To hear the state’s prison officials tell it, Hawaii is saving millions of dollars by sending hundreds of its excess prisoners to the mainland.

At first glance, the numbers appear to bear out the claim: The state’s mainland contractor, Corrections Corporation of America, houses about 1,400 prisoners in Arizona for roughly half of what it would cost in Hawaii.

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Under the current contract, the state pays CCA a per-diem rate of $70.49 per prisoner — an arrangement that amounted to just under $31 million in fiscal year 2015.

By contrast, it costs an average of $137 a day to house a prisoner at the Halawa Correctional Facility, the state’s medium-security prison, which has a population comparable to that of CCA’s Saguaro Correctional Center in Eloy, Arizona.

But a closer inspection shows that the deal isn’t as much of a bargain as it appears.

That’s because, on top of the per-diem payments to CCA, the state has to spend millions more on an array of other expenses — including the costs of transporting the prisoners and conducting site inspections 3,000 miles away.

Halawa Prison from Red Hill.
It costs an average of $137 a day to house a prisoner at Halawa Correctional Facility, a medium-security prison on Oahu. By contrast, Corrections Corporation of America charges the state $70.49 a day for housing each of about 1,400 Hawaii prisoners at the Saguaro Correctional Center in Arizona. But those numbers don’t tell the whole story. Cory Lum/Civil Beat/2016

So, what’s the true cost of the state’s mainland prison operation?

The truth is, no one — including the Hawaii Department of Public Safety — even compiles a comprehensive list of all the extra expense items, let alone tallies how much they all cost.

The closest thing to a tally is in the state’s budget bill, which sets aside about $50 million for “non-state facilities” — a line item intended to cover, at a minimum, the $31 million payments to CCA. But the bill, which is awaiting the governor’s signature, doesn’t specify what other expenses should be covered by the fund.

Kat Brady, coordinator of the Community Alliance on Prisons, says the dearth of information should be troubling to lawmakers.

“What they need — and the public needs access to — is real numbers. It’s when you start really calculating all the costs that you see how entangled we have become in the corporate web,” Brady said. “Good public policy is based on sound data and research that is thoughtfully, openly and inclusively debated. It is time to rethink what we are doing.”

Wooden sign near the main street of Eloy, Arizona. 7 march 2016. photograph Cory Lum/Civil Beat
Hawaii prisoners are transported to the Saguaro Correctional Center in Eloy, Arizona, on chartered flights from Honolulu. The state pays for the cost of the flights. Cory Lum/Civil Beat

Obscuring The Financial Details

Until a few years ago, the Department of Public Safety provided the Legislature with a more detailed financial accounting of the state’s mainland prison operation — including a breakdown of some of the extra expenses — on an annual basis.

But the department hasn’t compiled the information since 2010, when the Legislature stopped adopting a resolution or inserting a budget provision requesting it.

Civil Beat filed a public records request last week for updated information, but the department hasn’t provided the records by Tuesday evening; under the state’s Uniform Information Practices Act, it has 10 business days to respond.

Still, the 2010 report to the Legislature is instructive; it teased out two primary sources of extra expenses:

Mainland Branch

One is the operating costs of the Mainland and Federal Detention Center Branch, which oversees the state’s contract with CCA.

According to the report, the mainland branch’s expenditures exceeded $660,000 in fiscal year 2010 — including an annual payroll of nearly $385,000.

Litigation costs “would have the biggest impact on per-capita costs for housing inmates in out-of-state facilities.” — Hawaii State Auditor Jan Yamane

The tally also included about $39,000 in expenses for conducting quarterly inspections at three CCA-run prisons across two states — Arizona and Kentucky — where about 1,950 Hawaii prisoners were housed at the time.

The remainder — about $178,000 — was used for administrative costs, such as bills for phones and office supplies, as well as “other” costs, including funeral expenses.

According to Toni Schwartz, public safety spokeswoman, the mainland branch’s payroll topped $400,000 for fiscal year 2015. The department paid an additional $66,267 to a contractor who serves as the state’s on-site monitor at Saguaro.

Civil Beat’s request for an up-to-date tally of other mainland branch expenses is pending.

Inmate Services

The 2010 report also broke down the costs of providing an array of services to the mainland prisoners that, under the terms of the contract with CCA, the state is responsible for covering.

For one thing, the state must pay for any medical services not considered “routine” — such as emergency care and hospitalizations.

For fiscal year 2010, such non-“routine” medical expenses for the 1,950 prisoners added up to more than $3 million.

According to Schwartz, the amount was much lower — about $1.36 million — for fiscal year 2015, but it has reached $2.2 million so far in fiscal year 2016, which ends June 30.

The CCA contract also specifies that the wages for the prisoners’ “workline” assignments — such as jobs in the commissary or laundry facilities — are to be paid for by the state.

Such wages amounted to more than $380,000 in fiscal year 2010.

According to a monthly report by Warden Joseph Taylor, more than 970 Hawaii prisoners held various “workline” assignments at Saguaro in January 2016 — but the report didn’t specify how much the prisoners were paid for their work.

Finally, the cost of transporting the prisoners to and from the mainland on chartered flights also goes on the state’s tab.

For fiscal year 2010, the cost amounted to more than $1.1 million.

Civil Beat’s request for an up-to-date tally for fiscal year 2015 is pending.

Saguaro Correctional Center CCA Hawaii Dept of Public Safety sign in parking lot.
Hawaii has about 1,400 prisoners housed at the Saguaro Correctional Center in Arizona. Under the definition of the U.S. Census Bureau, they are counted as Arizona residents. Cory Lum/Civil Beat

Hidden Expenses

The Department of Public Safety’s reports to the Legislature didn’t address other hidden expenses for the state:

Legal Expenses

In 2013, then-acting Hawaii State Auditor Jan Yamane identified one such expense in her report: the cost of litigation.

