Study - Widespread political help goes to private prisons

Monday, October 22, 2001

WASHINGTON -- Politicians have invested heavily in private prisons, but their communities are not necessarily seeing an economic payoff, a new report shows.

The Institute on Taxation and Economic Policy, a Washington-based research center, is urging leaders to end subsidies for prisons.

Over the past 15 years privately run prisons have popped up around the country, as officials looked for alternatives to crowded government facilities.

The institute's Good Jobs First project found that most of the prisons were built with incentive packages that included things like property tax breaks, government financing, training grants and construction help.

"Given the relatively low wages paid by the industry and its limited ripple effect on the larger economy, subsidizing private prisons may not provide much bang for the buck," said the report, which is being released Monday.

About three-quarters of the large private prisons had government subsidies, the report found. The study involved 60 private prisons with 500 beds or more, located in 19 states. Subsidies were given in 17 of the 19 states.

The institute said $628 million in tax-free bonds and other government-issued securities financed some of those private prisons. Voters should have been allowed to decide whether to allow those bonds -- and should be consulted about any future financial help, the institute said.

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