Investment advice: put your money into prisons
Arizona is considering selling off its prisons as part of a larger process of balancing the budget. Even death row would be privately run. The state government predicts the move could save them $100 million dollars, which is a sizable chunk of change until you consider the budget shortfall totals over $2 billion dollars. According to the New York Times:
Private prison companies generally build facilities for a state, then charge them per prisoner to run them. But under the Arizona legislation, a vendor would pay $100 million up front to operate one or more prison complexes. Assuming the company could operate the prisons more cheaply or efficiently than the state, any savings would be equally divided between the state and the private firm.
I can certainly see why governments would want to contract out the building of prisons, or some of the services surrounding the management of prisons. But I get wary when we start talking about wholesale privatization of prisons or any other part of the legal system. The whole “crime doesn’t pay” thing should apply to everybody, not just the criminals. When we start profiting of the results of crime, a whole lot of bad incentives come into play, not the least of which is lobbying to keep current bad laws in place or to crack down even further on easy targets like non-violent offenders.
But there’s more to this story. At the same time as prisons are being privatized, school budgets in Arizona face major shortages. There’s talk of a number of schools being shuttered entirely, massive layoffs, and increased classroom sizes. Last year, in my home town, every teacher with fewer than three years service, every art and music and extra-curricular teacher, every counselor and school psychologist, and a number of other education professionals were advised that their contracts would not be renewed. They were saved by the stimulus. This coming year, with no bailouts for the states, and with over $300 million likely to be cut from education and social services by the state – not to mention the falling local revenues from decreased home values and sales taxes – things look much more grim. [Read more →]
November 20, 2009 26 Comments
