Looking For Savings In The Corrections Budget
Despite fewer prisoners and employees, state spends more on prison system
In response to Gov. Rick Snyder's proposal to increase the gas tax and auto registration fees, many legislators are looking for alternatives.
This has increased the emphasis on trying to squeeze as many dollars as possible out of existing revenue.
As lawmakers search for potential road funding dollars, one of the state's most expensive departments isn't likely to be left out of the equation. Costing $2 billion annually, the Michigan Department of Corrections continues to take a big bite out of Michigan's budget.
The problem is, the process of how the Department of Corrections spends its money is a bureaucratic mess.
Rep. Greg MacMaster, R-Kewadin, chair of the House Appropriations Subcommittee on Corrections, said he thinks a lot of savings could be found in the corrections budget.
"I would say that, if we hold the department accountable, we could find savings in excess of $100 million," Rep. MacMaster said. "We need to clean up the RFP (request for proposal) process. I'm considering moving to have a dialog about this in committee."
An RPF is when a department asks for bids on a job. It describes the preliminary requirements for a commodity or service that's being sought. However, for years lawmakers have complained that they've found it difficult to get a handle on why and what the Michigan Department of Corrections is spending money on.
Sen. John Proos, R-St. Joseph, chair of the Senate Appropriations Subcommittee on Corrections, said he preferred not to estimate how much savings might be found in the corrections department budget. But he agreed that it could be a significant amount.
"I have been trying to get the department to benchmark their costs," Sen. Proos said. "To me, that's what cleaning up the corrections RFP situation is all about.
"The department has never been able to tell us its cost structure," Sen. Proos continued. "I think we should use the private sector to tell us its costs, function by function and hold the department to that."
Rep. MacMaster said he thinks the department of corrections should have to bid on its own RFPs.
"If you really think about it, it's a conflict of interest," Rep. MacMaster said. "They should be bidding on their own RFPs and give us a chance to compare. If you look at a 900-bed RFP for corrections, you're talking about $350,000 to $400,000 right there. Think of the potential savings when you're dealing with things like that."
Sen. Proos said he supports a lot of what the MDOC has been doing for the past two years.
“They have found internal savings and I give them credit for that,” Sen. Proos said. “They've taken some positive steps. But if we can identify what the real costs are, we could realize savings. Their costs need to be benchmarked against the private sector.”
A Senate panel last year found savings of $72.5 million mostly by trimming administration costs — including cutting some librarians and therapists.
Today, 43,365 prisoners are in the Michigan system. That's roughly 15 percent fewer than the 51,500 who were in the system in 2006. The MDOC budget for 2006 was about $1.9 billion, roughly $100 million less than the $2 billion Gov. Rick Snyder is recommending for the upcoming fiscal year.
With decrease in prisoners, there also has been a decrease in MDOC employees.
“They've lost over 1,500 employees over the past two years,” Rep. MacMaster said. “They only want about 400 replacements and that seems reasonable.”
Despite fewer prisoners and employees, the budget has increased — mostly because of increased employee costs.
MDOC officials did not respond to requests for comment.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.