The Private Versus Public Prisons Debate: Are The Cost Savings Real?

Since last year's prison break, MTC has added another perimeter fence and more razor wire.
July 29, 2011

On July 30th, 2010, three men escaped a private prison in Kingman, Arizona. Since then there has been much debate over whether private prisons are worth the millions of dollars states are spending on them. At a time when many states are looking to prisons to save money, some say the costs outweigh the benefits.

John McCluskey, Tracy Province and Daniel Renwick walked out of their dormitory at a medium security prison in northwestern Arizona. The door had been propped open with a rock. No guards were patrolling and alarms - that often went off without reason - were ignored. Investigators said their accomplice Casslyn Welch, McCluskey’s cousin and fiancée, parked outside the prison fence and threw wire cutters over it.

Two of the inmates are accused of murdering a couple before a long, expensive manhunt got all three back behind bars.

“It’s not unusual when you have escapes occur at facilities that are well managed and meet standards. You do have human error,” said Odie Washington, spokesman for Utah-based Management and Training Corporation (MTC), the company that owns the Kingman facility.

“You do have break downs in security that requires you to redouble your efforts,” Washington said.

MTC fired several top staff and replaced them with more experienced personnel. The company has spent $839,863 on improvements, including a new alarm system, another perimeter fence covered with razor wire and additional guards.

“Today it’s considered one of the most secure facilities in the state of Arizona as well as similar facilities in the entire country,” Washington said.

The costs of the improvements and the manhunt, not to mention the threat to public safety, all add up. While escapes happen at both private and public facilities, many debate whether private prisons actually save the state money.

Brad Lundahl and his colleagues at the University of Utah were asked by that state to answer that question. Lundahl combed through years of research and concluded that “cost savings from privatizing prisons are not guaranteed and appear minimal.”

“I was really surprised there did not seem to be the difference we expected. And it really seemed to be a draw," Lundahl said. "There did not seem to be an advantage one way or the other. Competition should produce a more efficient system. I think that’s why privatization is viewed as being desirable.”

An Arizona law stipulates that private prisons must create “cost savings.” But the state’s own data indicates that inmates in private prisons can cost $1,600 more per year.

Arizona Department of Corrections Director Charles Ryan told KJZZ after the prison break last year that the savings are on the front end.

“The advantage to the state or state government is the avoidance of the capital construction cost. A 4,000 bed prison might cost $250 million up front," Ryan said. "That’s a lot of money. And given the budget crisis in the state I don’t think that money is there.”

Arizona is currently going ahead with a private contract to build 5,000 prison beds, despite the fact that incarceration rates have leveled off. Ryan said they need the additional beds to relieve already overcrowded facilities.

Arizona received proposals from five companies and is recommending contracts be awarded to four of them, including MTC.