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State Corrections Director Charles Ryan made his pitch Tuesday for a new 3,000-bed private prison, but some members of a legislative budget panel were skeptical, with one asking him to cut spending to free up money for education.
Ryan, whose proposal has the support of Republican Gov. Doug Ducey, told the Senate Appropriations Committee that the state needs more prison beds to combat current overcrowding and accommodate a projected increase in inmates.
Ryan's staff told lawmakers that despite a decline in inmates the past few years, more are now violating their probation and being remanded into custody. Ryan projects the state will house an additional 80 inmates a month for at least the next two years, so he is seeking another medium-custody prison.
Ryan's private-prison request is part of Ducey's $1 billion fiscal 2016 spending plan for the state Department of Corrections. The proposed budget, which runs the entire state prison system, is $52 million more than that of last year's. Corrections is one of the few agencies that received a spending increase in Ducey's austere budget plan, which must account for a decline in state revenue.
No action was taken Tuesday on the request to add a seventh private prison. Six private facilities across the state now house about one-sixth of the state's roughly 42,000 inmates.
Democrats Olivia Cajero Bedford and Steve Farley of Tucson challenged Ryan to put inmates in county jails, where they said there are plenty of vacancies.
"It would be better to give our money to the counties, which are struggling, rather than a for-profit prison," Farley said.
County sheriffs, including Maricopa County Sheriff Joe Arpaio, have said they would be happy to take additional inmates from the state, and could do it at a lower cost than private prisons.
But Ryan said county jails are not equipped to provide work, education and treatment programs offered at state-run and private prisons.
Ryan also got pushback from Sen. Kelli Ward, R-Lake Havasu City, who said Ryan needed to cut spending.
"My constituents would like to see us prioritize teachers and kids over criminals," Ward said.
Sen. John Kavanagh, R-Fountain Hills, defended Ryan during the hearing and is among the proponents of private prisons who say the state saves money through them because operators must build the facilities and absorb startup costs. Each facility typically is turned over to the state many years later.
Private-prison operators recoup their startup costs over time by charging a higher rate to house inmates than state facilities.
Ryan and his staff were the only ones allowed to speak before the Senate committee, which took no action on the proposal. The panel is expected to vote on a series of agency spending bills later in the session.
Critics, however, in the past few days have voiced opposition to Arizona funding another private prison.
Arpaio, the Grand Canyon Institute's think tank and a coalition of groups called the Arizona Justice Alliance said funding another private prison would waste tax dollars.
The Grand Canyon Institute, a Phoenix-based centrist organization, projects the state will pay close to $1.5 billion during the next 20 years to operate the new private medium-security facility.
The institute said its research shows Arizona has one of the highest incarceration rates in the country, which drives up costs for taxpayers.
The 1,000-member Arizona Justice Alliance said the state could lower its corrections budget by altering its truth-in-sentencing law for non-violent offenders. The state requires all offenders to serve about 85 percent of their sentences.
County sheriffs say the state could save more money by asking counties to house drunken-driving offenders who are serving sentences of less than a year in private prisons.
There is no surefire way to determine whether cost savings occur with private prisons because the 2012 Republican-controlled Legislature repealed a law that required the DOC to compare state and private prison costs.
Prior DOC studies showed it was less costly to house inmates in state-run facilities.
Arpaio contends county jails and state-run prisons are more efficient and have better trained officers than private prisons.
"History will show that our employees and Corrections employees have higher standards," Arpaio said. "This should not be a money-making operation."
Private prisons accept only the physically and mentally healthiest inmates, which lowers operating costs. The private companies do not house the most violent and dangerous prisoners, who are in state-run close- and maximum-custody facilities.
The private-prison industry has posted significant nationwide profits. Three operators run the half-dozen Arizona facilities.
In 2013, Corrections Corporation of America nearly doubled its profits to $300 million on nearly $1.7 billion in revenue. The company's chief executive was paid nearly $3.3 million, according to CCA's Securities and Exchange Commission filings. The company will announce its 2014 earnings on Feb. 11.
GEO Group, another publicly traded company, has not reported its 2014 earnings. In 2013, the company made $115 million in profits on $1.5 billion in revenue and paid its chief executive $4.6 million.
Management & Training Corp. is privately held and does not disclose its earnings.
The Corrections Department will make a similar budget presentation to the House Appropriations Committee at 2 p.m. today.
Corrections budget
Gov. Doug Ducey proposes to increase spending by $52 million for the Department of Corrections. General-fund spending in fiscal 2015 was $996 million, while the fiscal 2016 proposal is just more than $1 billion.
Private prisons
Arizona has six private prisons. Here are their locations and operators:
• Florence (medium custody), GEO Group.
• Florence-West (minimum custody), GEO Group.
• Phoenix-West (minimum custody), GEO Group.
• Kingman (minimum/medium custody), Management & Training Corp.
• Marana (minimum custody), Management & Training Corp.
• Eloy (medium custody), Corrections Corporation of America.
