Gov. John Kasich promotes privatization as a way for state government to save money and deliver public services more efficiently. But a credible new study suggests the Kasich administration has yet to make a compelling case for selling five state prisons to private contractors.
The liberal advocacy group Policy Matters Ohio examined purported savings over the past decade from private operation of two state prisons. It concludes that the state’s methods for calculating seemingly robust savings from the experiment were “riddled with errors, oversights, and omissions of significant data” and were “potentially tainted by controversial accounting assumptions.” Once those errors were corrected, the study says, the actual savings were far less.
The Ohio Department of Rehabilitation and Correction concedes that previous computations of cost savings were inconsistent and imprecise. A department spokesman says the Kasich administration is using a more accurate method based on actual operating costs of established prisons.
The state posted bids for the purchase and sale of the five prisons before the new accounting method came on line. The administration insists updated calculations still show Ohio’s two current private prisons are meeting their legal mandate to produce savings of at least 5 percent over what it would cost the state to run them.
Even so, the new study raises doubts about the cost-saving claims associated with prison privatization. Before the state sells more prisons to private entrepreneurs, the administration must show a compelling fiscal rationale and, just as important, resolve concerns about private prisons’ effectiveness and safety.
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