A news service for the people of Michigan from the Mackinac Center for Public Policy

Prison Privatization Bill Locked Up By House Inaction

Bill would require savings of at least 10 percent for private prisons to operate

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Legislation to allow the state to save taxpayer dollars by using privately run prisons is stuck in the Michigan House of Representatives.

Under the measure (House Bills 5174 and 5177), the Michigan Department of Corrections could house prisoners in privately operated prisons — but only if it could save 10 percent in costs by doing so.

Legislation that nearly mirrors House Bills 5174 and 5177 has already been passed by the Michigan Senate. Therefore, if the House could put together the votes needed to pass the bills, the measure's eventual enactment would be very likely.

However, even with the 10 percent savings requirement, the 55 “yes” votes required for passage in the House are apparently not readily lining up. None of the House Democrats are expected to support the bill, but the Republicans have more than enough members to pass it. That mean that there are at least eight House Republicans unwilling to commit to voting “yes” on the legislation.

Michigan's corrections system (prisons) has long been one of the most expensive in nation.

“This legislation would give the Department of Corrections one more tool in its toolbox to control spending,” said Rep. Jon Bumstead, R-Newaygo, a supporter of the bills. “In the last election we ran on the issue of protecting taxpayer dollars and controlling costs. This legislation is something we can do now that would be keeping that promise.

“But what we're seeing so far is the corrections [officers] unions and the UAW being very active on this,” Bumstead continued. “That makes it harder to get the votes we need for passage.”

The Michigan Corrections Organization, the union representing public sector corrections officers, is monitoring the progress (or lack thereof) on the bills.

Last week, its Facebook page included comments like the following:

“No vote on privatization bills today and legislature will not reconvene until Tuesday. Keep reaching out to legislators and asking them to stand strong. This battle is far from over.”

Privately-owned North Lake Correctional Facility in Baldwin is at the heart of the immediate situation and is specifically mentioned in the legislation. The privately run prison is owned by Geo Group.

Between 1999 and 2005 the Geo-operated prison at Baldwin was used by MDOC to house youth offenders. But in 2005, under former Gov. Jennifer Granholm, the prison was closed. Since then it has periodically contracted to house prisoners from other states.

The argument given for closing the prison was a Michigan Auditor General study that ranked the Baldwin prison as the 4th most expensive of Michigan's prisons, in terms of daily costs per prisoner.

The website for MCO Local 526M, which is affiliated with the Service Employees International Union, has posted an article using the '05 Auditor General ranking as evidence as an argument against passage of the bill.

Those who support privatizing prisons argue that the cost per prisoner calculation in the '05 study was fatally flawed because the facility's prisoner population had been depleted when the study was performed.

A facility operating at only half capacity or less would virtually always cost more per prisoner than when it was operating at full capacity. At the time of the study, MDOC, operating as part of the Granholm administration, controlled how many prisoners the Baldwin prison housed.

In addition, proponents of the bills argue that the 10 percent savings requirement in the legislation eliminates concerns about the '05 auditor general's rankings anyway.

MCO officials did not respond to a phone call for comment.

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See also:

The Benefits of Prison Spending Reform

Teachers in Conventional Public Schools Earn More Than Prison Teachers

The $100K-Plus Employees in Michigan's Prison System

Prison Guards vs. Teachers: Who Is Worth More?