2004 Cost Analysis of Housing State Inmates in County Jails and Regional Correctional Facilities
Executive Summary
Introduction
Senate Bill 3218, 2004 Regular Session, mandated the PEER Committee to conduct a cost analysis to determine the actual cost per day of housing state inmates in county jails. PEER also determined the actual cost per day of housing non-state inmates1 in these facilities, as well as the cost per day of housing inmates (both state and non-state) in the regional facilities. PEER reviewed the records of the county jails and regional facilities for the period October 1, 2003, through April 30, 2004.
Part One of the report presents PEER’s findings and the cost per day for housing state inmates and non-state inmates in county jails. Part Two of the report presents the regional facilities’ breakeven points and associated cost per inmate day for state inmates and non-state inmates in regional facilities.
Cost Per Day Analysis of Housing State Inmates in County Jails
County jails receive an economic benefit from housing state inmates that not only includes the monetary reimbursement received from the State of Mississippi, but also the value of the inmate labor received. As such, the current $20 per inmate per day in direct reimbursement, in light of the value of inmate labor that can easily exceed $20 per inmate per day as well, provides reasonable compensation to counties for housing state prisoners.
Of the fifty-two county jails housing state inmates, three have a cost per day under the current $20 per diem. (See Appendix A of the report, page 43, for the cost per day of housing inmates at each county facility.) In considering the reasonableness of the current per diem at each facility, all relevant factors must be considered. For example, state inmates housed in county jails perform a variety of tasks in the jail and, in some instances, in the surrounding communities. This is free labor and represents services the county would have to otherwise pay for or discontinue without the use of state inmates. Thus the value of inmate labor added to the $20 per diem establishes a true reimbursement rate that can exceed $40 per day.
PEER found that few distinguishable economies of scale were detectable when reviewing the cost per day information for county jails. Other factors that contributed to higher costs in county jails compared to regional correctional facilities were the county facilities’ high inmate-to-guard ratio and high food service costs. The factors causing a high cost per day for housing state inmates in county jails also lead to high costs for housing non-state inmates in county jails. The cost per day information for non-state inmates for each county jail is found in Appendix B of the report, page 46.
Analysis of Cost of Housing State Inmates in Regional Correctional Facilities
The average breakeven point for the eleven regional facilities is 207 state inmates. Under the current reimbursement structure, the state pays for the first 200 inmates at the individual regional facility’s per diem rate and pays for the remaining state inmates at $20 per day.
Exhibit 5 of the report, page 24, gives the breakeven points for housing state inmates at each of the regional facilities. The eleven regional facilities average 248 inmates per day, which is well above the average breakeven point of 207 state inmates.
For the ten regional facilities with actual cost per inmate day exceeding $20, the effect of the contract amendment (to pay $20 per day instead of each facility’s per diem for each state inmate beyond the 200 level) is to increase the breakeven point of each regional facility because the $20 does not cover the total cost of a state inmate day. However, taking additional inmates over the 200-inmate level at a daily rate of $20 is financially viable for the regional facilities. The only costs associated with those inmates over the 200 level are variable costs (food and clothing) and any additional correctional officers associated with guarding the additional inmates. As a result of the amendment to the original agreement, the 200 guaranteed inmates should no longer be used as a benchmark in determining the financial viability of regional facilities or as a measure of determining the state’s needed financial commitment to the regional facilities.
PEER identified $541,520 in costs that, if eliminated, would reduce the number of inmates required to break even at the eleven regional facilities included in this review. PEER determined that $245,940 in attorneys’ salaries and fees; $141,480 in program and accreditation fees; and $154,100 in payments to sheriffs were above the reasonable level. The inmate breakeven point, excluding costs above the amount PEER determined to be reasonable, averages 203.
Following PEER’s first breakeven analysis conducted in 2001, which reported each regional facility’s legal and ACA expenses, reductions in attorney and ACA service provider expenses have resulted in total cost avoidance of $570,406.
Regional Facility Costs for Housing State and Non-State Inmates in the Non-State Designated Area
Ten of the eleven regional facilities reviewed did not receive sufficient per diems from local government entities to reach the breakeven point for housing non-state inmates. These ten regional facilities use revenues generated from housing state inmates to defray the costs of housing non-state inmates.
In addition to medium-security state inmates, regional correctional facilities may also house state inmates that present a lower security risk (usually, those classified as minimum security) and non-state inmates from the counties, municipalities, and the federal government in areas separate from the medium-security state inmates.
During the process of determining costs associated with the housing of state inmates, PEER also determined the costs associated with the housing of non-state inmates. Exhibit 15 of the report, page 40, gives the cost of housing non-state inmates at each regional facility. PEER found that ten of the regional prisons did not have a sufficient number of non-state inmates to reach the breakeven point for non-state inmates given the current per diems received from local government entities and that the per diem rates received from most non-state entities are not sufficient to support the costs associated with housing non-state inmates.
PEER would note that regional facilities have the option of reviewing housing agreements with local entities and increasing per diems to ensure that all parties are paying a per diem rate sufficient to support the housing of local inmates, thus allowing the regional facility to reach the breakeven point for its local commitment.
Recommendations
Designation of Chief Corrections Officer
The Legislature should amend MISS. CODE ANN. Section 47-5-935 (1972) to allow counties to designate a regional facility’s warden as Chief Corrections Officer, without additional compensation for performing these duties. The Legislature should amend the section to delete the requirement that sheriffs receive $15,600 compensation for duties as Chief Corrections Officer.
If the warden is designated as Chief Corrections Officer, the Legislature should amend MISS. CODE ANN. §47-5-937 (1972) to allow the warden to hire legal counsel for the regional facility, with the legal counsel contract term not to exceed the term of the sitting board of supervisors.
Local Government Per Diem
Regional correctional facilities should increase per diems of local government entities at least to the level of the state’s first year per diem amount of $24.90 at the time contracts with local government entities are renewed or new agreements are reached with local government entities.
No Increase in Reimbursement Rate for County Jails
The current reimbursement rate of $20 per day per inmate, considering all relevant factors, is adequate for county jails. The Legislature should not increase the reimbursement for state inmates in county jails.
No Reimbursement Without Providing Information
The Legislature should include restrictive language in the FY 2006 MDOC appropriations bill to suspend reimbursement for housing state inmates to any county that failed to provide the information necessary to calculate the cost per inmate day as required under Senate Bill 3218, Regular Session 2004. MDOC should reimburse any such county for housing state inmates only after:
Furthermore, the county should not receive compensation retroactively for the period during which the calculations noted above are being processed and reported.
1 For the purposes of PEER’s report, when discussing regional facilities, the term “non-state inmates” refers to both state inmates that present a lower security risk and inmates from local government entities.