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The Honolulu Advertiser
Posted on: Monday, October 3, 2005

Keep transferring or build here? Costs, economics not that simple

 •  Years of problems yield few answers

By Kevin Dayton
Advertiser Staff Writer

At first glance, the economics of sending Hawai'i inmates to Mainland prisons appears straightforward: It is cheaper to house the inmates in out-of-state prisons than in comparable Hawai'i facilities. Therefore, taxpayers save money each time an inmate is shipped out.

But 10 years into Hawai'i's "temporary" fix to prison overcrowding at home, state officials acknowledge it isn't nearly that simple.

Approximately 1,830 Hawai'i inmates are confined on the Mainland, and that number is expected to continue to increase. The state Department of Public Safety estimates that it costs $105 a day to house a prisoner in Hawai'i, compared with $58 per day on the Mainland.

State funding for out-of-state inmates is expected to climb to about $36 million this fiscal year, money that leaves the Islands to provide employment and other spending in Oklahoma, Arizona, Mississippi and Kentucky.

The exact number of Mainland jobs created by the Hawai'i transfers is unknown because the private facilities also hold inmates from other states and the federal government. But to provide an idea of the number of jobs involved, there is a staff of 403 at the adjoining Halawa Correctional Facility and Halawa Special Needs Facility, which together hold about 1,150 inmates.

Inaction in building a prison in Hawai'i means the state has exported construction jobs as well. A new prison would surely cost more than $100 million, ranking among the largest public works projects in recent state history.

Instead, prisons to house Hawai'i inmates have been built in other states, with Hawai'i taxpayers helping to pay the out-of-state construction costs through Department of Public Safety contracts with private prison owners.

But a huge expenditure for a new prison in Hawai'i would leave less money for other public projects, such as schools.

State economist Pearl Imada Iboshi said policymakers and taxpayers need to weigh the "lost opportunities" against the economic benefits if a new prison were built to accommodate inmates now held on the Mainland and those yet to be transferred because of overcrowding.

The state spent $31 million to house Hawai'i inmates on the Mainland in the fiscal year that ended June 30 an estimated saving of $25 million over what it would have cost to house them back home, assuming there had been room for them.

So, if the inmates were returned to Hawai'i, an extra $31 million would ripple through the state economy. But it also means Hawai'i would have to spend an extra $25 million to house the prisoners.

That additional $25 million cost is a "lost opportunity" because the money could be spent on something else, Iboshi said.

Construction costs can undergo a similar analysis. If the state spends more than $100 million to build a new prison, the extra in-state spending would help the economy, but it also would represent a lost opportunity to spend those same construction dollars on new schools or other public facilities.

Peter Wagner, assistant director of the Prison Policy Initiative, a Massachusetts-based research organization, said taxpayers should consider whether they are getting a long-term gain out of the money now being spent on the Mainland.

"There is a reason why people buy houses as opposed to renting," he said.

Wagner believes that Hawai'i and other states lock up more people than necessary, and "after Hawai'i has wasted all this money, they don't even have a prison to show for it, so it is particularly shortsighted."

A number of states have taken steps in recent months to bring back inmates held in out-of-state facilities, often citing the economic benefits.

Wisconsin, which had 2,400 prisoners in out-of-state facilities in 2002, opened two new prisons to make room for them. Alabama doubled the number of prisoners on parole so it could make space for inmates it held last year in a private prison in Mississippi.

Wyoming plans to build a prison to house 550 now held out of state. Alaska lawmakers last year authorized planning for a new prison.

Alaska spends $14 million annually to house 760 inmates in out-of-state prisons, less than it would cost to accommodate them at home, said Portia Parker, deputy commissioner for Alaska's Department of Corrections.

Still, she said, bringing the prisoners back offers a prospective "economic impact that's quite substantial" in terms of jobs and spending, Parker said.

Labor costs play a major role in the economics of running a prison in Hawai'i versus the Mainland, and not only in wages, where the difference is about $8.40 per hour at the Tallahatchie County Correctional Facility in Mississippi compared with $13.20 in starting pay for a Hawai'i prison guard.

The primary cost in operating a prison is labor, and Hawai'i facilities have some of the highest staffing levels in the nation because state prisons and jails are old and outdated. A prison built with a modern design would require fewer guards to supervise more inmates, narrowing the gap between Mainland and Hawai'i costs.

Some say privatization would cut expenses even further.

Before he resigned last year, Public Safety Director John Peyton was considering plans for private companies to build and operate correctional facilities in Hawai'i, but public worker unions have long objected to privatization proposals that would pay employees less than what union members are making for doing the same work.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.