What we expect from government versus what we need
By David H. Landon
Let’s start our discussion with a very basic premise. We can no longer afford all of the government that we have come to expect. That’s very different from saying that we can no longer afford all of the government that we need. Differentiating between what we expect from government and what we actually need from government is the critical challenge before elected officials at every level of government today. One way to cut the size of government is to eliminate those programs that could be delivered more efficiently by the private sector. In Ohio, as well as 28 other state governments, an area in which government is looking for help by the private sector to scale back the size of government is the prison system. Last week, the Kasich administration took an important step towards that end.
The Ohio Department of Rehabilitation and Correction has a budget of nearly $3 billion and employs over 14,000 workers. These state workers are hired to supervise the incarceration of over 51,000 inmates. These state employees have a vested interest in keeping prisons open and prison populations high, as their jobs obviously depend upon it. Less than 10 percent of these inmates are incarcerated for a crime of violence. Reducing that prison population to those who pose a real danger to society and thus reducing the size of the tab to be paid by the taxpayer should be the goal.
However, challenging the notion that we need to keep putting more and more people in prison runs counter to an entire industry that thrives and profits on providing services to that prison population. The Kasich administration, partly by necessity dictated by the $8 billion deficit and partly because it seems to be John Kasich’s personality, has decided to challenge the status quo.
First, Ohio redefined who should be in prison in a sweeping change to the Ohio criminal code. Thousands of non-violent Ohio prison inmates will have their sentences reduced under a bill signed by Kasich into law last June in an effort to save the state nearly $1 billion in prison costs.
The legislation will dramatically change how Ohio handles roughly 10,000 non-violent first-time offenders, 50,000 state prison inmates and 260,000 people on probation. The legislation directs judges to sentence non-violent, first-time offenders to community control, job training or treatment programs. Along with other changes, it also increases the threshold for felony theft from $500 to $1,000. Legislative analyses predict the measure would ease prison overcrowding and save taxpayers up to $78 million a year. In addition, the changes will allow the state to avoid spending $925 million to build and operate new prison beds over the next several years. This legislation had overwhelming bipartisan support.
The next part of the governor’s plan is more controversial. The Kasich administration has turned to privatization of prisons to find additional ways to save tax dollars and reduce the size of state government. Two weeks ago, the state of Ohio sold the Lake Erie Correctional Institution in Ashtabula County for $72.7 million to the Corrections Corporation of America (CCA), a private company in the prison management business. The sale and privatization of this prison will reduce overhead costs with a savings of approximately $13 million annually. The state currently pays about $70 per diem per inmate. Under the agreement with (CCA) the state will pay CCA $44.25 per inmate per day. That’s a significant savings.
The state employees who work for Lake Erie Correctional are members of a state employees’ public service union. As you might imagine they are not happy about a non-union owner taking over the facility. But this is a growing trend across the country precisely because of the significant cost savings. In March 2009, the U.S. Bureau of Justice Statistics reported that privately contracted facilities, as of December 2008, then held 7.8 percent of all adult inmates in the U.S., up from 7.4 percent in June 2008. This represented about one in every 13 adults in prison. A 2009 survey of 30 state correctional agencies, many of which use privately operated correctional facilities, also demonstrated contracted prisons are lower in cost than the public sector by 28 percent.
Opponents argue that the cost savings comes at the expense of lower wages and lower benefits paid to the employees at these privately run facilities. The question is where do we want to place our limited resources? Do we want them used for education, Medicaid and infrastructure? Or do we want to spend the money on the correctional system? We are required by our constitution to balance our budget. That means making difficult spending choices.
And while we’re at it, why is Ohio in the liquor business? In many other states, including our Indiana neighbor, the state licenses private businesses to sell liquor and to be responsible for its own inventory. In Ohio taxpayer money maintains four huge warehouses across the state where all of our liquor is maintained. This is clearly an area where the state is engaged in a service that could be run more efficiently by the private sector. While we’re at it, we should look at the success that Indiana has had in leasing the Indiana Turnpike to a private company at a huge savings in the operational costs of that highway.
We are on the verge of slipping into another recession, if we aren’t already there. With our limited resources available, government needs to differentiate between what we have come to expect from government and what we actually need from government. Privatizing some services previously provided by government is a one common sense solution to our difficult financial situation.
David H. Landon is the former Chairman of the Montgomery County Republican Party Central Committee. He can be reached at