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Bullock admin rejects private-prison contract offer; says too high

Posted at 6:40 PM, Apr 04, 2018
and last updated 2018-04-04 20:40:03-04

HELENA – Gov. Steve Bullock said Wednesday his administration rejected an offer this week from CoreCivic to extend its contract to manage Montana’s only private prison, because the company asked for what he considers a 15 percent increase in payments.

“The idea that we’re cutting rates for human services (across the state), and then to end up increasing by about 15 percent the rate that this private prison makes?” he told MTN News in an interview. “It doesn’t make sense for Montanans.”

Yet CoreCivic officials said late Wednesday that the net increase under the offer would be only about 4 percent — and that the company also had agreed to increase correctional officer wages by 11.5 percent, provide more treatment for inmates and give the state a one-time payment of $35.7 million.

"The Montana officials rejected CoreCivic’s offer and ended negotiations," said Steven Owen, managing director of communications for the company. "We at CoreCivic always believe there is a way to find common ground, and after negotiations ended, we expressed our continued commitment to work with Montana policymakers to find a path forward."

CoreCivic’s contract to manage the 700-bed Crossroads Correctional Center in Shelby expires next year.

Late last year, Republicans lawmakers who support the private prison attempted to force the Bullock administration to renegotiate the contract, by creating a budget incentive.

They passed a state law that says if the contract is extended, the Bullock administration could access to up to $30 million or more, to offset state budget cuts – the money CoreCivic apparently offered in the negotiations this week.

Bullock, however, said Wednesday that the price asked by CoreCivic is too steep, that, in reality, only $15 million of the money would help offset budget cuts elsewhere in human services, and that widespread budget cuts would occur this year anyways.

“Where it leaves us is, we sure as hell shouldn’t be entering into a contract that increases 15 percent for the private-prison providers at the same time that we’re cutting services all across the state,” he said.

While Bullock said CoreCivic asked for “essentially” a 15 percent increase, the amount over what it’s being paid now would appear to increase only about 4 percent next year.

The state currently pays CoreCivic about $72 per prisoner, per day, to run the prison. That includes a $9.14 per prisoner “use fee” that goes into an account that the state can use next year if it chooses to buy the prison from CoreCivic.

The account apparently has reached more nearly $36 million — the amount that CoreCivic says it would give to the state if the state agrees to the new contract.

CoreCivic’s offer, as described by Bullock, would increase the per-prisoner payment to $75.48 next year – but the amount no longer would include the use fee, which would be canceled.

Bullock said CoreCivic is asking to increase the daily prisoner fee from about $63 to the $75.48 amount next year – but, the state would no longer be paying the $9 use fee. Therefore, the net increase of state payments to CoreCivic would increase from about $72 per prisoner to $75.48, through 2021.

Bullock said he sees the deal as CoreCivic asking for a 15 percent increase to “free up the money that Montanans actually already own.”

Owen said the offer made this week by the company would increase officer wages at the prison, expand sex-offender and vocational-education programs for inmates, and make the one-time payment — if the state increased the current total payments by 4.2 percent.

Bullock said his budget director, Dan Villa, and state corrections director, Reg Michael, traveled to CoreCivic headquarters in Nashville, Tennessee, earlier this week and negotiated for two days before leaving without an agreement.

“We’ll have to see,” he said, when asked when talks might resume. “We worked hard and moved a lot, from our perspective.”