1. Introduction

Ensuring public safety is one of the most fundamental functions of government. Several important debates about how best to protect public safety are occurring in the Legislature this year. The stimulus for these debates, in large part, is the growing problem of overcrowding in our prisons and the significant costs that go with it.

In this brief we provide information and perspectives that will help you judge which proposals you think best promote public safety in Idaho. The brief particularly examines the most cost effective ways of protecting our safety given limited resources.

Two fundamental means of protecting public safety are to impose limits on individuals who have harmed us, our property, or our communities through probation and parole or through incarceration. At their most effective, these punishments protect public safety in three ways. First, the threat of punishment deters individuals from committing crimes in the first place. Second, punishment, particularly incarceration, keeps individuals from committing more crimes during the term of their sentence. Third, these punishments are intended to correct or reform those individuals so that they won’t commit crimes again once the punishment is over.

Soaring crime rates in the 1960’s and 1970’s produced an increasing emphasis on incarceration, particularly on its functions of deterrence and restraining further crime. “Tough on crime” reforms, enacted from the 1970s through the present, mean that more individuals have been incarcerated or placed on probation, and that more of these individuals have served longer sentences, than ever before. In the last 35 years the number of adults in prison in the U.S. has grown 700%. We now incarcerate more individuals than any other nation (China, with its vastly larger population, comes in second) and at a higher rate than any other nation (Russia and Cuba come in second and third).

Idaho has enacted its own tough on crime reforms and our prison population has grown even faster than the national average with the number of adults in prison increasing by 700% since 1980. As Governor Otter reported in his state of the state address, one in 34 Idaho adult males is now in prison or on probation or parole.

Research has confirmed that higher rates of incarceration and longer sentences have improved public safety. However, research also indicates that the public safety benefits of increasing incarceration has reached a point of diminishing returns. While studies demonstrate that for every 10% increase in incarceration, we’ve realized between a 2% and 4% decrease in crime, recent research reviews conclude that “analysts are nearly unanimous in their conclusion that continued growth in incarceration will prevent considerably fewer, if any, crimes than past increases did and will cost taxpayers substantially more to achieve."

In spite of evidence of diminishing returns, the prison population in the U.S. is projected to increase at several times the rate of population growth in coming years. The incarcerated population is projected to increase even more rapidly in Idaho. It’s projected that in the next four years the Idaho prison population will grow by more than 20% even though our overall population will grow by less than 8%. If the prison population projections are accurate, we will be tied (with Alaska, following Montana and Arizona) as the state with the third highest incarceration growth rate in the nation. Idaho’s longstanding trend of rapid growth of prisoners has recently abated, however. For five months now the prison population in Idaho has defied projections and has not increased. We’ll discuss the possible reasons for this later.

Besides tough on crime sentencing and parole practices, at least two additional factors contribute to projections that Idaho’s prison population will continue to grow faster than most states. First, our population is growing faster than the nation at large (7.7% as compared to 4.5%). Second, Idaho, like other states in the West, Midwest, and South, is experiencing an epidemic of crimes related to the use of methamphetamine.

The growth of our prison population has also dramatically increased our corrections costs. In the current year, the state will spend $201 million dollars from the general fund for adult and juvenile corrections, a 943% increase over the $19.3 million it spent 20 years ago. If current trends continue, the day is not far away when the state will spend more on corrections than on higher education. Nevertheless, the current cost of incarcerating a prisoner in Idaho is much lower than the national average. At a cost of about $55 per day, or $20,075 per year, Idaho has the 43rd lowest operating cost in the nation.

With the growth in our prison population we’ve also filled our prisons to overflowing. Currently, the state incarcerates 494 prisoners out of state, which costs more than housing them here. Given growth projections, Idaho will need to incarcerate an increasing number of inmates out of state or invest in other options.

We are at a corrections crossroads. Current overcrowding and projections of a steadily increasing prison population mean that we must make an immediate investment in our corrections system. But what investments should we make? One obvious option is to invest in building more prisons. A recent study projects that Idaho will need to undertake the construction of an additional 5,560 beds at a cost of just under $1 billion over the next ten years if we maintain our current approaches to public safety.

