NPR's John Burnett has a terrific story this morning with the same, alliterative title as this post that focuses on a subject familiar to regular Grits readers, but which definitely deserve national attention: Private prison companies that convince local governments to construct more jail space than they need then abandon them when there's no income to cover the debt. In West Texas at the Billy Clayton facility (named after a former Texas House Speaker), Burnett reports:You don't get something for nothing
You can't have freedom for free
You won't get wise
With the sleep still in your eyes
No matter what your dreams might be.- "Something for Nothing," Geddy Lee, Neil Peart, Rush, 1978
For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city. ...Meanwhile, as Grits has been documenting for several years, the same this is happening in Waco, Johnson County, and elsewhere, with no end in sight. "According to the Bureau of Justice Statistics, the total correctional population in the United States is declining for the first time in three decades." As a result, speculative interest from private prison boosters is waning. In particular, says Burnett:
To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked.
The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out.
"It was never voted on by the citizens of Littlefield; [it] is stuck in their craw," says Carl Enloe, retired from Atmos Energy. "They have to pay for it. And the people who's got it going are all up and gone and they left us... "
"...Holdin' the bag!" says Tommy Kelton, another Atmos retiree, completing the sentence.
New Jersey-based Community Education Centers, which has been pulling out of unprofitable jails across Texas, issued a statement that "the current (jail) population fluctuation" is cyclical.FWIW, I've opposed these crackpot deals ever since I first learned of them - years before the incarceration bubble finally burst and their fundamental flaws were exposed. The reason isn't that I disdain private prisons per se but the inherent instability of the financing structure underlying these something-for-nothing deals. You see, I've heard all this rhetoric before.
One of the places where CEC is canceling its contract is Falls County, in central Texas, where a for-profit jail addition is losing money. Now it's up to Falls County Judge Steve Sharp to hustle up jailbirds: "If somebody is out there charging $30 a day for an inmate, we need to charge $28. We really don't have a choice of not filling those beds," he said.
Another place where they're desperate for inmates is Anson, the little town north of Abilene, Texas, once famous for its no-dancing law. Today, Jones County owns a brand-new $34 million prison and an $8 million county jail, both of which sit empty. The prison developers made their money and left. Then the Texas Department of Criminal Justice reneged on a contract to fill the new prison with parole violators. The county's Public Facility Corporation that borrowed the money to build the lockups owes $314,000 a month — with no paying inmates. They've got a year's worth of bond service payments set aside before county officials start to sweat.
"The market has changed nationwide in the last 18 months or two years. It's certainly a different picture than when we started this project. And so we're continuing to work the problem," Jones County Judge Dale Spurgin says.
I happened to cut my teeth as a cub reporter in Texas during the aftermath of the Savings and Loan scandals in the late '80s, and these "free jail" deals remind me of nothing more than they do the road districts and MUDs created by local governments on behalf of speculators to secure government-backed financing for extending infrastructure to far-out private developments. Sometimes these schemes worked out and the districts were later absorbed rather painlessly. But quite a few others went bust, leaving cities and counties holding the bag for investments that were touted as paying for themselves. Whatever happened, the relationship between the eventual outcome of these deals and promises made on the front end by corporate "partners" in these public-private partnerships was virtually nil. The developers could always walk away, as is happening now with the jails, but the impact of default on local governments is politically and economically unacceptable. When the bill comes due, they have no choice but to raise taxes to cover the debt.
That's exactly what's happening in the counties described in this story, and anyone who witnessed those S&L-era failures of road and utility districts saw it coming a mile away. Jails aren't free. They're a fundamental government obligation paid for with taxes. Private prison companies, by contrast, are speculative, profit-seeking ventures with no inherent interest in either public safety or protecting local taxpayers. When hard times hit, they bail. And then, as if on cue, everyone acts surprised.
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