For more than two years, an unusual coalition of business, local government, nonprofit and education groups have pressured state leaders to reduce the overall proportion of the state general fund going to prisons.
The coalition gained perhaps one of its largest victories yet this fall when Gov.-elect Rick Snyder’s transition team requested the coalition’s in-depth ideas and rationale for additional prison reforms.
Here’s what the coalition prepared for the new governor…
DATE: November 29, 2010
TO: Bill Martin, transition liaison for prison policy for Gov.-elect Rick Snyder
FROM: Members of the Corrections Reform Coalition
RE: Prison System Reform and Cost Savings Opportunities
A diverse group of organizations including representatives of the businesses, nonprofit, education, and local government sectors formed the Corrections Reform Coalition in late 2008. The organizations in this informal coalition share deep concern over the size and growth of the budget for the Michigan Department of Corrections – a budget that grew from 2 percent of state general fund expenditures in 1971 to 23 percent today.1 The MDOC budget has continued to grow (both in total amount and in its ratio of the general fund) despite cuts to the prison population and workforce:
The Corrections Reform Coalition has issued a series of letters to state policymakers over the past two years. Those signed letters are attached along with contact information for all who have participated.
The coalition believes a two-pronged approach to further prison reform is possible without compromising public safety. In essence, the coalition has called for the state to reduce corrections spending by hundreds of millions of dollars by reforming: 1) prison operations; and, 2) sentencing/incarceration policies.
The coalition met most recently in mid-November and identified three themes of concern and opportunity for the incoming Snyder Administration:
- The prison population.
- Staff and labor issues.
- Other prison operations.
Those three themes are discussed in detail below.
We are grateful for this opportunity to provide ideas and insights on the prison system as the Snyder Administration begins to grapple with the considerable policy and budget challenges coming in 2011 and beyond.
We stand ready to support reform efforts.
Thank you for your consideration.
Please note… Additional organizations and individuals also have participated in the Corrections Reform Coalition in the past two years but were unavailable to sign for the following reasons…
- Doug Rothwell, CEO, Business Leaders for Michigan – declined to sign due to his role on the Snyder Transition Team.
- Bill Martin, CEO, Michigan Association of Realtors – declined to sign due to his role on the Snyder Transition Team.
- S. Martin Taylor, private citizen and former Michigan state government department head, could not be reached due to the Thanksgiving holiday.
THEME 1: THE PRISON POPULATION
With annual costs of more than $30,000 per inmate, one key way to reduce Michigan Department of Corrections budget is to reduce the prison population so that additional prison facilities could be closed or consolidated. The coalition has commended the department, Gov. Jennifer Granholm, and the Michigan Legislature for doing so. As of Friday, November 19, the prison population stood at 44,076 inmates – down 14 percent from the all-time high of 51,554 in May 2007.2
Still, additional steps can be taken, including:
1) Minimizing the number of prisoners serving past their earliest release dates. Approximately 8,0003 (18 percent) of MDOC inmates are past the earliest release dates as prescribed by their sentences. Many such prisoners may be able to be released without threatening public safety. At $30,000 per inmate, reducing by half the number of prisoners past their earliest release dates could conceivably save $120 million.
2) Implement CSG Reforms. The Council of State Governments, after several years studying Michigan’s prison system, recommended a series of reforms that resulted in Senate Bills 826 and 827. Among other things, these bills would require that inmates serve 100 percent of minimum sentence but no more than 120 percent of minimum sentence and would limit the amount of additional prison time received by technical parole violators. The Pew Center/Council of State Governments estimated these reforms would result in a 1,800 prisoner reduction and $35 million in total savings over the next four years. Numerous members of the Corrections Reform Coalition testified in favor of these bills in early 2010. Yet the bills have remained stalled in the Senate Judiciary Committee since September 20094.
3) Expediting parole for medically fragile prisoners. MDOC currently cares for 300-400 such infirm prisoners. Moving such prisoners to facilities and service providers beyond prison walls could shift many of their medical costs to the federal Medicaid system.5
4) Assuring the parole board expedites all hearings and paroles to the extent possible without compromising public safety. Parole policy can better reflect the priority of moving low-risk offenders back into the community. For example, many other states incentivize inmates by reducing sentences with good-behavior credits.6
5) Establishing a sentencing commission to thoroughly examine Michigan’s incarceration policies and recommend practical and safe reforms. Studies by the Citizens Research Council of Michigan and the Justice Center of the Council of State Governments have suggested that Michigan may imprison felons for longer periods of time than other states, thereby inflating prison system costs without necessarily deterring crime or increasing public safety. In 2008, the Citizens Research Council concluded Michigan’s incarceration rate as 44 percent higher than the average of all Great Lakes states (489 prisoners per 100,000 residents in Michigan; average of 338 prisoners per 100,000 residents in all Great Lakes states)7. A 2009 report by the Justice Center found that “people sentenced to prison in Michigan for various violent crimes stay in prison considerably longer than is the case nationally.”8 A commission could benchmark Michigan’s sentencing and parole procedures and incarceration outcomes against those in other states and identify best practices elsewhere to manage the careful balance between the need for incarceration as a deterrent against crime and the need to minimize public investment in prisons.
THEME 2: STAFF & LABOR ISSUES
As outlined above, Michigan prison costs have continued to rise despite the 14 percent drop in the number of prisoners in the past three and a half years. Payroll accounts for three-quarters of all MDOC expenses. In 2011, the Snyder Administration has the opportunity to negotiate new labor contracts with many state employees, including many in the Department of Corrections.
Obviously, the administration must balance economic concerns with MDOC employee morale and the constant need for MDOC employees to prevent prison unrest and protect the public.