There is a range of other options that emphasize investing in reducing the number of people who need to be sent to prison. First, by investing in proven prevention and diversion programs, many suggest, we can provide greater public safety for less money, not to mention improving the lives and productivity of those who would otherwise go to prison. Many of the prevention and diversion efforts most frequently identified address Idaho’s pronounced drug abuse problems. Between 2002 and 2005, Idaho had the fourth highest rate of methamphetamine abuse in the nation. Fifty-two percent of Idaho inmates being released on parole report that their incarceration was the result of methamphetamine abuse and 85% report that they have some kind of substance abuse problem.

A second option that might reduce the need for new prisons involves increased emphasis on the corrective or reform functions of incarceration. Effective programming can have more inmates ready for parole sooner and can reduce the chances that they’ll be re-arrested and return to prison after they’re released.

Third, we could change our sentencing and parole practices so that fewer people are sent to prison and so that those who are sent to prison stay there for a shorter time. Fourth, there are options for improving the coordination between parts of the corrections system that might reduce the need for more prisons.

Most who take a serious look at our corrections system agree that the problem will require investment in all or most of these approaches. But what combination specifically? In the following pages, we review the options. We start by examining the options for building more prison capacity.

2 . Prison Construction

Almost everyone agrees that Idaho must invest in building at least some additional prison capacity. While there is wide consensus that construction is needed, there is much debate surrounding the details.

Two debates deserve particular attention. The first regards funding, ownership, and management options. On one end of the range is the option of a prison that is privately built, owned, and managed from which the state rents beds. On the other end is an entirely public facility—a prison built, owned, and operated by Idaho itself. Other options have a private-public mix.

The second debate regards prison capacity. Should construction on 2,000 or more prison beds start immediately or should we build fewer beds and focus more of our resources on other approaches to the problem?

In the following discussion we’ll consider construction options that will shortly come before the Legislature as well as modifications of these options that have attracted interest. We review these options surrounding private vs. public prisons and ideal prison capacity with an eye towards which options give the best public safety return on tax payer dollars.

Private vs. Public Prisons

Corrections Corporation of America (CCA), the largest corrections management provider in the country, has been energetically arguing the benefits of a privately-owned and managed correctional facility. The Governor and Board of Corrections have been supportive of this approach. Together, CCA, the Governor, and the Board of Corrections have been pushing legislation that would allow for a privately-owned and managed correctional facility in Idaho.  Currently, private prisons are prohibited by state law.  Supporters have argued that there are three main benefits to a private prison.

First, they argue that a private company can build a prison of the same quality more quickly and economically than the state because it is not bound by state procurement practices and because of other efficiencies of private enterprise. There is also an economic advantage because with a private prison the state doesn’t start paying any costs until prisoners are actually housed there.  On the other hand, with a public prison, the state starts incurring expenses as soon as construction is under way, although the prison may not be ready for prisoners for three or four years. Since we already have to pay the higher costs associated with sending almost 500 prisoners out of state, proponents argue, the increased speed of construction is a major advantage. CCA reports that a typical prison built by the private sector can be constructed in 12-18 months, compared to an average of three to four years for publicly built prisons.

Second, private prison supporters argue that this would be an economic boon to Idaho. A private prison would pay property taxes while a public one would not. CCA reports that annual property taxes paid by private corrections providers range from an average of $500,000 to $2 million.  It would also provide more jobs sooner than a public prison would, supporters argue. This is because for a private prison to be sufficiently attractive economically for its company to build in Idaho, it would need to be a much larger prison than what is currently needed by the state. The proposal is for 2,120 beds. Those beds that weren’t needed for Idaho prisoners would be used by prisoners from other states until Idaho needed them.

