Financial Contingency Planning

Topics: Prison, Supreme Court of the United States, United States Pages: 8 (1732 words) Published: May 23, 2014

Financial Contingency Planning: Sources of Funding
May 12 2014
Adam Eaton

Financial Contingency Planning: Sources of Funding
California has the largest prison population in the United States and some countries around the world. For over 40 years, the incarceration levels have risen. The prison rates have risen 700 percent since 1970, today it is estimated that one in 100 adults are incarcerated. Who pays the bill for this large increase, tax payers have and will continue until the Department of Justice and government have a solid plan to reduce the overwhelming criminal justice deficient. The taxpayers are not only paying to house the prisoners but to feed them and all their medical needs. One plan that was pass by the Supreme Court was to reduce the prison population, they gave California two years to do this (Henrichson, 2012). Revenue is big for state prisons; most states rely on taxpayers to foot the bill. Around the mid 1980's is when prisons were financed by the pay as you go method and bonds there were $9.6 billion in construction costs. In the late 1990's the expenditures were up to $22 billion dollars, this was over half the debt it cost to finance prisons. The general obligation bond was another way to pay for prisons, but this was financed by tax revenues and back by government credit. Getting prisons built pressured the Governor at the time, Mario Cuomo, he tried to use the Urban Development Corporation (UDC), and this fund was for oversight for low-income housing. This was shot down at the state supreme court. The lease revenue bonds became a way to pay for prisons. An entity or agency was created to build the prisons, they this agency would lease it to the government. In turn the taxpayers would pay back the loan, it was done this way because it did not require the government to ask the voters ("Public Bonds", 2004). The Department of Justice (DOJ), just like most organizations has a contingency plan. The Antideficiency Act regulates what can and will not be paid for if the contingency plan is put into action. There are certain programs that will always keep going; they are Diversion Control, Health Care fraud and abuse control, debt collection, asset forfeiture fund, and federal prison industries. According to "United States Department Of Justice" (2013), "Also, the Bureau of Prisons' (BOP) Buildings and Facilities and Commissary accounts have multi-year authority and have adequate carryover funding to meet expenses during a lapse in appropriations". In the event, the California prison system would need to activate their contingency plan the Bureau of Prison Buildings and Facilities and the Prison Industries and Commissary funds would carry over to meet any expenses. The employees, including medical staff are except from any finical constraints. (U.S. Department of Justice Contingency Plan). Public prisons became a drain on the budget since the mid 1990's, and only getting worse. With the cost of living going up so does the cost of medical and psychiatric car. Also, another big stressor is the overcrowding in public prisons, with more inmates there is a need for more officers on duty, this results in more overtimes and hiring more officers. A way to lessen this burden is privatized prisons. There are several investors in the public stock market. Privatized prisons have investors that fund them. Miller  (2012), “Private prisons can be defined in one of the following manners: a transfer of public facilities to a private organization; a contract to design and operate new prisons; and a contract to provide other services to public prisons such as transportation, medical care, food, and maintenance “(The Drain of Public Prison Systems and the Role of Privatization: An Analysis of State Correctional Systems). Private prisons do not have ties to the government, they are funded privately, however, and they may enter into a contract with the government. These...

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