Cut prison spending, CFM tells Senate panel

My written testimony for a meeting today of the Senate Appropriations Subcommittee on Corrections:

"Good afternoon. Thank you Senator (John) Proos and fellow members of the committee for the opportunity to speak with you today.

In 2008, the Center for Michigan organized a diverse group of business, nonprofit and public sector organizations all concerned with the exploding costs of prisons in our state. We formed a Corrections Reform Coalition out of one urgent, shared concern -- the ever-growing costs of corrections inMichiganwere overshadowing many other strategic priorities for the state’s future at a time when state budget resources were increasingly scarce.

Over the past several years, the coalition has met many times with the executive branch, members of the House and Senate, the leadership of the Michigan Department of Corrections and numerous other law enforcement and social service groups to learn about state prison spending and seek ways to reduce it.

Today, I am happy to acknowledge that considerable money-saving progress has been made in recent years.

For starters, the state prison population has decreased by almost 17 percent since reaching an all-time high of 51,500 prisoners in 2007. That’s 8,600 fewer prisoners today. At a current cost of just under $33,000 per year per inmate, imagine the budget headaches your committee could have faced today. Had the state done nothing, and had the prison population remained at 2007 levels, this committee could be facing something in the neighborhood of $300 million in additional general fund revenues needed to run state prisons this year.

Michigan has achieved these money-saving reductions in the prison population without causing a chaotic public crime wave some would fear. In fact, violent crime is actually down acrossMichigan. In 2009, Michigan had 497 violent crimes per 100,000 state residents. In 2010, we had 490 violent crimes per 100,000 residents. And, again for the first half of 2011, violent crime was down in all major Michigan cities reported by the FBI – Detroit, Flint, Grand Rapids, Lansing and Warren

Secondly, the Department of Corrections has achieved significant operational savings in recent years. Senator Proos and fellow members of this committee, as well as Director Dan Heyns and his management team, should be applauded for doing so. Most recently, under Director Heyns, the department announced:

• The closure of Mound Prison in Detroit.
• Competitive bidding of prison health care and and mental health care
• Operational savings due to staff changes, prisoner clothing savings, technology savings and other cuts to red tape.

Collectively, these reforms could result in budget savings of $100 million per year.

All of that is good news for Michigan taxpayers as well as the many other important general fund budget priorities which suffer when prison spending expands.

But it would be premature for all of us today to stand up, cheer and declare prison spending reform in Michigan a “mission accomplished.”

The 2012-13 budget proposed by the governor last week once again expands corrections spending. This budget envisions spending just under $2 billion on the Michigan Department of Corrections in the next year. It’s a 1 percent increase over this year and an 11 percent increase over four years ago -- even as the prison population has continued to drop.

Worse yet, the administration envisions a nearly $50 million increase in prison spending in fiscal year 2014, which would push the corrections budget over the $2 billion mark.

I urge the committee to reject these prison budget expansions for four reasons:

First, the 2012-13 budget proposal accounts for 21.5 percent of the governor’s budget recommendation for 2012-13. Corrections was 17 percent of the general fund a decade ago and only two percent of the general fund a generation ago. In other words, prison spending continues to crowd out many other important budget priorities that are much more strategically aimed at increasing talent, quality of life, and overall prosperity in Michigan.

Business Leaders for Michigan is one of the partners in the Corrections Reform Coalition. BLM’s new Michigan Turnaround Plan points to prison costs as one of the key areas for ongoing reform in Michigan. Specifically, BLM calls for reducing Michigan’s total corrections costs to theGreat Lakes average. Here’s one measure of how far Michigan has to go to accomplish that goal:

In other words, reaching BLM’s goal could require significant additional prison spending cuts – as much as $500 million in additional annual savings.

Second, concerns remain about whether the department has done all it can do to provide efficient prison operations. This committee can and should continually challenge the department to:

• Use best practices in process engineering with its large inventories and delivery of basic human needs such as food, medical supplies, clothing and the like.
• Assure that all state prison inmates who are under federal deportation orders are moved to federal custody and off the state dime.
• Continue operations of efficient, money-saving alternatives such as the Chelsea Boot Camp, identify best and most cost-efficient practices for housing and treating the large number of mentally ill prisoners.
• Assure that Michigan Prison Industries meets its legislative mandate and is self-sufficient. As the Center forMichiganhas detailed in its publications, this has often not been the case in recent years. Taxpayers have underwritten MPI’s large staff and money-losing operations. .
• Continue to innovate in the fight against prisoner recidivism. Once prisoners are out of prison, let’s keep them out.

Third, the department, the executive branch and the Legislature have not adequately addressed high labor costs in the prison system – high costs which have been documented for years by nonpartisan groups such as the Citizens Research Council of Michigan, the Mackinac Center for Public Policy, the Center for Michigan and the Corrections Reform Coalition.

For example, the Corrections Reform Coalition provided to the governor’s incoming team in late 2010 a series of documented concerns about prison labor issues. Using the latest available data at that time, we pointed out that:

• Prison system pay in Michiganwas 13 percent higher than that in neighboring Great Lakes states.
• Taxpayer costs for health insurance for state employees was 34 percent more than the national average.

Despite those concerns, Michigan’s prison labor costs continue to rise. The budget proposal last week calls for $12.5 million in increased base wages and benefits for prison guards.

And fourth, there is still much Michigan may learn from other states’ recent innovative efforts to further control prison population -- and divert precious budget resources to other priorities. The Center forMichigan publishes Bridge Magazine twice a week. I encourage committee members to read today’s issue -- I’ve included copies with my testimony. Our report details how the national landscape is shifting from getting “Tough on Crime” to getting “Smart on Crime.” And in many places Republicans are leading the shift.  By our count, 26 states have recently passed prison reforms. Half of those states are led by Republicans.

In Ohio, Republican Governor John Kasich led reforms that shortened the sentences of some felons and helps reduce the prison population by diverting some convicts to programs beyond prison walls.

Alabama, with a Republican governor and legislature, put limits on incarceration for probation violations; Florida Republican Governor Rick Scott signed into law an expansion of drug courts that diverts some drug felons from prison. GOP governors and legislators approved sentencing modifications in North Dakota and early discharge from parole in South Dakota.

The goal in all of these places is not to throw open prison cells and turn dangerous convicts loose on a vulnerable public. In fact, a recent sentencing commission in South Carolina lengthened prison sentences for sex crimes while shortening sentences for nonviolent crimes. The goal is to reach the best balance between crime, punishment and the public’s bill for prisons. It’s a business-savvy approach – not unlike the constant process review and re-engineering private-sector businesses undertake to maximize profits and shareholder value.

Indeed, continued re-engineering of the prison system in Michigan is another chapter in the theme of Reinventing Michigan.