Third, private prison supporters observe that it is difficult to project prison population growth with certainty.  The use of private prisons provides flexibility for dealing with this uncertainty that is not present when a state builds its own prisons.  Private providers can build capacity for a state customer’s projected needs and release unused space to a different customer while maintaining a fully operational facility.  This also provides a stable source of employment for those working at the facility.  This assurance of available capacity is provided without putting the state in a position of having to pay for beds that it doesn’t need at a given time. 

While the Governor, the Corrections Board, and CCA have been strong supporters of the private prison, this option has generated considerable opposition from Legislators and many others. Three main arguments are offered against a private prison.

First, although opponents of private prisons agree that a private party can build more quickly and efficiently than the state, they argue that in the long term private prisons are more expensive for Idaho. Just as it makes more economic sense to buy a home than to rent if you know you’ll be in your home for a long time, opponents argue, it makes sense for the state to own a facility that it knows it will need for the 50 to 75 year life of the prison. The bonds that would be sold to pay for the prison would be paid off after 30 years. Because of inflation and the low interest rates that the state can obtain because it has the best bond rating available, proponents argue that significant cost savings are realized long before the bonds are paid off.

The property tax advantage is illusory, opponents also argue, because the taxes will be passed on to the state in the price to keep prisoners in the private prison. It's hard to see the advantage, they argue, in using taxpayer money to pay taxes.

The private prison option is not in the state’s economic interests, opponents further argue, because there will be strong profit incentives for a private prison to charge more than would be economical for Idaho to pay. Opponents point to two facts to support this argument. First, because 42 states pay more per bed than Idaho, with some like California paying significantly more, the owner of a private prison will have an economic preference for housing out-of-state prisoners for whom they can charge more. Second, they point out that Corrections Corporation of America has, in fact, recently acted on this preference in Colorado. CCA requested a rate increase for housing Colorado inmates and has threatened to remove those inmates from its facilities and fill beds with out of state inmates if the state doesn’t comply with their request. According to one newspaper report, the move has been called extortion by both Republican and Democratic Legislators in Colorado. 

Second, opponents argue that importing convicted criminals into the state has negative consequences. If out-of-state prisoners commit a crime in an Idaho prison, which is not uncommon, that prisoner becomes Idaho’s responsibility and the state must assume the costs of prosecuting and incarcerating the prisoner for that crime. The families and friends of some out-of-state prisoners may follow them to Idaho, possibly bringing gang or drug activity with them. And out-of-state prisoners may choose to live in Idaho after their sentence is complete. 

Third, opponents argue that there are some functions that are inappropriate for the government to outsource. When the state chooses to put one of its citizens behind bars, they argue, it is exercising its police power in one of its harshest forms. Some argue that this awesome responsibility should not be intermingled with profit motive and the special interest influence that comes with it. A review of state records by The Common Interest found that CCA made $34,000 in donations to candidates in Idaho in the 2006 election, including the legal limit of $10,000 to Governor Otter. The Geo Group, another private prison firm lobbying for a private prison, also donated the legal limit of $5,000 for the general election to Governor Otter. CCA has hired a professional lobbyist who has actively been making CCA’s case to Legislators and the Governor. CCA’s lobbyist, who also represents many other clients, donated more than $8,000 in the 2006 election. 

To address the questions about the economic wisdom of private vs. public prisons, the Idaho Department of Correction (IDOC) has developed estimated cost comparisons. They confirm that a private prison would be less expensive in the early years and that a state owned facility would be more economical in the long run. The first set of estimated cost comparisons that IDOC produced found that in the first year a 2,120 bed private prison would cost the state $60.5 million if Idaho prisoners filled all of its beds while it would cost $65.8 million if the state built and owned the prison. By the second year, the $5.3 million dollar savings of the private prison is reduced to $2.9 million. By the eighth year, the public prison becomes slightly less expensive than the private prison. The cost savings of the public prison over the private prison continue to grow and then jump substantially in the thirtieth year when the state bonds are retired. In that year, housing inmates in the private prison would cost $160.4 million while it would cost $123.9 million to house them in the public prison for a savings advantage of the public prison of $36.5 million.

