Are Private Prisons Cost Effective?

Three convicted murderers escaped from a private medium-security prison in Kingman, Arizona. As a cost saving measure Arizona has given up control of most of its prisons to private companies. Private companies like Management Training Corp. and Correction Corporation of America claim they can save governments money by housing their prisoners, but a 2007 audit by the firm MAXIMUS found that private prisons only saved the state $5.49 per inmate per day. An internal report done by the Arizona Department of Corrections found the savings to be just $2.75 per inmate per day with some private prisons actually costing more than government run prisons. When you factor in that private companies pay lower wages and fewer or no benefits, the small amount of savings don't make sense. Paying private companies actually hurts communities because tax money is now going out of state as corporate profits instead of as wages to city, county or state employees.

Citizens in Arizona are questioning what the true costs are when using private companies to house prisoners. The dollar savings doesn't add up to what they were told and now they are wondering how secure these private facilities are.

Click here to read the full story in CNN Money.