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Savings tough to calculate in Florida prison privatization plan

TALLAHASSEE — As state lawmakers consider a massive expansion of prison privatization, one number dominates the debate: 7 percent.

That's how much savings the legislation requires of private prison operators compared to state-run prisons.

"I believe in it," says Senate President Mike Haridopolos, R-Merritt Island. "It's incumbent upon me to find the best deal for the taxpayer."

But that number is subjective, and the state's own analysts warn against comparing prison costs because no two prisons are alike and it's difficult to make precise cost comparisons between public and private prisons.

"You can make something look like a savings on paper," says Sen. Paula Dockery, R-Lakeland. "We're not saving money. Absolutely not."

Privatization has polarized the Legislature into two camps: One sees outsourcing as a proven way to cut costs; the other views it as a risky undertaking riddled with hidden costs.

Senate Bill 2038 would privatize 27 prisons and work camps in 18 counties from Charlotte County to the Keys. More than 4,300 state workers would lose their jobs, though many likely would be offered them back, at reduced pay and benefits, working for a private vendor.

Seven Florida prisons now are run by private, for-profit companies. They are in Bay, Columbia, Gadsden, Glades, Jackson, Palm Beach and Santa Rosa counties.

Supporters point to statistics showing that those prisons cost from 7 percent to 28 percent less to operate than state-run prisons.

But the 28 percent figure, at a 1,500-bed women's prison in Gadsden, is "artificially high," a state analysis said, because no state-run women's prison was comparable in size at the time.

An April 2010 report by the Legislature's independent research arm said savings were due to lower retirement benefits for private prison workers and higher costs for programs and overhead at state prisons, such as substance abuse treatment and transportation.

"While significant, these cost savings estimates are subject to caveats and should be evaluated cautiously," the report said.

The report said an apples-to-apples comparison of the cost of running public and private prisons is difficult because of the many factors involved: size, location, the design and age of the prison, the physical and mental health of the inmates, their custody level and the extent of programs available to inmates.

"Such adjustments to 'equalize' Florida's public and private prisons historically have been controversial," said the report by OPPAGA, the Office of Program Policy Analysis and Government Accountability.

Other factors figuring into the privatization debate include:

Leave payouts. Through Jan. 19, the prison system said, payouts of unused sick leave and vacation time to departed employees at South Florida prisons cost $19 million, more than the first year's total savings. The vendors will be asked to repay $8 million of those costs.

Bumping. The union contract for correctional officers allows outsourced officers to "bump" or take the jobs of those with less seniority, creating a ripple effect throughout the state.

Inmate transfers. Hundreds of felons classified as close management have been shifted out of South Florida to prisons upstate. That could make the region more attractive to for-profit prison firms because it could lower their security costs and make it easier for them to reach the 7 percent target savings.

South Florida prisons currently house 79 inmates classified as close management, typically inmates serving sentences from 15 years to life, who cost more money to supervise than less-dangerous prisoners because they are more prone to acts of violence.

The state says the transfers started in 2009 with the opening of a new, high-security prison in Suwannee County.

"I have no indication that they have been moved as it relates to privatization," Corrections Secretary Ken Tucker told a Senate committee last week. "The department would have no interest in making it less dangerous. … We're going to entrust private prisons with similar level of inmates."

Tucker said close-management prisons in Santa Rosa, Bradford, Union and Suwannee counties and a secure women's prison at Lowell all make more sense because they are cheaper to operate than older, inefficient prisons in South Florida.

Former Corrections Secretary James McDonough, who ran the agency under former Gov. Jeb Bush, says the privatization of South Florida is moving too fast.

"While the privatization idea at this scale may prove to be a positive, at the moment we have no analytical way of knowing that to be true," McDonough said.

"We should look before we leap."

Steve Bousquet can be reached at or (850) 224-7263.