IDOC’s estimated cost comparisons have themselves become a matter of controversy. The Governor’s office argued that different assumptions could appropriately be used which would suggest a larger and longer lasting cost savings for a private prison. Specifically, the Governor's office requested that IDOC produce a second set of estimated cost comparisons that assumed that for a private prison the cost of operating the prison would increase after the first year, but not the costs of the building itself (the first set of comparisons assumed that both the operation and building costs would go up 3% per year, about the usual rate of inflation). According to the second set of estimated cost comparisons, instead of the private prison being $2.9 million less expensive than the public prison in the second year, it would be $3.3 million less expensive. After that, instead of finding that the cost advantage of the private prison over the public prison declines each subsequent year, the second set of comparisons finds that the cost advantage of the private prison actually increases slightly each year until the 30th year, the year the bond for the public prison is paid off. This is because while the second set of comparisons assumes that none of the costs of the building will go up for the private prison, they assume that some of the building costs, specifically building insurance, will go up at 3% per year for the public prison.

The Governor's office argues that the second set of comparisons is relevant and useful because when it came to negotiating a contract with a private company, the state could credibly argue that the private company faces the costs of building the prison up front and that, therefore, the company should not charge the state increasing amounts each year. Once the company has built the prison, they argue, it owns it and the costs do not go up for the company and should not go up for the state. Accordingly, they argue, this second set may better estimate what the true costs of the private prison would be.

In turn, many argue that the second set of comparisons is unrealistic and that the first set is more accurate. First, they argue, a private company will not typically pay cash to build a large prison, but will take out debt to construct it. Because the state has the best bond rating available and their bonds get beneficial tax treatment, the state's debt service for building a prison will be less expensive, not more expensive than a private company's. Second, critics of the second set of comparisons argue that a private company is making an enormous capital investment in building a prison and that its aim in making such a capital investment is to generate profit.  The stockholders of a private company expect to earn a healthy return on their investment. Critics of the second set of comparisons argue that no private company would agree to terms that didn't allow the company to realize a return on its investment beyond the cost of its debt service, particularly when many other states pay substantially more to house prisoners than Idaho does. They point to Colorado's current experience with CCA as evidence of this.  If anything, they argue, even the first set underestimates the cost of the private prison option because it doesn’t factor in a profit margin.

CCA argues that IDOC’s estimated cost comparisons, particularly the first set, do not fully capture the cost savings of a private prison because they assume that the state can build a facility at a cost comparable to that of the private sector.  CCA and many others argue, however, that the private sector can build more quickly and efficiently, for the reasons mentioned above. CCA also responds to the criticism about their request to increase rates in Colorado by arguing that a rate increase now is only fair since the rate Colorado is currently paying is less than what it paid for the same services in 2000.  Opponents respond that while this is true, it nevertheless demonstrates that a private prison puts a state at the mercy of the owner, given the leverage that they have. 

Beyond arguing that a private prison is sufficiently more cost effective for a sufficiently long time to make it preferable to the higher early costs of a public prison, the Governor’s staff has argued that the state can build protections against the Colorado situation into the contract.

With regard to the problems that might come with bringing in out-of-state prisoners, proponents argue that few friends and family members follow inmates. They also point out that the state would have a right to reject any out-of-state prisoner it didn’t want in Idaho because, for example, they were violent sex offenders or involved in gang activity or drug trafficking. The state could also require that an out-of-state prisoner be taken back out of Idaho for some period of time prior to that prisoner’s release.

In response to the criticism that a private prison is an inappropriate delegation of the state’s police power, proponents argue that the state can build in whatever level of oversight it wishes.  Proponents point to 25 years of experience with private contract providers who now are used at the federal level and in half of the states.  Through that experience, they argue, it has become clear that private providers can be a reliable and appropriate part of the country’s corrections system.
 
