Bullock admin rejects private-prison contract offer; CoreCivic provides details

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."

State Rep. Rob Cook, R-Conrad, whose district includes Shelby, also told MTN News Thursday that the offer seems like a good one – and would clearly help offset budget cuts affecting rural state offices across the state.

“(The governor) has a valid and easy alternative (to budget cuts), and he refused to go there,” Cook said. “($21 million) would go a long ways toward keeping these mental health offices, these tax-assessment offices and all these other things that he’s shutting down all over rural Montana.”

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 $15 million to rebuild the state’s firefighting fund and at least $15 million to offset state budget cuts – money that would be released by CoreCivic, under a new contract.

That money has been paid by the state into a CoreCivic account that, under the current contract, can be used only to offset the cost of the state purchasing the prison next year.

CoreCivic this week apparently offered the money back to the state – the $35.7 million – as part of extending the contract.

Bullock, however, said Wednesday that the price asked by CoreCivic is too steep.

“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 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 the account the state could use to buy the prison.

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.

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.”

Cook, however, has said there’s no way that the Republican-controlled Legislature is going to approve the state purchasing the private prison – so the only way the state would get the money is if CoreCivic decides to refund it, under a new contract.

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.”

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.