One of two main rotundas in the House of Correction. Each opening leads back to a cell block.

One of two main rotundas in the House of Correction. Each opening leads back to a cell block.

Bobby Chen (@rysChen)

As Philly’s inmate population plummets, why aren’t we saving any money?

The number of incarcerated persons drops 18 percent, but costs still rise.

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After years of cultivating a bloated jail population that led to overcrowded conditions and the “most incarcerated big city in America” title, Philadelphia is finally addressing its problem with a plan to slash the population of incarcerated persons by a third. The massive criminal justice reform undertaking means thousands of people who would have found themselves in a cell on State Road will now have a chance at an alternative.

As some city officials tout their successes so far — the average daily inmate population has dropped 18 percent in the last two years — others are wondering what the population reduction means for the bottom line of a department that spends well over a quarter billion dollars a year on taxpayers’ dime.

“Why isn’t our overhead going down if the prison population is reducing, especially if we have a goal of 34 percent over the next three years?” City Councilman Allan Domb, a first-term councilman who brought his business acumen to city government, asked during a budget hearing in April. “Should we see reductions in the food costs, reductions in the medical costs, reductions in the overhead?”

Here’s the short answer: The Department of Prisons doesn’t have an estimate of how much money it’ll save by serving 34 percent fewer inmates. They’re not considering closing any of the six facilities at the complex on State Road, and the number of correctional officers is remaining stagnant as the inmate population decreases. And when employee fringe benefits are included, the department this year actually requested more taxpayer dollars from the city than it did last year.

Officials working to reduce the inmate population say saving money is flat-out not a priority. Instead, they’re hoping to expand services to inmates.

“We’re going to try to make sure all the services and programs are accessible to as many inmates as possible,” department spokeswoman Shawn Hawes said, “so we can return them to the community in better shape than we received them.”

The funding puzzle

At first glance, it appears the city’s Department of Prisons requested $3.5 million less in Fiscal Year 2018 compared to the year prior. That doesn’t tell the full story, though.

The department this year requested about $259 million in funding, and the slight decrease compared to last year’s spending level was largely due to the elimination of one-time union bonuses and a reduction in certain inmate housing requirements.

Of that total department budget, about $147 million (or about 57 percent) will go toward employee compensation, representing a decrease of about a million dollars compared to last year. But that total doesn’t include fringe benefits, which falls under the Finance Department’s budget and is estimated to add about 40 percent to employee compensation costs. (Other costs outside of employee compensation and purchase of services remained largely flat.)

As Domb explained in April, the addition of fringe benefits brings the overall Department of Prisons budget to about $316 million a year, or about $50,000 per inmate.

Inside a jail cell at the dilapidated House of Corrections in Northeast Philly.

Inside a jail cell at the dilapidated House of Corrections in Northeast Philly.

Bobby Chen/Billy Penn

There are currently about 6,600 inmates throughout six facilities run by the city. That’s an 18 percent decrease since July 2015, and no accident. The city is working to get that population down to about 5,800, or a decrease of a third compared to its peak, when the system was housing 8,200 inmates. That figure includes men and women being housed in jails in facilities run by the city.

It’s part of a three-year effort that largely began in April 2016 when the national grant-making MacArthur Foundation announced it would award Philadelphia a $3.5 million grant and give the city an aggressive goal to decrease its inmate population by one third. The grant is in addition to $2.1 million from the city and another half million coming from private donations, bringing the project total to about $6 million over three years.

If the department is spending $50,000 per inmate and the number of inmates decreases from 8,200 to 5,800, Domb said during the hearing, that should theoretically translate to a savings of more than $100 million per year.

“I’m not saying that’s going to happen, because you can’t close all the holes,” he said. “But there should be savings of $30, $40 or $50 million.”

 

Beds and meds

During the Department of Prisons budget hearing in April, Domb asked Prisons Commissioner Blanche Carney specifically about costs associated with food and medical care for inmates, two of the Department’s biggest financial obligations. Carney couldn’t provide an estimate of savings related to a reduction in the inmate population, but she responded that “we should expect to see reduction in the food costs.”

For years, the city contracted with Aramark, the Philadelphia-based food services company, and the city’s budget indicates the Department budgeted spending $14 million on its food services contract in FY18.

This year, though Aramark once again bid on the contract, the city instead contracted with GD Correctional Services. That contract, the details of which haven’t yet been released, began July 1. The Department didn’t provide any estimates of how much money will be saved or lost as a result of switching food services providers.

Carney told Domb that there may not be savings associated with medical care for inmates because, “if we are having the appropriate population in custody longer, they have chronic care issues.” A look at the contracts associated with those costs shows why there won’t be a dollar-for-dollar savings when the inmate population is dramatically reduced.

