Florida rolls dice on private prisons

10:46 PM, May. 21, 2011

Written by Bill Cotterell

TALLAHASSEE — Florida’s prison system is betting free-market competition will cut the cost of keeping more than 102,000 criminals locked up.

That’s despite doubts about whether the private sector actually does it cheaper.

“It’s all a numbers game,” said Ken Kopczynski, a lobbyist for the Florida Police Benevolent Association. “There is no way they can do it cheaper than the state without cutting corners on safety and services.”

Gov. Rick Scott has until June 1 to sign a $70 billion state budget that eliminates 4,529 job positions. By far the biggest chunk of that is in the Department of Corrections, the state’s largest agency, which would lose 1,751 positions.

Part of that will be accomplished by closing Hendry and Brevard county prisons, a Tallahassee road camp and two almost-empty boot camps.

Another institution, in Glades County, may also get the ax.

Then, the state hopes to save about $11 million by privatizing operations in 18 South Florida counties.

There are 3,829 correctional officers in the region who can transfer to vacancies in other parts of the state, bump less-senior officers or seek jobs with whatever private companies take over the region.

Pay gap The corrections department said 10,088 inmates serve time in private institutions statewide, almost 10 percent of Florida’s total inmate population.

Nashville-based Corrections Corporation of America, which operates four prisons in Florida, and GEO Group, a Boca Raton-based company that runs two institutions in the state, long dominated the Florida competition. A Gadsden County women’s institution is run by newcomer MTC, which outbid CCA last year.

Once Scott signs the budget, the corrections department will have about six months to devise a bidding plan that puts the 11 institutions and numerous satellite operations under new management, and the competition will start. The department will decide whether to bid the region as one unit, break it into groups or let companies compete prison by prison.

With a short startup time, CCA spokesman Steve Owen said companies taking on state prisons will look to the corrections department ranks for experienced staff. “There is great value in having employees who have correctional experience,” Owen said. “A very large number of our employees are former public employees.”

Data collected by the state show gaps in salary and turnover rates between public and private prisons. A 2010 survey showed entry salaries for state prison guards at $30,808 in North Florida compared to a range of $29,120 to $30,056 at the privately run prisons.

State employees haven’t had a general pay raise in five fiscal years and, starting July 1, they will begin paying 3 percent into the Florida Retirement System. So the private pay rates might be closer to the scaled-down corrections department rates.

Staff turnover in the state system last year was reported at 12 percent, compared to an average of 34 percent among employees of GEO and CCA.

“The reason for that is benefits and salary,” said Kopczynski. “Even with this year’s cuts by the state, it’s still better than with the vendors.”

Savings Scott’s new Department of Corrections secretary, Ed Buss, was not available for an interview last week. He was known as a cost-saving innovator at his previous job, running Indiana’s prison system.

Senate budget chairman JD Alexander, R-Lake Wales, put the 18-county mandate into the spending bill, saying privatization would save 7 percent.

State accountants and legislative committee analysts have produced several reports saying private prisons cut corners on staffing, offer fewer education programs, return inmates to the state system if they have major medical needs, cherry pick the least troublesome offenders and shift administrative costs to the state. Lobbyists for the private companies, who include some of the top talent in Tallahassee, contend that economies of scale and efficient design allow better staff use.

Four factors The Office of Program Policy Analysis and Government Accountability last year reviewed prisons then run by CCA and GEO, finding that they exceeded the 7 percent standard — with reservations. On a scale of “failed” to “excellent,” the Department of Management Services rated the prisons “acceptable.”

“The savings generally come from four major factors: lower retirement contributions on behalf of private correctional officers, greater administrative cost allocation to public prisons, higher estimated rehabilitative program costs in comparable public prisons and a lack of comparable women’s prisons,” said the study of four of the prisons, two each run by GEO and CCA.

Another study by the program policy analysis office in 2000 said that while the state paid 21 percent of salary into the special-risk retirement pool of the state’s retirement system, Wackenhut Co. — forerunner of GEO — capped its pension expense at 2.5 percent. A South Bay prison official said less than 10 percent of employees participated in the company’s retirement plan.

In a 2009 review of CCA’s Lake City prison and GEO’s South Bay facility, the analysis office recommended renewal of the prison contracts. But the accountants said the management services department “needs to address high rates of prison security violations and current inmate family contact policies that do not conform to legislative intent.” Cherry picking The pending budget addresses security and educational concerns that have dogged the private prisons for decades. Budget language requires the corrections department to get reports on assaults committed by inmates, major disciplinary actions, the number of prisoners who’ve improved their literacy, the percentage completing high school-equivalency requirements and the number of prisoners who aren’t back in prison in two years.

Despite claims that the private companies cherry pick young, healthy inmates more motivated to rehabilitation, state law provides that only the Department of Corrections can assign prisoners to institutions. New management services department prison contracts also call for unannounced inspections of private institutions by state prison officers.

Still, Sen. Mike Fasano, R-New Port Richey, who heads the Senate budget committee on criminal justice, expressed grave reservations about the rapid expansion of prison privatization. Locking people up is a government responsibility, he said, not a corporate profit source.

“The savings, many times, do not come to fruition. One reason for that is, as we’ve seen in other states, the cherry picking of inmates and programs being offered,” Fasano said.

He expressed confidence in Buss and the corrections department, but said “the GEOs of the world can easily cherry pick the prisoners they want.”

The Police Benevolent Association claims that cashing out vacation time and other personnel expenses for officers who leave the corrections department — whether they land with the private companies, work at a county jail or go into some other line of work — could cost the state about $32 million. That’s almost triple the projected annual savings of privatization in the region.

The chain-reaction of “bumping” by officers all over the state also troubles Fasano. “There’s no question that the correctional officer and his or her family will take a huge economic hit. Who knows if they’ll have a job?” he said. “The companies say they will pick up guards, but they won’t pick them all up. Private prisons have a much higher ratio of prison population to staff.”