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Brown Seeks to Cut $4 Billion in Prison Construction

April 24 (Bloomberg) -- California, which once locked up more prison inmates than any other state, may slash $4.1 billion in construction plans, reclaim inmates housed in other states and close one of its costliest facilities.

That plan would reduce general-fund spending on prisons to 7.5 percent from 11 percent, under a blueprint unveiled yesterday by Governor Jerry Brown and the Corrections and Rehabilitation Department. The $4.1 billion is part of a $7.7 billion bond plan approved in 2007 to build more prison as a way to ease crowding.

California’s inmate count of about 161,000 last year was about 175 percent of capacity. The number has dropped to 138,000 after the U.S. Supreme Court upheld a lower court’s order to cut the population because of inadequate health care. Brown and lawmakers shifted felons convicted of nonviolent, low-level crimes to county jails or to alternatives such as monitoring by electronic bracelets.

“California is finally getting its prison costs under control and taking the necessary steps to meet federal-court mandates,” Brown said yesterday in a statement. “This plan cuts billions in future spending and meets the U.S. Supreme Court’s order.”

Highest in Nation

As recently as 2008, California’s inmate population was 173,670, the highest in the U.S., followed by Texas at 172,506, according to a 2010 report by the Pew Center on the States.

Even with the decline, California prison officials said they expect to fall short of the court-ordered goal of reducing inmate numbers to 137.5 percent of capacity in 2013. Corrections Secretary Matthew Cate told reporters yesterday the state will ask the court to increase the benchmark to 145 percent, a difference of 6,000 prisoners.

Eliminating $4.1 billion of the bonds authorized would reduce planned operating costs and debt service by $2.2 billion, according to the report.

The revised plan also seeks to pull back 10,000 inmates that were moved to other states to help ease overcrowding, and to close a prison near Riverside. Combined, those efforts would reduce the agency’s budget by $1.5 billion a year.

California usually offers lease-revenue bonds for prison construction, such as those sold March 22 to help build an inmate hospital near Stockton.

Shares of Nashville, Tennessee-based Corrections Corp. of America, which runs prisons for public agencies, fell 8.4 percent to $27.78 at 9:39 a.m. New York time. The stock dropped as much as 11 percent earlier, the most intraday since May 16.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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