State study says private prisons prove cheaper

State-run prisons cost $16.79 more per person per day than private firms

Posted: Thursday, January 22, 2004

The state could save money by having a private company, rather than the state, operate a prison in Alaska, according to a state Office of Management and Budget study. But the cheapest option is continuing to send inmates to a private prison in Arizona.

The study looked at the potential cost of a 1,200-bed privately run prison in Whittier as envisioned in a bill sponsored by Rep. Mike Hawker, an Anchorage Republican.

It compared that to a state-run, 1,200-bed prison in Sutton, as proposed in legislation by Sen. Lyda Green, a Wasilla Republican. The study also looked at the cost of sending 1,744 inmates a year to Arizona - the number the state expects will exceed existing bed space by 2008.

A summary of the report released Wednesday shows a state-owned prison at Sutton costing $109.29 per person per day, compared with $92.50 for a state-leased, privately operated prison in Whittier and $70.25 to send inmates to Arizona.

Gov. Frank Murkowski campaigned against private prisons when he was running for governor. His spokesman, John Manly, said he was not familiar with the report, but as far as he knows, the governor's position has not changed.

OMB Director Cheryl Frasca said the study was intended to clarify the costs.

"We wanted to establish what the numbers are, based on what we know today, then move on to the bigger question," Frasca said.

The costs for a Whittier prison were based on information provided by Cornell Cos., the firm that would run the Whittier facility, which would be built by the city and leased by the state.

The company provided summarized numbers for items such as personnel costs, but refused to provide such details as pay and benefits per corrections officer, said Neil Gunn, a management analyst for OMB.

Hawker said the report bolsters his argument for putting a privately run prison in Whittier.

"I believe it validates every premise we brought forward," Hawker said

Green disagreed. She said the study does not compare equivalent scenarios because it does not account for such costs as extremely ill inmates or liability for an escape.

Gunn said while Cornell's numbers do include medical care, Green is correct to question whether they accurately reflect costs of treating inmates with very expensive illnesses.

"They're very vague on that," Gunn said. "We don't know the specific assumptions that underlie their medical costs."

The inaccessibility of Whittier - 75 miles southeast of Anchorage - raises the potential for other costs that were difficult to calculate, Gunn said. The Department of Public Safety expects it might need to add troopers there, and the Department of Transportation and Public Facilities might spend more money keeping the state tunnel to Whittier open additional hours each day, Gunn said.

The costs for sending inmates to Arizona were based on the state's current contract with Corrections Corp. of America, which houses about 700 of the 4,800 Alaskans in some type of state custody.

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