Texas, other states should decline Corrections Corporation of America's offer to buy prisons

According to the Houston Chronicle's Patti Hart and other reports, the letter Corrections Corporation of America (CXW on the stock exchange) sent to 48 states last month offering to buy their old facilities included a perverse and unconscionable set of proposed conditions: CXW would only buy the prisons "if the selling state would guarantee to keep it filled [to] 90 percent capacity for 20 years."

With incarceration declining nationwide, I understand why CXW is seeking long-term stability. It's the same reason states should turn them down. It appears the incarceration bubble is bursting, with immigration detention the only near-term growth sector in private prisons' portfolio. Texas state prisons are full but incarceration rates are declining, with crime falling at an even steeper rate. Last year for the first time ever, Texas closed a prison unit instead of building or leasing more. In the past four years, the state has reduced the juvenile prison population by more than 2/3, including closing several facilities including a private one in Coke County.

At the county level, despite pockets of overcrowding (caused mostly by local elected officials' aberrant decision making), county jails statewide are terribly overbuilt, operating collectively at 68.4% capacity as of February 1, with 93,535 jail beds statewide and only 63,985 inmates to fill them. Imagine what a fix counties would be in if 5 years ago they'd sold their facilities to a private company and guaranteed them 90% capacity!

CXW and (even more so) its chief competitor the GEO Group are already overladen to the gills with debt, so the offer only makes sense if states agree to guarantee them a 90% occupancy rate two decades into the future, and any state pol who fell for that would be buying a pig in a poke. Conversely, if the company were to buy old prisons without such a guarantee, they'd be the suckers. State Senate Criminal Justice Committee Chairman John Whitmire has been quoted in press reports saying he disfavors the idea, and Grits hopes Texas officials as well as leaders in other states universally follow his lead.