Privatization of Prisons

America's prisons hold 1.9 million prisoners, far more than they were designed to incarcerate. Yet, government agencies (both state and federal) lack the funding required to build new prisons. Some states (such as New York and California) have circumvented the will of the voters and built costly new prisons, leaving a huge burden for taxpayers. Other states (such as Texas) have turned to private companies, which have stepped into that vacuum by building and operating prisons around the nation, though not without controversy.

Operators of private prisons claim they are cheaper, more efficient, and better at rehabilitation than public prisons. Many opponents challenge these assertions, arguing that the cost savings are illusory. Critics claim that any cost savings that are achieved result from cutting corners, which puts public safety at risk. Indeed, the prison industry has been plagued by several celebrated incidents that have prompted some states to re-examine the use of private facilities.

Nowhere has this battle been more heated than in California, which sports the largest annual corrections budget ($4.7 billion). Only a handful of small, private prisons operate in the state. The prison industry has its sights set on claiming more of that huge budget by building and operating larger prisons. So far, however, California's powerful prison guards union has thwarted the industry's attempts to carve a bigger niche in the Golden State. As it stands, the prison

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00 million. Contrast New York's experience with that of Texas, one of the nation's most ardent users of private correctional facilities. Faced with the court order to relieve overcrowding, Texas turned to private entrepreneurs during the 1980s to build prisons and jails (local facilities that generally only house those defendants awaiting trial or convicts serving short sentences). Developers went to impoverished towns and counties and offered the sheriffs profit-sharing deals. The developer would build and operate the jail, and split any proceeds with the sheriff. "Privately run correctional facilities sprang up throughout rural Texas, much the way oil rigs were once raised by wildcatters" (Schlosser, 1998, 1998). Investors in Texas' prison building boom included big names from Wall Street, such as Allstate, Merrill Lynch, Sherson Lehman, and American Express. They soon found themselves facing competition, however, from the state of Texas. A state-financed building boom ensued, and Texas added 100,000 beds during the 1990s. This prompted the private prison operators to scramble around for prisoners. They found their quarry in other states that faced prison overcrowding, and they began importing convicts from all over the

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