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| As States Struggle with Budget Crises, Governments Spend Large Sums on Economic Development Subsidies for Private Prisons |
| By Good Jobs First |
| Published: 10/26/2001 |
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The nation's state and county governments, reeling from budget problems brought on by a weakening economy and the war on terrorism, have been spending large sums of taxpayer money providing economic development subsidies to private prisons. This is the conclusion of a study released today by Good Jobs First, a national research center tracking state and local economic development practices. The report - entitled 'Jail Breaks: Economic Development Subsidies Given to Private Prisons' - is the first such analysis ever performed on private prisons. The study finds that 73% of the big privately-built and operated prisons have received subsidies such as tax-advantaged financing, property tax reductions or other tax cuts, infrastructure assistance and training grants/tax credits. The study covers 60 prisons with 500 beds or more each. These prisons, located in 19 states, comprise half the private-prison market. Specifically, the study finds that: * At least 44, or 73%, of the facilities received one or more development subsidy. The actual rate is very likely higher, but cannot be determined because state corporate income tax credits are not disclosed. * A total of $628 million in tax-free bonds and other government-issued securities were used to finance 37% of the prisons studied. * 38% received property tax abatements or other tax reductions. * 23% received infrastructure subsidies such as water, sewer or utility hook-ups, access roads and/or other publicly-paid improvements. * Facilities operated by the two largest private prison companies, Corrections Corporation of America and Wackenhut Corrections Corporation, were extensively subsidized. * Not one of the dozens of economic development officials interviewed - covering 83% of the facilities, often with multiple sources - could cite any formal economic impact study or cost-benefit analysis related to the prisons. The full report is available at Good Jobs First's Website, www.goodjobsfirst.org. |
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