Many opponents of privately built, owned, and managed prisons, nevertheless believe that there are appropriate ways to leverage the unique advantages of the private sector in this area. For example, many are pleased with the private/public partnership at the Idaho Correctional Center south of Boise. This prison is owned by the state, but the state contracted with CCA to build and operate it. This allowed the state to benefit from the speed and efficiency of private construction while avoiding the expenses that privately owned prisons impose on a state in later years. Proponents of this approach also argue that this leaves the state in control and free to change contractors if the state is unhappy with the arrangement, rather than being locked in with a privately owned prison. Another public/private variation would be to have the state "lease to own" a prison that a private company would build and potentially operate.

Prison Capacity

Beyond the question of whether new prisons should be public, private, or involve some sort of public/private partnership is the question of how many new prisons beds should be added to the system. This debate regarding capacity is complicated—happily—by the fact that in the last five months our prison population has held steady despite projected growth of 200 inmates. If this trend of below-forecasted growth continues, Idaho’s need for prison beds may be less than experts currently anticipate.

The primary driver for considering building a 2,120 bed facility now is the interest in a private prison. If the state builds a public prison or enters into a public/private partnership for a new prison, most suggest that it should be in the range of 500 – 1,100 beds.

Another alternative would be for the state to undertake the construction of more beds at existing facilities. For example, this year the Idaho Department of Corrections (IDOC) and the Governor have requested roughly $5 million in funding to convert an existing building at the Idaho Correctional Center into a housing unit of 304 minimum custody beds. Similar expansion could occur at county facilities. IDOC currently houses a significant number of inmates in county jails. Many argue that the state should investigate the expansion of these state-county partnerships in order to house state inmates. Proponents observe that this would keep inmates nearer the support of their family and friends. Opponents argue that effective programming isn't available in county jails.

Those who support more modest investments in prison capacity argue that there is a range of more cost effective ways of enhancing our public safety than building prisons, such as investing in drug abuse prevention and treatment and in drug courts. Consequently, they argue, the state would be well advised to spend less on prisons and apply the savings to these more cost effective measures. It is particularly important to follow this strategy right now, proponents argue, because many indicators point to a slowing economy that will mean tighter revenues over the next few years. Like has happened in the past, they argue, the money that we commit to prison construction will make it impossible to invest as fully as is warranted in options that would prevent us from needing so many prison beds.

Those who support more ambitious investments in prison capacity argue that even if the state invests in initiatives that may slow the growth of the state’s prison population, we are already far enough behind that we will still need a substantial investment in prison capacity. Moreover, they argue, there are economies of scale in investing in one larger prison right now than in doing it piecemeal on a smaller scale.

IDOC’s cost comparisons provide some data on these arguments. IDOC’s first set of comparisons estimated that in the first year the costs of the state owned 1,060 bed facility would be $34.6 million, as opposed to the $65.8 million for the state built 2,120 bed facility. The $31.2 million savings could be spent on initiatives to slow the growth of our prison population, but because of economies of scale, building half the capacity doesn’t cut the costs in half.

It’s clear that whether we build additional prisons using the private or public options, any significant increase in prison capacity will be expensive. Are there realistic and practical alternatives to prison construction that would maintain or even enhance public safety but cost less? We now turn to a review of the most promising policy options that would slow the growth of the prison population. First, the brief examines alternatives to incarceration in the form of prevention and diversion programs. Second, we review options for investing in programming for offenders to reduce the chances that they’ll be re-arrested and return to prison after they’re released. Third, we examine possible changes to our sentencing and parole practices. Finally, we review possible improvements in the coordination among parts of the correction system.

3. Alternatives to Incarceration

As the number of prisoners and the costs of incarcerating them have grown significantly in recent decades, so have the efforts to find cost effective alternatives. Of course, a broad range of initiatives can affect prison populations, including programs to improve the economy and the education system. For purposes of this brief, we have restricted our examination to programs more specifically aimed at preventing crime or diverting those convicted of crime into alternatives that are more effective than prison.

Rigorous empirical evaluations of these efforts nationally have shown that many of these alternatives have either not been effective at reducing crime or have cost more tha