JAILS FOR PROFIT LEAVE TAXPAYERS HOLDING THE BAG

Greed is good, or is it? This problem is not unique to the State of Texas.

TEXAS PRISON BOOM GOING BUST

Grits For Breakfast
September 4, 2011

‘Texas Prison Boom Going Bust’ is the headline of a Fort Worth Star-Telegram piece out today documenting a trend that will be familiar to Grits readers. The story opens:

__For about 20 years, employees at the North Texas Intermediate Sanctions Facility went quietly about the business of housing hundreds of short-term parole violators.

__The prison, a complex occupying almost an entire block at 4700 Blue Mound Road, now is vacant largely as a result of reforms aimed at reducing the state's penal system costs.

__Starting in the early 1990s, Texas ignited an almost $3 billion prison building spree, turning to private prison operators to house inmates as the prison population swelled beyond the capacity of state facilities. Now, state, county and city budget cuts, a decline in crime rates, an older population, and penal and court reforms have all contributed to what some call a glut of inmate beds. Those factors have resulted in closed and half-empty prisons and jails.

__They have also left local governments, which saw prisons as revenue and job-generators, scrambling to pay for facilities the state no longer needs.

The story provides a litany of examples of counties investing in jail capacity beyond their own needs with the hope of turning a profit, then ending up holding the bag after their private "partner" walked away. My favorite quote: "You look back and ask why would you take on 30 years of debt on a two-year contract." No kidding! My second favorite quote in the story was from Marc Levin at the Texas Public Policy Foundation warning counties and municipalities that they could no longer count on ever-rising incarceration rates to fill speculative-built jails: "I would hope that counties and cities would do some population projections before they go forward with building these jails," he said. "Any business has to consider how a government's perspective might change. No one is entitled to assume that certain policies are going to remain in place."

That would have been good advice to have received 3-5 years ago. Today it almost seems cruel to warn them about moral hazard when everyone else's bad decisions seem to get bailed out. But as the city of Littlefield is finding, there's no one waiting in the wings to step in and buy up empty jail cells with no contracts attached to them. Jail-bed supply significantly exceeds demand statewide. With the exception of immigration detention, the bubble has burst. As has, hopefully, the "jail as profit center" myth among Texas county commissioners.