by Jon Coupal | Sacramento

We all know California is swimming in red ink and facing chronic budget troubles.  The state deficit  is at least $20 billion – again.  Debt levels and overwhelming  public pension obligations are unsustainable and, unfortunately, leaders in Sacramento cannot agree on how to tackle these problems.

There does seem to be agreement that there isn’t a single silver bullet solution to this state of  continuous crisis. A great many things are going to have to change  for California to solve these problems.  And, because of its size  and the level of mismanagement, a good place to start is with the  corrections  system.

The Legislative Analyst’s  Office  found that correctional officers account for one in seven state  employees  and eat up a disproportionately large 40 percent of state personnel  spending.  The overcrowded state prisons house 167,000 inmates  in a system designed for 84,000.  As a result, federal judges have  ordered California to release 40,000 inmates. And a federal receiver  has taken over control of California’s prison health care services  due to a class action lawsuit and the poor quality of medical care in  the system.

California is spending over  $8 billion on corrections this year, over 10 percent of the massive  state budget. State taxpayers spend about $133 per inmate – every  day.  Texas, which has the second largest inmate population after  California, spends less than one-third of that amount—about $42.50  per inmate per day.

One reason Texas spends so  much less than California on prisons is its extensive use of  public-private  partnerships. Since 1989, Texas’ annual data shows its cost savings  from private prisons have averaged 15 percent a year. During that time,  there was not a single year in which government-run prisons matched  or were below the private prison costs.

A new Reason Foundation-Howard  Jarvis Taxpayers Foundation study finds that modest expansion of  California’s  current use of public-private partnerships in corrections would save  taxpayers nearly $2 billion over the next five years. Additionally,  more aggressive use of private prisons and contracting out some  operations  of existing prison facilities would save another $400 million to $1.2  billion each year.

The first pivotal step for  California is to build upon its successful experience transferring  inmates  to lower-cost privately operated facilities in other states. Expanding  this strategy by sending an additional 25,000 low- to medium-security  inmates to such facilities — 5,000 per year for five years — would  save $120 million the first year and up to $1.8 billion in savings by  the end of the fifth year.

Not only are costs lower in  private prisons, but the competition they provide helps drive down costs   in state-run prisons as well.  A study of New Mexico — which  contracts out 45 percent of its correctional system — found the state  spent $10,000 less per prisoner per year than peer states that had no  privately-operated correctional facilities. A March 2009 Avondale  Partners  survey of 30 state correctional agencies, many of which use  privately-operated  correctional facilities, found that contracted prisons cost 28 percent  less than state-run facilities.

Public-private partnerships  won’t solve all of the problems facing California’s prison system.   Many other facets — from who gets incarcerated to how to reduce  recidivism  — have to be addressed.  But expanded use of out-of-state private  prisons would be a good start and provide the impetus for some of the  broader changes needed.  The savings from public-private prisons  can take a real bite out of the state’s budget problems.  As  the saying amongst Sacramento lawmakers goes, $1 billion here, $1  billion  there, and pretty soon you are talking real money. CRO

copyright 2010 Howard Jarvis Taxpayers Association

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization with offices in Los Angeles and Sacramento. Leonard Gilroy is  Director  of Government Reform at the Reason Foundation

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