Editor's note: The headline was changed on this story to more accurately reflect the story.

Michigan prison inmates who want to phone home must pay 16 cents per minute, a rate that far exceeds what is now considered reasonable and customary outside prisons. Some people familiar with the system say the state unfairly makes a profit from prisoners and has created a related "slush fund" that should be terminated.

Global Tel-Link is the company contracted by the Michigan Department of Corrections to install and maintain phone equipment in prisons. Under the contract, the firm must record and store prisoner conversations, and analyze them to ensure no illegal activity is discussed.

But an $11 million annual profit that the Department of Corrections is pulling out of the operation has drawn the ire of Bruce Timmons, who was a long-serving legal counsel and policy advisor for the Michigan House Republican caucus. He characterized the operation as a slush fund in written testimony before the House Appropriations Committee.

Timmons was blunt about what he regards as an abuse: “It is past time for this practice of excess inmate phone charges to be exposed and ended.”

The profits from the surcharge are sent to the Program and Special Equipment Fund, an account managed by the Department of Corrections.

Chris Gautz, spokesman for the department, said, “Almost all of that money is directly reinvested in prisoner programming to give prisoners the opportunity to develop their skills, including employment skills, and the use of that fund is dictated by the annual budget bill,” according to MIRS News.

The department has been profiting from inmate phone calls since 1991, according to Prisons and Corrections Forum, a publication of the State Bar of Michigan. According to the publication, prisoners used to pay the same standard collect call rate as the general population of the area where their prison was located. This changed in 2001, when the state contracted with Sprint to be the sole provider of prison phone calls. The Department of Corrections was guaranteed to collect either $13.5 million in commissions or 51% of the gross revenue, whichever was greater.

That money was placed in the department’s special equipment fund to pay for monitoring prisoner calls. Call rates for prisoners were then as low as 10 cents per minute.

In 2011, the department contracted with the current company. Per-minute rates were as high as 20 cents for prepaid calls, 21 cents for debit calls, and 25 cents for collect calls. The department lowered the rate for all calls to 16 cents per minute in 2018. Timmons notes that it was the department that asked for the original higher rate and commission, not the company.

Gautz says that during the COVID-19 pandemic, when prisons were closed to visitors, Global Tel-Link installed video phones so prisoners could see the other party as they talked. The expense was covered by Global Tel-Link, and prisoners could make weekly calls at no charge.

Michigan is not the only state to pull profits from inmate phone calls. According to a report from the nonprofit Prison Policy Initiative, more than 20 other states have similar deals with companies.

Charging excessive rates in prisons is a bipartisan issue, according to the American Action Forum, a center-right nonprofit. It says, “The high cost of phone calls from jail or prison can be prohibitive for many incarcerated individuals and their families, leading to minimal communication, strained relationships, greater likelihood of recidivism, poor mental health, and behavioral problems among children of the incarcerated.”

The Michigan Legislature tried to close the Programs and Special Equipment Fund in 2011. Gov. Rick Snyder, however, suggested that the department could ignore the attempt because it was unenforceable, according to Prisons and Corrections Forum.

Pontiac’s public school system was one of 17 districts in the state that was in deficit in 2019-20, meaning it spent more than it took in.

Like every public school system in Michigan, the Pontiac district has been hurt by having to contribute increasing amounts each year to the state-run school pension system.

The district went from having to contribute $3.96 million in 2010 to having to contribute $6.75 million in 2020.

That extra $2.79 million in 2020 was a 70% increase over 10 years. How much is that?

The school district has 255 full-time teaching positions. The $2.79 million extra it has to pay for pensions in 2020, compared to a decade ago, would allow for about an $11,000 bonus for every teacher.

School district budgets are suffering under this burden because, for years, the state has neglected to fully fund its pension obligations.

The Michigan Public Schools Employee Retirement System has, for most of the past 19 years, underfunded the amount its accountants calculate is needed.

That amount, called the required annual contribution, has grown from $669 million in 2002 to $2.8 billion in 2020.

But according to the MPSERS annual financial reports, the state has adequately funded the system in just four out of 19 years. Those surplus ranged from 1.1% to 113% in 2013, which are small amounts compared to the magnitude of the underfunding. And in 15 of those 19 years, annual contributions to the pension fund were below the required amount.

The state of Michigan states that the underfunding of MPSERS is “the result of a timing difference between when the actuarial valuation is completed and the contributions are made.”