Areas of concern and potential savings:
1) Overall staffing levels. MDOC arguably grew less efficient in terms of staffing in recent years. From 2006 thru 2009, the ratios of prisoners-to-guards and prisoners-to-total-MDOC-employees actually fell. Staffing and inmate numbers are not yet final for 2010, but estimates suggest MDOC has not cut staffing levels as aggressively as it cut the prison population, at least thru 2009:
Additional opportunity may exist to benchmark MDOC overall staffing and guard-to-prisoner ratios to those of other states’ prison systems and adjust accordingly if warranted. Such ratios from other states were not immediately available from MDOC administration.
2) Employee Pay & Fringe Benefits. In contrast to Michigan’s overall economic meltdown and the loss of hundreds of thousands of jobs statewide in the past decade, the costs of MDOC employee pay and benefits have risen considerably. Overall MDOC “economics” increased 3.179 per year from 2003-2011, according to department testimony in the Senate in February 2010. In state government parlance, budget increases attributed to “economics” are dominated by personnel-related costs, including salary and wage increases, actuarial increases to insurance and retirement costs, and workers compensation costs.
Citizens Research Council reports and updated Census statistics suggest that Michigan Department of Corrections workers are compensated at considerably higher levels than their peers in other states. In 2008, the Citizens Research Council estimated that 2005 prison system pay in Michigan was 20 percent10 higher than the average in eight Great Lakes states. Earlier this year, The Center for Michigan used the same Census data as CRC to estimate that Michigan prison system pay in 2008 was 13 percent higher than the Great Lakes average:
Also, benchmarking by the National Conference of State Legislatures in 2009 concluded that health insurance for Michigan state employees cost 23 percent more than the national average11. Michigan taxpayers spent 34 percent more than the national average for that insurance while Michigan state employees contributed 32% less than the national average in premium cost sharing.
3) Work Rules. Labor contracts with corrections employees include numerous costly work rules that could be considered for elimination. Elimination of the following work rules could save $51 million per year, according to MDOC estimates12:
- Overtime/Sick Time. Employees currently receive 4 hours of sick time per pay period but are actually using, on average, slightly more than 4 hours of sick time per pay period. Under current rules, an employee can call in sick on a scheduled work day and then earn overtime later in the week for working on a previously unscheduled work day, even if total hours for the week have not exceeded 40. Requiring 40 hours worked before granting any overtime could save $29 million per year.
- Clothing/dry cleaning allowances for officer uniforms. Eliminating this benefit could save $5.4 million.
- Retention pay. Some corrections officers receive retention pay for working in higher-level prisons. Eliminating this benefit could save $5.5 million.
- Longevity pay. Discontinuing this benefit, which is in addition to scheduled pay increases and retirement benefits, could save $8.2 million.
- State paid holidays. Reducing the number of holidays by two could save $3 million in MDOC
THEME 3: OTHER PRISON OPERATIONS
The MDOC and its employees should be commended for enduring considerable change in recent years. MDOC estimates it has saved more than $600 million since 2003 through prison closures/consolidations/reorganizations, process efficiencies, and other reforms. State budget pressures necessitate ongoing scrutiny of all prison funding and processes.
Additional areas of concern and potential savings:
1) General Efficiency Thru General Budget Cuts. The budget passed by the Legislature in fall 2009 called for an $841 per prisoner cut in Department of Corrections spending to be achieved through general efficiencies. The governor vetoed this cut, which would have saved $38 million. After holding hearings across the state in 2006-07, a Senate subcommittee declared it was “convinced that the Michigan Department of Corrections should be able to reduce its per-prisoner cost by at least 20-30 percent.” The committee did not outline specific strategies to achieve those general operational savings, though the general desire for such savings certainly remains.
2) Process Engineering. MDOC estimates it will soon save $4 million annually through improved processes for food service supervision, accounting, and prisoner store operations. Process engineers who are members of the Detroit Regional Chamber of Commerce also have studied prison parole processes and the delivery of prisoner medications and estimates millions of dollars in additional potential savings.
Efficiency consultants should continue to be employed in search of additional savings through process re-engineering and removal of any unnecessary administrative rules or burdensome legislation affecting prison operations.
3) Deportable Prisoners. House Bill 4130 would transfer state prisoners to federal custody after those prisoners had served half of their minimums state sentences. The bill passed the House earlier this fall and awaits action in the Senate. House Fiscal Agency estimated that as of fall 2009, this reform would have removed 59 prisoners from the state system at an annual savings of $600,000. Additional savings are possible once more deportable prisoners serve half their minimum sentences. The bill has passed the House but has been stalled in the Senate Judiciary Committee since September 2009.13
4) Chelsea Boot Camp – Keep It Open. In recent years, some legislators have repeatedly threatened to close a prison alternative boot camp in Chelsea, despite data suggesting that the boot camp saves money and is at least as effective as prison when it comes to inmate recidivism. Putting first-time offenders in the boot camp rather than prison saves more than $30 million per year.14
5) Mentally Ill Prisoners. Experts estimate that many of Michigan’s prisoners suffer from severe mental illness. There is considerable need to identify best practices nationally in the treatment and housing of the mentally ill, including, prison diversion programs.
6) Continue to Tackle Recidivism Through Strong Re-Entry Programs & Additional Reforms. MDOC needs to continue to innovate and invest in strategic programs to reduce recidivism. MDOC estimates that the Michigan Prisoner Re-Entry Initiative (MPRI) is leading to lower prison populations and fewer returns to prison without an increase in crime. MDOC estimates net savings, after considerable reinvestment, of $172 million as a result of MPRI.