Drop in Prisoners Thwarts Arizona's Lock-Up Plans

DALLAS — Falling incarceration rates could interfere with Arizona’s plan to issue debt to finance a for-profit private prison, according to reports.

State officials since 2009 have planned to spend as much as $585 million over five years building and operating a 5,000-bed private prison that would be awarded to a for-profit bidder.

However, since then, the state’s prison population has fallen 1.6% from its peak of 40,778 inmates.

Officials fear that, absent any new laws or harsher sentencing by judges, Arizona will fail to meet its projected prison population.

The state currently houses about 6,000 of its 40,000 inmates in private, for-profit prisons.

The Arizona Department of Corrections recently asked the four for-profit companies bidding for the contract — Corrections Corp. of America, Geo Group, Management and Training Corp., and LaSalle Corrections — to keep bids open until Nov. 22. The state had expected to close bids last month.

Despite the trend toward fewer incarcerations in Arizona and other states, the Department of Corrections was the only state agency to see an increase in funding this year.

CCA chief executive Damon Hininger appeared upbeat about the business climate in an earnings call on Thursday.

“For the second consecutive year, not one of the 50 states is appropriating money for new prisons, which is going to further exacerbate the supply-demand imbalance,” Hininger said.

“Additionally, in new state development we are seeing some potential partners come into the marketplace soon in a very meaningful way for new beds.”

A 2010 CCA annual report filed with the Securities and Exchange Commission warned that “the demand for our facilities and services could be adversely affected by … leniency in conviction or parole standards and sentencing practices.” A decline in illegal immigration in Arizona and drug diversion programs have also affected incarceration, officials said.

In Arizona, the proposed sites of the private prison are competing for what they see as an economic stimulus.

Coolidge Mayor Thomas Shope said that a private lockup could provide 400 to 800 jobs and lower his city’s 20.4% unemployment rate.

At a City Council meeting on the proposed project, dozens of private-prison boosters showed up in blue T-shirts emblazoned with the slogan: “Coolidge – The Right Choice.”

One impediment to a bond issue for the private prison was brushed aside last month when Maricopa County Superior Court Judge Arthur Anderson ruled that the Quaker group American Friends Service Committee lacked standing to seek an injunction against construction of the private prison.

The AFSC filed for an injunction Sept. 12, saying that the state had failed to conduct a legally required comparison of costs and benefits of private prisons versus public facilities.

The law requires that the study be submitted to Arizona’s Joint Legislative Budget Committee for review.

The Quaker group and others opposed to for-profit prisons cite studies that the cost savings predicted for private prisons have not been borne out.

In a report last week entitled “Banking on Bondage,” the American Civil Liberties Union noted that, while private prisons have been profitable for the private operators and the financiers, they have had some negative effects on local communities while providing no meaningful savings.

“Our nation’s reliance on mass incarceration has bankrupted government budgets, torn families and communities apart, disproportionately impacted people of color, and provided no benefit to public safety,” said ACLU attorney David Shapiro, who wrote the report.

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