For-Profits Get Standing 8 Counts
Two more advocacy groups are in ACU’s corner as its bout against private prison proponents continues. Recently, Not With Our Money! and Good Jobs First landed a one-two punch combination that has stunned their foes.
NWOM! forced Aramark Corporation to withdraw from the Association of Private Correctional and Treatment Organizations (APCTO), an industry trade organization that includes a number of for-profit vendors. NWOM!, based in New York City, is a coalition of young people and educators who feel that for-profit prisons "have no place in a democratic society. Profiteering from the imprisonment of human beings compromises public safety and corrupts justice," reads the group’s mission statement.
Aramark’s announcement came on the heels of the coalition’s successful attempts to deny college and university dining-service contracts to Sodexho Marriott Services, which, like Aramark, gets a significant amount of its revenue from providing food services. Student pressure also forced Sodexho to divest its ownership of 6.5 percent of Corrections Corporation of America stock.
These actions forced Aramark’s hand. In a memo to NWOM!, CEO Joseph Neubauer wrote: "Thank you for bringing to my attention the letter concerning Aramark’s apparent involvement with APCTO. I was not personally aware of this matter since it had not been properly reviewed by the appropriate corporate people. As you can see ... we have discontinued any further involvement with APCTO."
In Washington, D.C., Good Jobs First (GJF) released a report confirming that privately built and operated prisons have received subsidies such as tax-advantaged financing, property tax reductions, other tax cuts and credits, infrastructure assistance and training grants. The study covered more than half of the country’s prisons that contain at least 500 beds.
GJF is a project of the Institute on Taxation and Economic Policy. The project provides information to the public, media and lawmakers concerning state and local job subsidies. Its goal is to ensure that businesses receiving them are held accountable for their practices. The results of the study, entitled Jail Breaks: Economic Development Subsidies Given to Private Prisons, in summary:
- At least 44, or 73 percent, of the facilities received one or more development subsidies. The actual rate is presumably higher, but cannot be determined because state corporate income tax credits are not disclosed.
- A total of $628 million in tax-free bonds and other government-issued securities were used to finance more than one-third of the prisons studied.
- Thirty-eight percent received property tax abatements or other tax reductions.
- Twenty-three percent received such infrastructure subsidies as water, sewer or utility hook-ups, access roads and/or other publicly paid improvements.
- Facilities operated by the two largest private prison companies, Corrections Corporation of America and Wackenhut Corrections Corporation, were extensively subsidized.
- Not one of the dozens of economic development officials interviewed — covering 83 percent of the facilities, often with multiple sources — could cite any formal economic-impact studies or cost-benefit analyses related to the prisons.
"We are surprised to find subsidies so prevalent," says Philip Mattera, primary author of the study. "We also wonder why they are necessary, given that governments are also paying the prison companies to operate the facilities."
"Whatever the perceived development or contracting benefits of private prisons, they must now be balanced with a full accounting of their costs," says Greg LeRoy, director of GJF. "These massive taxpayer investments should be held to the same standards as any other economic development expenditures."
