---

---

Privatization Issues

Commonwealth Study: Prison Privatization (Summary)

Pennsylvania, where the prison population has grown by 294 percent since 1980, is expecting an increase of another 32 percent in the next four years. Although 15 new prisons have been built in the last 13 years, the number of inmates today exceeds capacity by more than 10,000, a number which is expected to grow to 14,400 by 2000. Over the past three years, the average cost per prisoner in the system has increased by 17.6 percent, from $19,858 annually to $23,353. At least 10 states, the federal government, the United Kingdom and Australia are currently benefiting from private construction and operation of prisons. Although savings vary between facilities, researchers estimate that Pennsylvania would likely save at least 10 percent per year in operating costs and 20 percent in construction costs. Thus it could save $551.25 million over 20 years if it privatized the construction of the 15 new prisons needed. It could also save an additional $33.77 million annually in operating expenses by allowing private companies to run the new prisons. And if operation of the present system were privatized, the state would save an additional $76 million in operating expenses. Private companies can operate prisons for less than the public sector because they have incentives to achieve performance goals and improve efficiency. Source: Steven Loux, "Prison Privatization in Pennsylvania," January 1996, Commonwealth Foundation, 3544 N. Progress Avenue, Suite 101, Harrisburg, PA 17110.

---

Dallas Headquarters: 12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
Washington Office: 601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
© 2001 NCPA