Wednesday, January 25, 2012

Florida Prison Privatization Moves Forward

Florida's push to privatize its prisons moved forward on Tuesday (Jan 24) as the proposal cleared a House committee in the state legislature.  Miami Herald coverage is here.  The votes have split along party lines, with Republicans on the relevant legislative committees insisting privatization will save taxpayer money, and Democrats opposing it.  

Today, this press release from the Teamsters Union requests that the legislature conduct a thorough cost-benefit analysis of the privatization proposal before lurching forward.  The Teamsters represent the prison guards who stand to lose their jobs in the process.  Here is an informative quote:

The group says it estimates that the cost savings proponents say will occur will be greatly diminished when it factors in other costs such as the payout of vacation, sick leave and holiday to public employees who would be replaced in the privatization.  
“We simply do not have all the facts to know the total economic impact this could have,” said former state Sen. Ron Silver, who is representing the Teamsters. “It would be reckless to run into what would be the biggest prison privatization in the country’s history without a thorough, non-partisan analysis of the facts.”

Even if the state initially obtains some savings (Republicans estimate it at 7% ) in year one, there is no way to guarantee that the costs will not increase dramatically once the private firms have the contract locked in and the state no longer has the prison personnel to end the contract and take back the prison.  The state becomes dependent, a hostage to the contract.  There is nothing to keep the firms from low-balling to get the contract and then enjoying the prison budget increases as they roll in year after year. 

In addition, the state of Florida will have to spend more money elsewhere in the budget for contract management personnel - these are complex contracts that require experienced procurement managers, which offsets the proposed savings.  Moreover, the private firms running the prisons turn around and lobby for longer prison sentences for criminals and for more behavior to be illegal - more inmates serving longer sentences means more profit for the private contractor.  READ MORE....

The proposed job losses for the state are staggering.  Four thousand jobs.  If any other single employer announced that it was cutting 4000 jobs (say, Disney), lawmakers would be alarmed at the increased unemployment rate in Florida - and the strain this would put on various state service agencies.  Eventually, the new private prisons will hire many of the same guards, due to their experience - but hiring the same individuals to operate the prisons undermines the argument that privatization replaces inefficient state employees with highly-motivated private-sector workers.

The privatization advocates usually respond, "Now those same prison guards are going to have the discipline of market forces working on them, threatening to sack the inefficient ones."  Yet no competition remains after the state privatizes.  Once a firm has locked in this contract and the state no longer has the personnel to take the prisons back, the workers have no more incentive to be "efficient" than they did when they were on the state payroll.  

Previous: Private Prison Corporations Buy Policy (Nov. 23, 2011)

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