Let private firms run some prisons

The Detroit News is highlighting ideas from various groups to promote discussion on reform, restructuring government and the economy.

Let private firms run some prisons

Idea 12: Privatize some state prisons -- not just some functions within state-run prisons, but entire facilities.

Why: Extensive research has demonstrated that private prisons tend to be less costly than those operated by government bureaucrats. Beyond this, one study found that privatizing some prisons results in savings at the remaining public ones because it increases the incentives for managers and employees to "sharpen their pencils."

Benefit: A study found that placing just 5 percent of prisoners in privately run prisons saves 14 percent per prisoner systemwide. If these figures were applied to the about $1.35 billion Michigan spends on prison operations and administration each year, it would save almost $190 million. The relevant study also relies on labor law reforms that may not come about right away here, so the savings may be less. The state could place more than 5 percent of its prisoners in private facilities, however, which would increase the savings.

How: Seek competitive bids from private companies to run prisons holding an inmate population equal to at least 5 percent of the total.

Obstacles: Michigan's prison guards are represented by a politically powerful and influential union. Opponents will emphasize the "risks" of private prisons. Status quo defenders in prison communities will cite the number of lost jobs at public prisons (while ignoring jobs gained at private ones), and pretend that prisons are a "jobs program" rather than a societal burden and necessary evil. Legislators may throw away some potential savings by granting pension "sweeteners" and early retirements to displaced prison guards.

Source: Mackinac Center for Public Policy