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Lock up quotas
Executive summary
Private-prison “lockup quotas” — contractual minimum‑occupancy or payment guarantees — appear in a large share of examined contracts: In the In the Public Interest (ITPI) analysis of 62 contracts, 65% included occupancy guarantees typically between 80% and 100%, with 90% the most common level and several contracts at 95–100% [1][2]. Critics say these clauses can turn falling crime rates into a fiscal liability for taxpayers and create perverse incentives to keep beds filled; industry defenders argue guarantees are standard risk‑management for long‑term service contracts [1][3].
1. What “lockup quotas” are, in plain language
Lockup quotas (also called bed guarantees or occupancy guarantees) obligate a government to pay a private prison operator for a specified share of beds whether those beds are used or not, or require the government to keep a facility at a set occupancy level (examples cited include clauses requiring 80–100% occupancy and some contracts demanding 90% or higher) [1][2]. ITPI’s detailed report frames these as a “low‑crime tax” because jurisdictions must pay for empty beds when incarceration declines [1].
2. How widespread and how severe the guarantees are
ITPI’s review of 62 contracts found occupancy guarantees in roughly 65% of agreements analyzed; the guarantees ranged from about 80% up to 100%, with 90% most frequent and several jurisdictions (Arizona, Louisiana, Oklahoma, Virginia) holding quotas in the high 90s or at 100% in specific facilities [1][2][4]. Multiple secondary outlets and policy groups have repeated those figures and highlighted examples where states paid millions to satisfy such clauses [5][4].
3. Concrete fiscal and operational consequences documented
Reporting and advocacy pieces cite concrete cases: Colorado reportedly paid roughly $2 million tied to occupancy requirements even as crime fell, and Arizona disputes included claims and payments when the state and an operator disagreed over honoring a 97% guarantee [5][4][3]. ITPI and allied organizations argue that these payouts lock jurisdictions into funding incarceration levels that may contradict public safety goals [1][2].
4. The argument from proponents of guarantees
Private operators and some procurement defenders say minimum occupancy or payment guarantees reduce the firm’s financial risk, allowing private providers to offer lower per‑diem prices or commit to long‑term infrastructure investments; in standard contracting logic, guarantees are a way to allocate demand risk [3]. Demos notes private companies have characterized such clauses as necessary for a viable business model [6].
5. The critics’ core policy concerns
Advocates (ITPI, EJI, Brennan Center and others) contend the clauses create perverse incentives: they can discourage incarceration‑reducing reforms, reduce operators’ incentive to invest in programs that lower recidivism, and financially penalize jurisdictions for successful crime‑reduction policies [1][7][4]. The reports link lockup quotas to examples of worsened conditions — e.g., overcrowding or cost shifts — in specific facilities under quota contracts [2][3].
6. Legal or political pushback and reform proposals
Coverage and policy analyses recommend banning or strictly curtailing lockup quotas in privatization agreements and increasing transparency in contracting; the Brennan Center and ITPI explicitly recommend prohibiting occupancy guarantees to align contracts with public safety objectives [7][1]. Some states and federal entities have moved away from or limited private prison use; however, available sources do not provide a comprehensive inventory of current bans or legislative outcomes nationwide (not found in current reporting).
7. Sources, limitations, and competing narratives
Most of the figures and case examples in circulation trace back to ITPI’s contract analysis and sympathetic advocacy organizations; mainstream pieces and law‑school commentary echo the findings [1][8][9]. Critics of the advocacy framing — for example, private‑industry statements that these are routine commercial protections — are noted in reporting but less documented in the provided sources beyond brief industry defenses [6][3]. Available sources do not offer a systematic counterstudy showing that occupancy guarantees improve outcomes or save net costs across many jurisdictions (not found in current reporting).
8. What to watch next and questions for policymakers
Policymakers should demand transparent publication of contract terms, cost accounting that isolates payments tied to empty beds, and comparative analyses of total cost and outcomes with and without occupancy guarantees; ITPI’s data give a starting point but do not by themselves quantify long‑term net costs or savings for every state [1][4]. Given the documented cases where quotas produced multimillion‑dollar payments, states negotiating new contracts should weigh whether presumed short‑term savings justify long‑term fiscal and policy risks [5][4].
Sources: In the Public Interest, “Criminal: How Lockup Quotas and ‘Low‑Crime Taxes’…” (report and PDF) [1][2]; Prison Legal News [5]; Equal Justice Initiative [4]; PR Watch [3]; Brennan Center [7]; Demos and other coverage summarizing ITPI findings [6][9].