MYCF was part of a juvenile justice reform package that promised adult time for adult crime." The prison comes complete with two adult-sized gun towers and an armed perimeter patrol.

But when the hordes of young superpredators" propagandized in the 1990s never materialized, says Elizabeth Arnovits, executive director of the Michigan Council on Crime and Delinquency, the state simply decided to fill the prison with other kids. The numbers bear this out. In late March 2004, two-thirds of the prisoners were low security (levels 1 and 2) while only a third were high security (levels 4 and 5). MYCF warden Frank Elo confirmed this was the case. The operation here security wise, is maximum security. Operationally, we probably operate more in line as a Level 2," Elo said.
Arnovits decried the practice of using a maximum security prison to house low level prisoners. Why are we paying this private provider for a Level 5 facility, when in fact they are having predominantly minor offenders who don't need that kind of security?" she said. The few that are [Level 5] that have committed terrible crimes need to be in a special place, but it doesn't have to be this hugely expensive prison." To operate the 480-bed prison in 2005, Michigan will spend $19.27 million.

Part of the rationale of the juvenile justice reform package was to remove so-called hard-core juveniles from expensive state-run treatment facilities to a more retributive environment. But the wrong kids are going to the high security MYCF, said Jon Cisky, a former state senator who worked on the legislation. A kid in on a [breaking and entering) doesn't belong in a maximum security prison," said Cisky, who is now a criminal justice professor at Saginaw Valley State University. Cisky went on to say that counties have an incentive to remove under age prisoners from juvenile prisons, where local jurisdictions bear part of the cost, and place them in the adult system, where the state foots the bill entirely.

When MYCF opened, the Michigan Department of Corrections (DOC) committed to a. 20 year lease. In 2003, the DOC extended the contract an additional four years, estimating savings of $3.4 million a year to the Michigan Civil Service Commission. However, the projected savings are based on what it costs the state to operate a maximum security prison. When classifications levels are considered, the savings dwindle to $420,000 a year. Barry Wickman, the MDOC's chief financial officer, says the daily rate of $75.81 paid to the Geo Group is still cheaper than the $78.21 it costs the state to run a multi-level prison.

But other comparisons show no savings at lower security levels. For instance, the daily cost of housing level 2 prisoners under age 25 at the Handlon Correctional Facility is only $43.69. Even after adding $21.20 per day, the extra cost Wickman says the Geo Group bears for workers comp, health care, and education, the daily rate is still just $64.89 per prisoner--far less than the $75.81 per day it costs to house prisoners at MYCF. And that's without taking into account the $5.6 million a year the state shells out to lease the prison.

To justify MYCF's enormous cost, warden Elo points to programming. Unlike state maximum security prisons where prisoners remain in their cells for most of the day, says Elo, youths at MYCF are active in therapeutic and educational programs all day long. But critics disagree. Deborah LaBelle, an Ann Arbor human rights attorney, said the programming at MYCF appears skimpier than in state-run prisons. LaBelle has interviewed prisoners who spend only 90 minutes a day in school. I think that the programming here is ... thinner than at many other adult facilities," she said.

State-run prisons are undoubtedly costly and problematic. But privatization is no panacea. Those who stand to profit have a strong incentive to skew the numbers and hide expenses--something Michigan legislators should remember the next time they consider the issue of privatization.
Despite numerous attempts in the 2005 legislative session to close the youth prison, or return it to state control, Geo Corp. has managed to retain control of the prison and keep its profits coming.


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