(Note: The following was posted as a blog entry on the Students for a Free Economy Web site. SFE is a nonpartisan campus outreach project of the Mackinac Center that promotes the benefits of free markets, civil society and individual liberty.)

Gov. Jennifer Granholm’s 2008 State of the State speech proposed 24 expansions of government, but included precious few words about cutting costs or making state government more efficient. She did make a vague reference to saving money in the prison budget, but there were no details until this was translated in a Detroit News interview: The item was just a renewal of her call to let prisoners out by reforming Michigan’s sentencing guidelines.

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Senate Republicans and some in the right-of-center blogosphere are criticizing this, but there’s nothing intrinsically "conservative" about locking up substantially more people for longer periods than our Midwest neighbor states. Heck, even Mackinac Center scholars have noted that it makes no sense to bankrupt Michigan by locking up so many. The public safety implications are ambiguous at best; as the CRC nicely put it, "The relationship between the higher incarceration rate and crime rates is not apparent."

In contrast, the governor deserves to be strongly criticized for her refusal to even consider privatization. Reportedly, back in 2002 candidate Granholm promised the prison guard union that if elected she’d shut down Michigan’s only privately managed prison — and she kept that promise. To sell it to the public, most of the dangerous prisoners that the privately-run Baldwin "punk prison" was designed for were first removed, and then dishonest figures were created showing higher "costs-per-prisoner." These failed to point out that if you remove most prisoners but require the same number of guards and other fixed costs, the per-prisoner costs will be higher.

Incidentally, the House and Senate Fiscal Agencies repeated that info but gave no hint that there was anything wrong with it. Republicans had control of the House and Senate then, but to my knowledge they never questioned why their "non-partisan" agencies weren’t shedding more light on those flawed analyses.

The Mackinac Center has pointed to research suggesting that privatizing prisons can save hundreds of millions of dollars — not just because the private ones are more efficient — but due to the "dynamic" effects that occur when the publicly-managed prisons are forced to sharpen their own pencils because of they fear losing their "business" to more efficient private competitors. The Center projected that if the savings indicated by that research were applied to Michigan, privatizing just 5 percent of our prisoners would save almost $200 million.

So why does the governor show no interest in investigating this huge cost-saving opportunity? When asked she cites those phony Baldwin figures, but she shouldn’t be let off the hook that easily. The overwhelming consensus of scholarly research on the issue shows that prison privatization saves big bucks. The answer is more likely to be found by asking what she got in return for that reported campaign promise she made to the prison guard union. It looks like just more evidence that the first priority of this state’s government establishments isn’t the public welfare, but that of public employees.

By the way, Michigan prison guards salaries are $43,785 on average, compared to a national average of $33,531, according to an annual salary survey published by the AFT teachers union.


Jack McHugh is senior legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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