DALLAS - Arizona lawmakers have dropped controversial plans to pay a private prison operator a $900,000 bonus as final approval nears on a proposed $9.2 billion state budget.
The Senate Appropriations Committee on March 31 took out $900,000 the House last week had earmarked for GEO Group Inc. The private prison operator is expected to receive $45 million this fiscal year for providing minimum- and medium-security beds in Phoenix and Florence.
Under contracts with the state, Arizona must fill 95% of the company's beds with inmates in order for Geo to make a profit. House Appropriations Chairman John Kavanagh, R-Fountain Hills, said GEO had done provided emergency private-prison beds at a discount rate during the recession and should receive additional payments.
GEO has contributed to Kavanagh's election campaigns, according to the Arizona Republic.
GEO's lobbying firm, Pivotal Policy Consulting, approached Kavanagh directly about getting additional funds, according to the Republic, even though the Arizona Department of Corrections did not seek any more money for GEO.
State campaign finance records show that six GEO executives, including CEO George Zoley, gave Kavanagh's campaign committee a combined $2,544 in 2012, according to the Republic.
GEO, based in Boca Raton, Fla., posted $115 million in profits on $1.52 billion in revenue in 2013.
Opponents said that providing the additional funds to GEO would violate the state constitution's "gift clause" that forbids the awarding of taxpayer dollars to private corporations as gifts.
House Speaker Andy Tobin said April 3 that he and Gov. Jan Brewer have reached a deal on a $9.2 billion state budget. Senate President Andy Biggs said he couldn't commit to the budget until he sees details.
The Senate passed its version of the budget April 1. That budget had $28 million less spending and provided only $16.5 million for charter schools versus $33 million in the House version. Under the compromise proposal, the House provides $25 million for the charters.
