ENGLAND -- At a joint meeting of the state House and Senate State Agencies and Governmental Affairs committees Wednesday, legislative staff members said they've found a way to cover the cost of a new $100 million prison by increasing Arkansas license plate fees by $2.
The Bureau of Legislative Research had told the committees in August that a $2 fee added to the current $2.50 fee charged for license plates, would not be enough to build the lockup, which has been proposed to help alleviate prison crowding. Richard Wilson, the bureau's assistant director of research, told legislators then that they would need a $2.50 to $3 increase to cover bond financing for the prison.
But Wilson said Wednesday that if the bond terms were revamped to extend the life of the bond to 30 years and some of the benefit from a current bond issue -- called a "wrap around" bond issue -- was included, the $2 fee might be enough. The 30-year plan would cost the state almost $90 million in interest fees, compared with $22.55 million for a 15-year issue and $34.4 million for a 20-year issue.
The 30-year plan would also yield less in principal cash to build the prison as compared with the other two plans -- $96.75 million compared with $100 million on either of the other plans.
But some legislators said they weren't convinced that the variable interest rate, 30-year debt or the proposed 1,000-bed prison was the right course to alleviate the state's prison overcrowding. Committee Chairman Sen. Eddie Joe Williams, R-Cabot, and Sen. Jimmy Hickey, R-Texarkana, said Wednesday that they had visited a privately run prison in Louisiana earlier this week that they would like legislators to explore as an option.
"The president of the company told me yesterday, 'I'll take a thousand prisoners tomorrow,'" Williams said. "He said, 'I'll run two buses to Arkansas a week, and I'll bring them home as they're released. ... I'll supply them with medical care in this facility.'"
Prison officials have said they plan to ask the Legislature during the coming 2015 session to approve funding for the new prison because of crowding in the state's existing lockups. A new building has been estimated to cost between $75 million and $100 million to construct and another $19 million a year to operate.
The Arkansas Board of Correction voted in July to ask for funding for the new prison using additional fees on decals.
Wilson explained at past committee meetings that based on previous years, about 2.67 million license plate decals are sold by the state each year. With a $2 fee increase, that would generate $5.34 million.
To make payments on the 15-year plan, the state would need $8.17 million in annual proceeds. The 20-year plan would require $6.72 million, Wilson said.
Hickey said Wednesday that the new financial breakdown didn't make a lot of sense, particularly adding a previous bond debt to increase the ability to pay off the bond.
Wilson said the math was done for the Department of Corrections by Stephens Inc. Public Finance. He said the proposal was labeled "Option 3," but he had not seen any of the other options, if they existed.
The meeting Wednesday was held at the Willis H. Sargent Training Academy in England, where the Correction Department trains its officers. Until April, the facility had been a vacant school building in the England School District.
Williams said he wanted to let legislators know that opportunities exist to repurpose vacant school buildings all over the state. He asked Education Commissioner Tony Wood to compile a list of school districts with vacant properties and some details about those properties.
"What I want to do is explore all options before committing to building a new prison, and we have not done that," Williams said. "I want us to consider re-entry centers and work release centers ... a number of alternative facilities that would help us work on recidivism and help us get the prison population under control. And these types of buildings are ... a great opportunity and an example of successful partnerships."
Williams also asked the committees whether anyone would object to exploring contracts to send prisoners to privately operated prisons in nearby states, specifically 20 miles across the border in Homer, La.
Williams and Hickey drove Monday to two prisons operated by the private company LaSalle Southwest Corrections -- the Claiborne Parish prison in Homer and the Jackson Parish prison in Jonesboro.
Williams said company executives had estimated a per inmate cost of $28 per day, compared with the per inmate estimate of $58 per day at the new prison proposed by the Department of Corrections.
Benny Magness, chairman of the Arkansas Board of Correction, said the comparison wasn't entirely applicable. He said privately run prisons often won't accept prisoners from maximum-security lockups because there's a higher cost to housing those inmates compared with minimum- to medium-security prisoners.
Several other board members wondered whether the $28 figure included outside medical care, rehabilitation or substance-abuse programs that the state has to pay for and wants to provide to prisoners.
Williams said the figure would not include outside medical care, but Hickey said the state might be willing to pay on-site doctors if necessary and if that still resulted in a cost savings. Williams said there also might be a way to ship medication to the lockup from Arkansas pharmacies in the state's southwest border cities.
Magness said Correction Department attorneys disagree on whether shipping prisoners to a private lockup outside of Arkansas would affect the state's sovereign immunity if something were to happen and an inmate decided to sue the company and the state of Arkansas.
Williams said those questions would be answered, but he would still like legislators to consider the private company option.
"The economic impact is much greater than the debt burden to this state not to sign a contract for a year or 18 months or 24 months for a facility 20 miles over the state line," he said. "State law was written to allow us to do this."
The committees plan to met monthly through January to discuss options for dealing with prison overcrowding.
Metro on 09/25/2014