For-Profit Lock-Up Leaves Littlefield Taxpayers With Texas-sized Headache

[sonias]

Burnt Orange Report 2/8/12
For-Profit Lock-Up Leaves Littlefield Taxpayers With Texas-sized Headache

For the past three years, the small West Texas town of Littlefield has had to come up with $65,000 a month to service a loan on an empty prison it never needed. To avoid defaulting on its prison loan, Littlefield has laid off workers, cut every department's budget, raised property taxes, increased fees, raided its municipal sewer and water fund, and even delayed its purchase of a new police car.

With just 6,507 residents during the 2000 census, Littlefield did not need a new prison. The city's elected officials decided to build one anyways. Littlefield issued $10 million in revenue bonds for construction of a 310-bed for-profit detention center as part of the city's economic development strategy in 1999. Revenue bonds are a special type of municipal bond that do not require voter approval, because they are backed by the expected revenue a project will generate. Littlefield's politicians built the prison believing it would pay for itself, pump money into the local economy, and expand job opportunity.

(snip)

As a result of this experience, Littlefield's bond rating was downgraded to junk status, and Littlefield taxpayers were saddled with millions in debt after discovery of mismanagement by for-profit prison operator Geo Group led the Idaho Department of Corrections (IDOC) to terminate its contract and remove its prisoners in 2009. When IDOC cancelled its contract, Geo Group bailed on Littlefield by terminating its contract and laying off 74 workers.

Excellent reporting by Nick Hudson blogging for Cuentame. Very nice video at the link above too. The video is in Spanish but has English sub-titles.

[1ProudAtheist]

1. A Prime Example

Of why some things should just NOT be about profit.

[TexasTowelie]

2. My experience with privatization

at the Department of Insurance was that we spent more time on internal administration, bidding, monitoring contract guidelines and communicating with our contractors than if we had done the job in-house. Based upon my personal experience and the stories I've also been told, the tale that private business can accomplish the task more efficiently than government is a myth.

Does anyone remember the $800+ million fiasco with Accenture and HHS?

[sonias]

7. I remember the Accenture privatization fiasco

Huge horrible mess. Still not sure if the state ever got out of trouble with the Feds over late processing of food stamps.

Privatization is just another word for crony capitalism at it's worst. repukes just move public programs over to their buddies who make huge amounts of monies on the backs of states and poor people. It's a real ponzi scheme at a government level. A lot like Mitt Romney's Bain did. They come in clean out the assets and then essentially ruin the company/program. And the thieves who get brought in make off like bandits.

[jody]

3. IMO the problem is very simple and ubiquitous, charlatans propose public programs with expectations

based on predictions consisting of unrealistic high benefits and unachievable low costs.

After several decades of watching one failed public project after another from the smallest incorporated hamlet to federal government and personally having submitted a few cost-benefit analysis for federal programs and protesting when my conclusions were changed, I can only echo that esteemed philosopher of the Okefenokee Swamp

[CreekDog]

5. you managed to turn this into a right wing talking point

turning the story of a botched private prison project into an indictment of every government project that has ever been attempted.

i don't understand why you have for years posted anti government posts, week after week, when here, we don't hate government and we advocate for the many good things it does.

when you don't think that at all.

i could have read what you just wrote and what you've written many times on a conservative site. the really ironic thing is that while i can easily find the kind of argument you just made here on a conservative site, i'm hard pressed to find it here (well, but for your post).

the things and the reasons for the things we post are always a fascination to me.

[ProgressiveProfessor]

8. What DoD major programs, major mass transit projects, or sin taxes based programs have ever come in

- On time
- On cost
- On functionality
- Lived to projected revenue expectations/savings

The fact is that we are not that good at managing very large and complex tasks to meet original forecasts that are often tweaked to make the project more saleable. IME this is true for both in house as well as contracted efforts.

The current CA budget is based on BS. The pols knew it when they passed it. Its not living up to projections, so the mid year cuts have to be even harsher...

[CreekDog]

9. really? now you're chiming in to finish/defend his point?

quelle surprise!

[ProgressiveProfessor]

10. Not to acknowledge that large scale program management is damn difficult is to be idiot

Last edited Fri Feb 10, 2012, 01:12 AM - Edit history (1)

In and out of government. The real issue is that within the government that new programs are often low balled at the start and come with rose colored glasses. There are also no real disincentives for not making goals. The team that sells it often has no execution responsibilities or role and people change postions so often that accountability is immpossible.

The answer is more transparency and accountability at a personal level. If the government team screws up, maybe they should be fired, demoted, or otherwise be held accountable. Name one pol who was turned out of office over a public works overrun?

The answer is NOT to kill government programs, but to force more realistic analysis up front with some serious penalties for those who sugar coat things while selling them. The DoD occasionally tries to do the former, with very mixed success. State and local governments without those tools or the GAO do much worse.

Honesty and transparency in government is a progressive thing, but perhaps you don't think so

[TBF]

11. Charlatans? Welcome to capitalism -

you can try to point out "bad actors" but it's the system that stinks. Every company bids as low as they can to get the project, and they add on their profit through change orders. Beltway bandits ... it's the way the system works.

You wanna change the behavior - you change the economic system.

[ellenfl]

4. i think geo is the company that florida is trying to contract. eom

[MiniMe]

6. This sounds a lot like the Iraq War will pay for itself

Not so much