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States Wrestle with Prison Privatization

by Christopher Zoukis

In 2016, questions were raised in at least three states about the amount of taxpayer money flowing into the coffers of private, for-profit prison companies.

Take Colorado, for example. When lawmakers were considering an almost $26 billion state budget last year, they noticed it included a curious last-minute addition: $3 million for Corrections Corporation of America (CCA, now known as CoreCivic).

The Denver Post reported that the $3 million payment to CCA was drawn from money earmarked for the Department of Corrections that was set aside “in case the prison population increases faster than current forecasts.” According to Colorado budget writers, the payment was needed to keep the CCA-operated Kit Carson Correctional Center in Burlington, Colorado from closing its doors. If the prison shut down, the state would need to relocate the 400 prisoners who were housed at the facility as of April 2016.

While the Kit Carson prison has a capacity of about 1,450 beds, the fewer number of prisoners held at the facility meant it was not profitable for CCA. Yet even though the state Senate approved the $3 million payment to ensure the prison stayed open, CCA decided to close it anyway at the end of July 2016, resulting in 142 job losses.

“It wasn’t a total surprise,” said Burlington economic development director Rol Hudler. “There is no question it was unprofitable for them. It had to be.”

The closure of Kit Carson had a major impact on the small town of Burlington, where the “prison paid $1.2 million in property taxes to fund schools, the city and county,” according to the Denver Post. The superintendent of Burlington’s School District noted “the quality of education will change,” as local schools would lose $400,000 out of a $7 million budget, the local newspaper, the Burlington Record, reported in June 2016.

Christie Donner, director of the Colorado Criminal Justice Reform Coalition, lauded the closure of Kit Carson. “Prisons shouldn’t be used as economic development,” she said. “We cannot justify keeping people locked up so that a couple hundred people in Burlington can have a job. It’s unethical. It’s immoral to even think about that. We’ve got to have more sensible criminal justice policy than just mass incarceration.”

This was the second bailout for CCA approved by Colorado lawmakers in recent years. In 2012, the company warned that it might have to close a prison if it didn’t receive more money under its contract with the state. In response, lawmakers gave CCA $9 million to keep the Kit Carson facility open, and guaranteed the state would pay for 3,300 prison beds through 2013. [See: PLN, April 2013, p.26].

Colorado Governor John Hickenlooper’s budget director, Henry Sobanet, conceded that the gratuitous payments to CCA in 2012 and 2016 could be seen as controversial, but were necessary “given the seriousness of a potential [prison] closure in a rural community.”

Critics of for-profit prison firms are not convinced that such publicly-funded payments are beneficial, because the companies “have a pattern of threatening to close prisons, to declare an emergency to get a bailout from taxpayers,” said Donner. State Senator Mike Johnston went further, noting that the last-minute timing of the 2016 bailout payment to CCA in exchange for not closing Kit Carson amounted to “blackmail.”

Kentucky legislators also put forward a private prison-friendly budget proposal in 2016. House Speaker Greg Stumbo noted that the budget included provisions to reopen three private prisons in the state, all of which had closed by 2013, if county jails became overcrowded. One of those facilities, the CCA-run Otter Creek Correctional Center, was ground-zero for a sexual abuse scandal that led both Kentucky and Hawaii officials to remove their female prisoners from the prison. [See: PLN, Sept. 2011, p.16; Oct. 2009, p.40].

The Kentucky Jailers Association, Kentucky Association of Counties, Kentucky Judge/Executives Association, and Kentucky Association of Magistrates and Commissioners asked Governor Matt Bevin to reject the private prison budget provision.

Bevin vetoed the provision in April 2016, noting that the state “shouldn’t limit its operations in dealing with any potential state prison population challenges.” However, according to a March 10, 2017 news report by radio station WFPL, prison overcrowding has led to renewed calls by public officials to put private prison contracts back on the table. John C. Tilley, secretary of Kentucky’s Justice and Public Safety Cabinet, said it was “critical” that the state consider a return to private prisons.

On May 23, 2017, Kentucky officials announced they had contracted with a law firm to “assist in drafting and finalizing a complex contract for operation of a private prison in Lee County, to accommodate prisoners in state custody due to serious overcrowding problems at existing state correctional facilities,” as reported by the Lexington Herald-Leader. The prison is the Lee Adjustment Center, owned by CCA.

Some lawmakers criticized the state’s apparent return to prison privatization, which had been phased out four years earlier.

“At some point we have to decide if we’re really in the business of corrections of if we’re just warehousing people,” observed state Senator Robin Webb. “There are good reasons why we quit using these places, why the federal government [proposed to] quit using these places. State prisoners are a responsibility that should be overseen by the state, not handed off to someone else.”

“Corrections is still reviewing their options with regard to private prisons, but no final decisions have been made yet,” said Mike Wynn, spokesman for the Justice and Public Safety Cabinet. “The [law] firm is helping us determine the best contract vehicle – and the best policy safeguards to prevent issues of the past – should we pursue an option on private prisons.”

In Minnesota, lawmakers proposed a scenario to deal with prison overcrowding that would benefit the private prison industry. Legislation was introduced that would allow the state to lease or purchase the CCA-owned Prairie Correctional Facility in Appleton; the House of Representatives approved that proposal on April 6, 2017. The prison has remained empty since CCA closed the 1,640-bed facility in 2010, resulting in the loss of 350 jobs.

Under the legislation, Minnesota could lease the prison from the company and staff it with state employees. “It would be entirely run by the DOC, just like any other prison facility in the state,” said state Rep. Tim Miller.

Governor Mark Dayton opposed leasing the CCA facility but expressed interest in buying and restoring it. A companion bill to evaluate the state’s use of the Appleton prison, SF 1322, remains under consideration by the state Senate. If passed the bill would significantly benefit CCA, which has been carrying the vacant facility on its books for the past 7 years.

Beyond state governments, several local jurisdictions have recently wrestled with issues involving private prison contracts. The District of Columbia ended its longstanding contract with CCA to operate the Columbia Treatment Facility jail on January 31, 2017. [See: PLN, May 2017, p.51]. Also, Indianapolis Mayor Joe Hogsett has expressed interest in building a new jail and ending the city’s contract with CCA to manage the Marion County Jail II facility, according to an April 4, 2017 article in the Indianapolis Star.

“First and foremost, that’s the job of our elected sheriff – to be responsible for the care and security of inmates,” stated Andy Mallon, the city’s corporation counsel. “That promotes accountability with public officials and transparency, whereas when you have a privately run jail, all of that gets transferred by a contract to a private, profit-driven company. We don’t think at this point we should be providing profits for jailing [prisoners].” 


Sources:,,,,,, Lexington Herald-Leader