Yamane’s report, which was a follow-up to a scathing audit published three years earlier, didn’t tally the legal expenses incurred by the state or CCA, but she noted: “According to the department, these costs, if included, would have the biggest impact on per-capita costs for housing inmates in out-of-state facilities, since the biggest lawsuits involve these facilities.”

At Saguaro, three Hawaii prisoners have been murdered since the prison opened in 2007 — those killings have so far led to two wrongful-death lawsuits, against the state and CCA, seeking compensatory and punitive damages.

Both cases were eventually settled, but the terms of the settlements have not been disclosed.

Through a public records request, Civil Beat sought a copy of a compilation of CCA’s litigation history, which the company submitted in 2011 as part of its bid for the current contract with the state.

While it released the bid documents, the department redacted CCA’s litigation history entirely, saying its disclosure would constitute “the frustration of a legitimate government function.”

26 may 2015. photograph Cory Lum/Civil Beat
Because of outdated designs, more correctional officers are required to run Hawaii’s prisons than newer mainland prisons. The Halawa Correctional Facility is guarded by 410 correctional officers. By contract, 297 full-time employees work at the Saguaro Correctional Center in Arizona. Cory Lum/Civil Beat

Federal Funds

Hawaii is also losing out on a big chunk of federal funds by having prisoners housed on the mainland.

That’s because the U.S. Census Bureau determines people’s residence based on “where a person lives and sleeps most of the time” and counts prisoners in the state where they are incarcerated.

“The intent behind sending our inmates to the mainland was not to save money. If that were the simple reason, we close up Halawa and send everybody there.” — state Rep. Gregg Takayama

The bureau’s practice has a significant financial impact for states like Hawaii that send their prisoners out of state — since the decennial population counts help determine each state’s share of more than $400 billion in available annual federal funds, such as Medicaid and highway subsidies.

According to a study by the Brookings Institution, based on fiscal year 2008 figures, states lost an average of more than $1,450 a year for each person not counted — though the actual amounts varied widely by state.

Momi Fernandez, director of the Census Information Center/Data and Information at the Native Hawaiian advocacy group Papa Ola Lokahi, says an estimate for Hawaii’s per-capita loss in federal funds could be as high as $2,500 a year.

That means the amount of lost federal funds, based on Census 2010, could be nearly $5 million a year, given that about 1,950 prisoners were housed in mainland prisons that year.

“I think this shows that state officials really need to come up with solutions to the problem of (prison) overcrowding,” Fernandez said.

Handpicked Prisoners

Critics also point out that the debate over which prison type — private or public — is cheaper often gets skewed because the comparisons usually aren’t done on a level playing field — since for-profit prisons typically accept only low-risk, easier-to-handle prisoners.

According to Schwartz, Hawaii prisoners are sent to the mainland only after they’re screened to make sure that they are in “good health” and not prone to “management problems.”

“Private prisons cherry-pick. They take the cheapest people to house to begin with,” said Caroline Isaacs, program director of the American Friends Service Committee in Tucson, Arizona. “So you’re stuck with the sickest, most needy, most troubled people. All of those costs get pushed back on the state.”

In Arizona, a 2009 report found that, when controlled for the different variables, it was cheaper on average to house medium-custody inmates in state-operated facilities than in private ones — $48.13 vs. $55.89 per inmate.

“The privatized prisons that Arizona has contracts with — there’s no evidence of cost savings, and there’s no evidence that they’re doing as good or better a job than the state Department of Corrections,” Isaacs said.

Going Beyond The Cost

In the end, though, the per-capita cost of incarceration at Saguaro is still likely to come out less than what it would cost to house the prisoners in Hawaii — even if all the extra expenses were added up.

That’s largely because payroll and other operating costs are so high at the state’s four prisons. At Halawa, for instance, such costs amounted to $93 out of the $137 daily rate for housing each prisoner — a far cry from the per-diem rate of $70.49 that CCA charges.

The main reason is down to the prisons’ outdated design, which requires more correctional officers to manage them than at Saguaro.

Halawa, which holds about 1,100 prisoners, is managed by 410 correctional officers. By contrast, Saguaro only has 297 full-time employees.

Senator Will Espero during a Hawaii Medical Marijuana Dispensary Task Force meeting at the Hawaii State Capitol on September 9, 2014.
State Sen. Will Espero says the state should focus on bringing back the prisoners from Arizona — regardless of savings. PF Bentley/Civil Beat

But state Rep. Gregg Takayama, chair of the House Public Safety Committee, says that, when considering the state’s mainland prison operation, any discussion on the cost effectiveness of for-profit prisons misses the point.

“The intent behind sending our inmates to the mainland was not to save money. If that were the simple reason, we close up Halawa and send everybody there,” Takayama said. “The intent was to buy us the time to build a new prison here in Hawaii. But that fell by the wayside under Gov. Cayetano, Gov. Lingle, and subsequent administrations.”

For his part, state Sen. Will Espero, vice chair of the Senate Public Safety Committee, says the state should be focusing on finding ways to bring the prisoners back — regardless of how much savings could be made by keeping them on the mainland.

“The bottom line is, we’re still exporting $30 million to $40 million, which should be spent here in Hawaii. If we’re going to spend that much, I’d rather have that in our economy, circulating among our workers, versus theirs,” Espero said. “The only way we can do that is by being creative: Look at what’s going on across the country, then come up with some serious alternatives to incarceration.”

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