A new study by the state of Arizona shows that private prisons end up costing the state more than public facilities. From the New York Times:
The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates. But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons — even though they often steer clear of the sickest, costliest inmates.
Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.
The idea that private companies were going to somehow find a radically more efficient way to do something as basic as holding and feeding criminals in a secure building was always pretty much pure fantasy. Private prisons end up having the same basic cost structure as state-run prisons, but with the added cost of the private prisons needing to make a profit.
In actuality, the increased cost to the state of using private prisons is probably much higher than you see with any study that simply does an inmate-to-inmate price comparison.
Private prisons are huge businesses that only exist because of corporate welfare from the state, and their financial success is wholly dependent on keeping incarceration rates high. Allowing private prisons creates a massive lobbying force whose interests are to use the money they are paid by the state to lobby politicians against criminal justice reforms. Such reforms could radically reduce incarceration rates, saving the state huge amounts of money, but hurting private prison profits, so the private prisons have a massive incentive to use the state’s money to fight against the state’s overall financial interests.