One Billion Dollars and Growing - The Hidden Cost of Bonding Prison Construction

TALLAHASSEE, Fla., April 6, 2011 /PRNewswire-USNewswire/ -- In a new report, the Collins Center and Florida TaxWatch reveal how state lawmakers are saddling taxpayers with $1 billion in debt by using a little-known approach to funding prison construction. The report – "A Billion Dollars and Growing: Why Prison Bonding Is Tougher on Florida's Taxpayers than on Crime" – explores the prison growth that triggered the use of lease revenue bonds to fund construction and the history and hidden costs of bonding to finance prison construction.  

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"Bonding is one of the ways we've avoided facing the consequences of mass incarceration in our state," said April Young, the Collins Center's Vice President for Justice Initiatives, "but we simply cannot afford this."

Florida's prison population has increased significantly over the past three decades. The number of inmates grew from just under 20,000 in 1980 to more than 102,000 in 2010. This growth was accompanied by a spike in public spending on prisons. In 1980, the Corrections budget was $169 million. In FY2010-11, it jumped to nearly $2.4 billion.

To fund the cost of prison construction while meeting the constitutional requirement to balance the state budget, Florida – like many states – resorted to a complicated system of borrowing through the issuing of lease revenue bonds – a type of certificate of debt issued by government or other public entities to raise money. Lease revenue bonding has become a common means to achieve a balanced state budget. However, it is not well understood by the general public even as it obligates them to considerable debt well into the future.

"Florida's taxpayers owe more than $1 billion, or about $200 per household, to pay for recently built state prisons," said Dominic M. Calabro, President and CEO of Florida TaxWatch. "Borrowing to build more prisons is not the way Florida should be addressing public safety. Florida needs to enact comprehensive smart justice reforms that keep us safe while saving us money.

Among the findings detailed in the report:

• There is currently $721.7 million in prison bonding debt outstanding requiring future payments of approximately $1 billion when debt service and interest payments are included.
• The exponential increase in the prison population in recent years cannot be explained by increasing crime rates, since crime rates have steadily declined in the past 20 years.
• Florida leads the nation in incarceration rates and stringency in law and sentencing, making its criminal justice system among the most punitive of the 50 states as measured by more than 40 variables, including average prison sentences, life imprisonment, and prison conditions.
• 43 percent of the total cost of prison construction and expansion between 2006 and 2010 was paid for by issuing lease revenue bonds.

The report outlines some of the policy choices in Florida that have led to the increases in the prison population. It describes the wide range of criminal justice reforms undertaken in other states that are successfully reducing prison populations and saving significant money without endangering public safety. It recommends:

• A moratorium on any new bonding to build prisons until the Governor and Legislature fully disclose to the public the all costs created by the use of prison bonding and give citizens voice in determining whether they want to pay for criminal justice policies that result in the growth of the prison system without increasing public safety.
• Florida legislators seriously review the criminal justice policies and practices which have contributed to the growth of the prison system over the past two decades and have financially strangled the state.
• Florida join the growing number of states that are undertaking a broad range of criminal justice policy reforms led predominantly by conservatives who understand that highly punitive and incarceration-heavy penalties even for minor, non-violent crimes are unsustainable.

To read the report, visit www.CollinsCenter.org. Named after Florida Gov. LeRoy Collins, the nonprofit Collins Center is independent, nonpartisan and dedicated to advancing the understanding of important public policy issues.

Florida TaxWatch is a statewide non-partisan, non-profit research institute that over its 31 year history has become widely recognized as the watchdog of citizens' hard-earned tax dollars. Its mission is to provide the citizens of Florida and public officials with high quality, independent research and education on government revenues, expenditures, taxation, public policies and programs and to increase the productivity and accountability of Florida state and local government. Its support comes from homeowners and retirees, small and large businesses, philanthropic foundations, and professional associations. On the web at www.FloridaTaxWatch.org.

CONTACT:
April M. W. Young, Ph.D.
Vice President for Justice Initiatives
Collins Center
305-377-4484 x1531

Daniel B. Krassner
Vice President of Communications
Florida TaxWatch
850-222-5052

SOURCE Collins Center for Public Policy

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