Bob Libal at Texas Prison Bidness pointed out a local TV news story out of Waco focused on the fallout from a debt-trap contract jail deal with private prison company Community Education Centers (CEC) that looms over the county budget like a financial Sword of Damocles. County commissioners are considering rescinding their contract with CEC - just as Liberty County is now contemplating after their jail population lowered substantially - because of a lack of available contracts to fill hundreds of unneeded jail beds built as part of an entrepreneurial partnership with the company.
Today Texas jails overall are experiencing substantial vacancy rates in part because of a wave of speculative building by counties since the turn of the century. Statewide, according to the Commission on Jail Standards, about a third of county jail beds were empty as of March 1. Jail populations are plummeting for reasons no one can entirely explain. So many Texas counties that bet on the come - overbuilding their jails hoping to cash in on contract incarceration through public-private partnerships like this one - now must eat their losses, or rather pass them on to taxpayers. And that's where McLennan County Commissioners find themselves today.
TPB adds that "Critiques of CEC's handling of immigration detainees continued [recently] as New York University and New Jersey immigrant rights groups issued a report claiming the company's Delaney Hall facility does not 'fully comply with ICE standards, the report documents problems with everything from access to legal assistance and worship services to adequate health care, food and other basic services for detainees.' (Washington Post, March 23)"
In other private prison news, reports Yahoo! Finance, "SunTrust downgraded Corrections Corp citing expectations for mixed news regarding state budgets and lower occupancy at some facilities." Apparently they don't expect states to take the company up on its recent buy-leaseback offer. Grits has argued that Corrections Corp and, even more so, its main competitor the GEO Group, are too overloaded with debt to justify rosy financial projections, particularly if the incarceration bubble continues to burst.
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Stories in the Waco Media continue to misrepresent the financial operations for the jail, stating that the County is paying CEC and CEC is paying the bonds. Actually, the County and other customers placing inmates at the Harwell jail pay a trustee for the bond holders. The trustee sets aside money to pay the bonds and then, if money is left over, pays CEC up to a certain amount per prisoner. If the jail is above 90% occupancy, the County may get some of its money back. There is a very narrow margin -- at $50.00 per inmate per day, the jail must be 90% or more full or somebody doesn't get all their money.
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