In FY18, the Department budgeted $65.6 million to cover medical care. The majority of that is part of a deal with Corizon, an inmate medical services company. The city paid Corizon $46.3 million in FY16 when there were about 7,500 inmates, and it paid $48.6 million in FY18 when there were about 1,300 fewer inmates. The city also has an approximately $10 million contract with MHM, a psychiatric services provider, that’s remained consistent in cost over the last three years.

Those numbers aren’t budging any time soon. The city renewed the bulk contracts this year with both Corizon and MHM, and Hawes said the Department isn’t considering negotiating a per-inmate contract with the companies that provide medical care.

“Everyone’s diagnosed individually,” she said. “And we’re going to treat whatever is needed to be treated.”

Domb said he doesn’t buy the notion that there can’t be spending cuts associated with reducing the inmate population by 34 percent.

“Theres gotta be savings,” he said. “I don’t buy it that there’s not enough savings here, or we have bad contracts.”

How others saved money

Other jurisdictions that successfully reduced their inmate populations and managed to cut costs didn’t do so by dramatically trimming medical and food costs. They did so by cutting staff.

The Vera Institute of Justice, a research and policy nonprofit based in New York, earlier this year published a report on “The Price of Prisons,” which outlined trends in prison population and spending between 2010 and 2015. Vera aimed to test the theory that “a decline in prison population should necessarily register a decline in spending.”

Forty-five states responded to Vera’s survey, and researchers found that 20 of those states decreased their spending while 13 of those 20 reduced both their prison populations and their spending. However, of 45 responding states, 25 increased spending, and some did so despite reducing their prison populations “either because they did not take steps to downsize their workforce or the savings they attained through population reductions were washed out by other rising costs.”

Across Pennsylvania’s state prison system? The population decreased, but costs still rose. From Vera’s report:

In Pennsylvania, the prison workforce decreased by 8 percent between 2010 and 2015, while the prison population remained largely flat. Despite the decline in the number of employees, prison spending increased by 22 percent between 2010 and 2015. Expenditures on employee benefits, including health care for current and former employees, increased by 51 percent between 2010 and 2015, largely due to a dramatic increase in the amount that state employers were required to contribute to employee pensions. Additionally, salary expenditures increased by 8 percent due to negotiated salary increases, while spending on overtime doubled, partially as a result of hiring freezes in the 2012-2013 and 2014-2015 budget years that left many positions vacant.

Plenty of jurisdictions that reduced inmate populations have avoided reducing their staffing. In New York City, the inmate population has declined 54 percent since 1992, but the correctional staff has decreased by only 17 percent in the same time frame, according to Vera. High rates of violence and old infrastructure at Rikers Island are the main reason for this discrepancy, Vera reported, but that could soon change: The city has an ambitious plan to close the notorious complex.

Chris Mai, a research associate at Vera, said the survey found that about two thirds of what states spent on prisons went to staffing, “so states able to reduce staffing costs and their population were in the sweet spot of seeing declines in spending.”

“For states with a shrinking population that for whatever reason did not reduce the number of staff working in the prison saw more modest savings,” Mai said. “That was the main factor they had in common: They were willing to reduce the size of their staff and employment.”

And Philadelphia isn’t planning on reducing its Department of Prisons staffing. Quite the contrary.

‘We’re hiring more’

In the time the inmate population has decreased by 18 percent compared since July 2015, the number of correctional officers the city is paying has slightly increased.

According to budget documents submitted by the department, in Fiscal Year 2016, the city budgeted for 1,983 correctional officers, which includes supervisory staff like captains, lieutenants and sergeants, across the prison system. That represented about 85 percent of the overall Department of Prisons staff.

In FY2018, the city budgeted for 2,030 correctional staff members, or about 87 percent of the Department employees. That’s a 2.3 percent increase in the number of correctional staff members even as the inmate population plummeted.

Hawes said though that just because there’s a budget for that level of staffing doesn’t mean there are that number of officers at any given time. She said the department frequently loses staff through attrition, and the current correctional staff is about 1,900, or more than 100 officers below the desired complement.

In New Jersey, annual prison spending decreased by about 11 percent between 2010 and 2015, according to Vera, largely because the state decreased its prison population through diversionary programs and then declined to fill some vacancies when prison employees were lost through attrition.

The Philadelphia Department of Prisons isn’t considering cutting that staff any time soon.

“If anything,” Hawes said, “we’re hiring more because of the attrition.”

After the initial publishing of this story, a city spokeswoman provided a statement from Julie Wertheimer, the city’s Chief of Staff, Criminal Justice:

“We didn’t reduce our staff budget because the reductions have not allowed us to close any of the six Prison facilities, so corrections officers still have the same physical footprint to cover, and, thus we still need the same amount of staff,” Wertheimer said. “We’re only one year into a three year initiative, so there are still several strategies that have yet to be implemented. We’re hopeful that, as they are, we will be able to reduce our costs in the long term.”