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Privatization of Prisons

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Privatization of Prisons

Introduction

I am writing this memo in response to a request to analyze the benefits and disadvantages of privatized prison systems. With the present economic environment, it is important to explore all options that could reduce the state’s deficit. This research project will explore the cost benefits to the privatization of California’s prison system, in comparison to other cost saving options. It will use statistics from other states that use private prison systems, as well as federal detention facilities that are privately managed. The purpose of this analysis is to reduce spending as a whole, and to not place a financial burden on local governments. It is also important to note that prison sentences are not only a form of punishment, but also a deterrent for future criminal activity. It does not serve its purpose in its entirety when sentences are reduced due to budget inefficiencies.

Findings

The fiscal year, 2011-2012, has a $10,017,591,000 budget for the California Department of Corrections and Rehabilitation. This budget includes all adult corrections and rehabilitation operations, juvenile operations, parole operations, inmate health care, administration, and education and vocations programs (CDCR). It remains to be a difficult comparison between private enterprise and government entities due to the difference in accounting practices. Public agencies do not always include all expenses incurred at the specific agency level, such as; accounting, data processing and legal representation, to name a few (Mackinac). There is evidence, however, that shows economic benefits towards privatization.

In a 1989 study conducted by Charles H. Logan and Bill W. McGriff, a 5.4 percent reduction in operating cost were reported when a private firm took over operations at a Hamilton County, Tennessee, penal farm. In 1991, the

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