In theory, the privatization of government services sounds like a good deal.
Government is chronically inefficient and wasteful. It employs more people to do a job than necessary, expects less output from them and, because it has no profit incentive, doesn’t sweat how much it pays for supplies and other materials.
A well-run business almost always will be able to get a job done for less than a public agency. Operating efficiently under a government contract enables the business to make a nice profit while also saving the taxpayers’ money — a win-win for everyone, or so the theory goes.
The problem is the profit motive in privatization can backfire, with companies squeezing costs so tightly that service suffers or worse. That’s why there are usually minimum standards of performance built into privatization contracts to keep all parties honest.
Those standards, though, are only as good as their enforcement. Because they are being enforced by government officials, including elected officials whose campaigns may be partially bankrolled by the companies getting the public’s business, accountability can become lax.
In Mississippi, one of the biggest endeavors in privatization has been in the prison industry, which the state embraced in the 1990s.
Rather than drive costs down, as private prisons were supposed to, they helped fuel the explosion in the state’s corrections budget. As additional prisons were built and private contractors were hired to run them, the pressure grew in the Legislature to sentence more offenders for longer stretches of time so as to keep the prison cells filled. The private prison industry’s lobbyists pushed for tougher sentencing laws, and legislators were more than eager to accommodate them so as to not get labeled as soft on crime. In a state already inclined toward punishment over rehabilitation, it helped drive Mississippi’s incarceration rate to one of the highest in the world.
Slowly, Mississippi learned some of its lesson and closed or converted to public operation some of these private prisons, including the Delta Correctional Facility in Greenwood.
Three private prisons still remain, though, all run by the same operator, Utah-based MTC. According to an investigation by The Marshall Project, a nonprofit news organization that focuses on the U.S. criminal justice system, a perverse incentive has been allowed to flourish in the state’s dealings with MTC. The prison operator is being financially rewarded for allowing its facilities to operate at dangerously low staffing levels.
Labor is the biggest cost in operating a prison. It takes a lot of people to watch over, feed and clean up after inmates, and to provide them with medical care and other services.
Most prisons, public and private, have a tough time recruiting and hiring employees, especially prison guards, because of the dangers involved and the low rate of pay. The situation is compounded in Mississippi because of the state’s longstanding inclination to locate most of its prisons in rural, thinly populated areas, where communities tend to be so desperate for economic development that they will welcome prisons, even though these same communities might not have a sufficient labor pool to keep the facilities adequately staffed.
The Marshall Project’s story included interviews with two former prison guards, both of whom were savagely attacked by inmates at facilities being run at the time by a third as many guards as MTC’s contract with Mississippi required.
When staffing falls below contracted levels, MTC is supposed to give back some of the money it received from the state plus pay a penalty. That’s not been happening to any significant degree, The Marshall Project found.
It estimated that from 2013 to 2019, MTC should have repaid nearly $8 million to the state, including $6 million from one prison, the Wilkinson County Correctional Facility, which has had a history of gang infiltration and severe inmate violence. In fact, though, MTC only was required to pay a fraction of the money owed, and not a penny for the staffing shortages at Wilkinson. In essence, the state knowingly made it more lucrative for MTC to operate a dangerous prison than a safe one.
Burl Cain, who was hired as Mississippi’s corrections commissioner in June, claims the Department of Corrections is doing a better job of holding MTC’s feet to the fire. Over the past five months, the state has withheld $208,000 from the company, he claimed.
Mississippi’s publicly operated prisons have not been shining stars either, prompting lawsuits over what has been described as barbaric living conditions at Parchman, for example. But at least they don’t have a profit motive to stay that way.
