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Prison Spending in Colorado: Anatomy of a Fiscal Train-Wreck

Opinion Editorial
January 11, 2007

By Mike Krause

After decades of an ambitious incarceration campaign, Colorado’s booming prison population requires thousands of new prison beds.

In other words, Colorado faces a prison spending meltdown that will likely require Governor Ritter and the Democrat Legislature to put aside any grand new spending plans in order to pay for a hugely expensive long-term prison expansion project.

Colorado’s prison population is over 22,000 inmates and all available prison capacity is full. In fact, Colorado began shipping inmates off to Oklahoma in late 2006, with more on the way.

Prison population projections by the Colorado Division of Criminal Justice estimate more than 28,000 inmates by 2012. For that same period, the Legislative Council Staff projects over 30,000 inmates.

Split the difference and Colorado needs to build, lease, or otherwise find and pay for more than 1,000 new prison beds every year for the next five years, and it will need to start this massive expansion… about five years ago.

No, seriously. It takes anywhere from three to five years to get a new prison up and running and the only state facility currently under construction—the debt-financed, maximum security Colorado State Penitentiary II—will be filled immediately upon completion sometime in 2009 and there will still be a high-security bed shortage.
But even if the state started building today, by 2012 Colorado would be in the same position as now—prisons full and more needed— because expansion plans are only pacing, and not exceeding, prison population growth. In other words, if the legislature does nothing but appropriate more money, the 1,000-bed-per-year scenario simply continues as far as the eye can see.

It costs more than $100,000 (due in part to a world-wide steel inflation rate of around 1 percent per month) to build one new prison bed and another $28,000 in annual operations money. So Colorado is looking at a roughly $130 million per year (plus inflation) new spending commitment for prisons.

And that’s a conservative estimate. The Colorado Department of Corrections says it needs more than $800 million just in capital construction money both to complete already approved prison expansion projects and to start meeting capacity requirements driven by the five-year population projections.

Some 20 years ago, prison spending was less than 3 percent of the state budget. This year, corrections are 8.6 percent of General Fund spending in a budget that is allegedly still in crisis.

Given that fiscal discipline was one of the assurances to taxpayers in return for approval of Referendum C, it is a bit of a mystery where this money will come from.

Besides which, Referendum C never made any mention of corrections spending in the first place.

In 1991, the legislature passed the Bird-Arveschoug General Fund appropriations limit, which holds state budget growth to an annual 6 percent.

“During the fourteen years since the 6.0 percent limit on General Fund appropriations was established, General Fund appropriations to the department of corrections have grown at a compound rate of 9.8%,” says this year’s Joint Budget Committee staff briefing report on corrections.

If corrections spending had been held to the 6 percent growth limit, then last year’s General Fund appropriation for corrections would have been less than $400 million. Instead, it was more than $580 million.

Prison spending is only going to continue to bust the 6 percent limit, at the expense of other spending items. Ex-Governor Owens’ FY 2007-08 budget request includes an 8.7 percent General Fund appropriation increase for corrections—from over $580 million to just under $640 million. Yet even this increase doesn’t begin to address the state’s capacity needs.

The prison population drives prison spending. And if the prison population simply keeps on getting bigger, and lawmakers simply keep on playing prison spending catch-up, there may come a day in Colorado when every available General Fund dollar not constitutionally protected, or federally mandated, is swallowed up by corrections.

And Colorado taxpayers may have to then decide how much their taxes will go up, or what state functions they are willing to give up, to keep it that way.