Commentary: Mixed Messages on Prison Spending

Current Republican caucuses in the Michigan Legislature are generally more fiscally conservative than in previous years, but the incentives for individual members to serve the political system ahead of the people are no less strong.

Prison spending provides a useful case study.

Despite having fewer prisoners, overall prison spending is 26 percent higher than in 2000, although it has fallen a very small amount since hitting a peak in 2008. This has frustrated some lawmakers. Sen. John Proos, R-St. Joseph, chairs the Senate’s appropriations subcommittee for corrections, and Mirs News reported last week he thinks such high spending “doesn’t make sense” given that “the prison system losing 14 facilities and being 8,000 prisoners lighter” than seven years ago (Mirs’ characterization of his words).

As Michigan Capitol Confidential reported Saturday, Proos and his colleagues are trying to change that, and in the process are exposing just how bloated and wasteful the system really is.

“We found that some prisons have up to four library staff members,” Proos told CapCon. In addition to $5.6 million in savings from “right-sizing” prison library staff, his committee removed funding for 300 assistant resident unit supervisors, saving another $32.1 million.

These scissors-cuts are laudable, but represent a very small portion of the $2 billion prison budget. More important, they do nothing to change an underlying incentive structure that encourages more spending instead of greater efficiency. Unless they change that dynamic, legislators risk finding themselves in a “whack-a-mole” match, with the politically-adroit prison bureaucracy and unions steadily replacing old bloat with new.

Which leads to another development recently reported by CapCon, the prison guard union’s success so far at stopping an effort to change those incentives, a very modest prison privatization bill in the House, where Republicans hold a 66-44 majority. It’s sponsored by Rep. Jon Bumstead, R-Newaygo, who told CapCon, “(W)hat we're seeing so far is the corrections unions and the UAW being very active on this.”

In plain-English, that means right now at least eight House Republicans are actively helping the union bosses halt real reform. If this holds, it will be just the latest in a long string of prison union wins.

For example, in 2002, gubernatorial candidate Jennifer Granholm publically promised the SEIU-affiliated prison guards union she would shut down Michigan’s first and only experiment in privatized prisons, a so-called “punk prison” located in Baldwin. The union later crowed in its newsletter, “Last year Governor Granholm’s budget eliminated funding for the Michigan Youth Correctional Facility . . . fulfilling a promise Candidate Granholm had made to MCO.”

Government employee unions fear privatization because they understand it changes the dynamics that generate ever-higher spending. More than one study has shown how having even a small percentage of prisoners in privatized prisons generates savings throughout the system, because managers and unions in the unprivatized prisons are forced to “sharpen their pencils” in an effort to avoid the same fate.

Applying the outcomes reported by one such study to Michigan’s prison system suggests that even a small amount of privatization here could save more than $150 million.

Revealing his frustration with system-serving colleagues, Rep. Bumstead told CapCon, “In the last election we ran on the issue of protecting taxpayer dollars and controlling costs. This legislation is something we can do now that would be keeping that promise.”

At least candidate Granholm’s promise to the union bosses was open and public. Some current House Republicans may have given similar promises, but secretly, and while leading voters to expect something different.

On the other side of the aisle, liberals who help artificially increase the cost of core government functions by making themselves handmaidens to rich and powerful government employee unions undermine their claims of wanting to dedicate more resources to helping those left behind in our society.