Arizona To Name Winning Prison Bid Amid Protest

DALLAS — Amid protests and falling incarceration rates, Arizona on Friday plans to award a for-profit prison to a private company.

While the cost of the new prison has not been disclosed, a 500-bed private lockup in the town of Buckeye is expected to cost $50 million.

Arizona’s 2012 state budget directs $50 million in the next two years toward construction of 1,000 private prison beds and 500 new state-run maximum-security beds.

Gov. Jan Brewer, who has close ties to the private prison industry, argues that while overall crime is down and inmate population has fallen, the number of those needing maximum-security housing in the state has risen.

The state is expected to pay a 9.5% premium for a private prison versus a state-owned facility. The average daily cost per inmate in a state prison is $48.42 compared to $53.02 for a private one, according to the Arizona Republic.

The Arizona Department of Corrections reported that in fiscal 2011 there were 296 fewer prisoners than the previous year, and in the past fiscal year that ended June 30, there were 304 fewer inmates for a total of 39,877.

If the new, private 1,000-bed facility operates at 90% capacity, the annual cost for taxpayers would be $17.4 million per year, according to the Republic. A state-run facility, under the same scenario, would cost taxpayers $15.9 million annually. At that rate, the state could expect to provide about $350 million to the private prison operator over the 20-year contract.

However, ADC officials say the state would save money by having the private corporations front the money for construction. Typically, a conduit issuer sells tax-exempt certificates of participation backed by lease revenues from the private operator.

Under its $1 billion annual budget, the ADC houses 6,500 inmates, or about 16% of the prison population, in private facilities, officials say.

Two bidders for the new 1,000-bed prison include Management & Training Corp. and the GEO Group Inc. The companies have contracts at five prisons in Phoenix, Florence, Kingman and Marana. The other bidders are Corrections Corporation of America, Emerald Correctional Management and LaSalle Corrections. None of the bidders is based in Arizona. CCA lobbyist Chuck Coughlin is a close friend and adviser to Brewer, according to the Republic.

While the Republican governor has acknowledged the falling crime and incarceration rate, she told the New York Times that growing crime in Mexico is likely to spill into Arizona. During her campaign for governor, she said that Phoenix had the highest rate of kidnapping in the nation. Brewer has become nationally known, along with Maricopa County Sheriff Joe Arpaio, for aggressively pursuing undocumented immigrants. 

The ADC had originally made requests for proposals for 5,000-inmate facilities. But last December, citing lower incarceration rates, the agency lowered that to 2,000 inmates.

In a last-ditch effort to stop the private prison, a coalition of 50 state and national leaders and organizations sent a letter to Brewer Tuesday asking her to halt the process.

“To invest millions more in this failed enterprise is throwing good money after bad,” the letter said.

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