Rural Communities Look to Jails for Revenue

Some rural areas see jails as a potential revenue source.

Some rural areas see jails as a potential revenue source. Jeff Barnard/AP

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A new report found that rural areas are increasingly renting out jail beds to places with overcrowded facilities in an effort to bring in more revenue.

The jail population in the U.S. has been steadily falling over the past decade. Much of that decline has been driven by cities, like New Orleans, which shrunk the jail population to the lowest numbers since 1979, and New York, where the jail now holds almost 70% fewer people than it did in the 1990s. 

But jail capacity hasn’t seen the same shift. Instead, rural communities, as well as some suburban localities and mid-sized cities, are often choosing to build new jails or additions. Overall jail capacity grew by over 11% between 2005 and 2013, according to a new report from the Vera Institute of Justice, a nonprofit that advocates for changes to the criminal justice system. 

“Across the country, you see a really interesting trend,” said Chris Mai, one of the report’s authors. “While the number of people in jail is going down, capacity is going up. Small towns and rural America just keep adding more jail beds.”

There are several reasons why rural counties have steadily built out their jails over the past decade, but one of the biggest ones is the potential to turn the facility into a money generator. By building a new jail, or adding an expansion on to an existing one, counties are able to rent the extra space out to other counties, or to the state and federal government, when their facilities experience overcrowding. In recent years, ICE in particular has become a big player in the local jail rental scene. “Usually a county could get paid $50 to $100 per day for housing people from outside their jurisdiction,” Mai explained. “It makes people think a larger jail is a sound financial decision.”

But is it? The researchers underscore that local jurisdictions pursuing jail expansion base their decisions on a shaky assumption: “That jail populations, although they fluctuate from day to day, always trend upwards in the long term.”  However, growing bipartisan support for policies like the elimination of cash bail, the decriminalization of marijuana, and diversion programs, coupled with falling crime rates, could change that calculus. Instead, new jails right now are being built for a shrinking market—and county taxpayers are on the hook for larger, more expensive facilities that may very well sit empty. 

Rural jails aren’t only popping up for financial reasons. Often, new jails, or new wings to old jails, are built to solve safety issues due to overcrowding. But Mai said building out a larger jail because the current one is too crowded can come with its own unexpected repercussions. “When jails become larger, they tend to fill up,” she said. “A new facility can easily become overcrowded in ten years. Judges, police, and policymakers will make different choices when they know there’s more space.”

The researchers saw that in counties with more limited jail space, police were more likely to write tickets or citations instead of making arrests, because they knew there wasn’t space to hold a new booking.

New jail construction was also often justified by a growing understanding that people in jail often have serious health needs, particularly untreated mental health problems. With a new wing, some counties argued, they could better provide mental health services and long-term care. Of the 4.9 million people jailed in the U.S. each year, 428,000 people are “frequent utilizers,” meaning they’re arrested three or more times per year. Twenty-five percent of that group has a serious mental illness, and over half have substance abuse problems.

Jails have become inadvertent healthcare providers for many who cycle through them, but Mai said that isn’t a reason to expand the facilities. “Many sheriffs agree that jail is not the appropriate place to provide mental health care,” she said. 

While the reasoning for jail expansion varies by jurisdiction, Mai said a good portion of the 77 counties studied were thinking about potential revenue.

In 2017, officials with the local government of Meigs County, Ohio hoped to construct a new jail with the capacity for 70 people in order to rent beds to nearby counties for $60 per person per day. Meigs County Commissioner Randy Smith told WOUB at the time that the revenue could boost the city’s budget. “That would help patch holes, it would help provide funding for unfunded mandates, it would allow us to continue to do capital improvements,” Smith said.

But voters twice rejected the $2.95 million levy that would have paid for the jail’s construction, once in 2017, and once in 2018.

Mai said both voters and elected officials need to think carefully about jails as a potential source of revenue, as the costs often end up being higher than return on investment.  “Building a jail is a huge capital project—and operating costs have increased dramatically recently,” she said. “It’s infrastructure they have to upkeep for years in the future.”

Mai also added that the jail bed rental market is fickle, and jurisdictions would be wise not to count on jails for a steady flow of income. “Contracts can fall through,” she explained. “There might be a series of local counties doing this, and maybe a neighboring county undercuts your price. Suddenly it’s a market economy. It’s certainly not a reliable source of revenue.”

That’s what happened to Littlefield Texas. The tiny town of 6,500 people built a correctional center in 2000 in the hopes that it would turn a profit by renting out beds to the overcrowded local jails throughout the state. The town spent $11 million constructing the center, and it originally held people from Texas, Idaho, and Wyoming. But, gradually, all the jurisdictions pulled out, and GEO Group, the private prison company running the facility, left the town. 

Despite being empty, the jail costs $65,000 a month to maintain. In 2011, the town put the facility up for sale for $5 million, with the intention of relieving some of their debt. An auction bid was made, and then fell through. Former City Manager Danny Davis, speaking with The Dallas Morning News, said that they had learned their lesson. “Anytime we are signing up for a long-term agreement that looks good right now, we’ll know we need to look further down the road,” he said.

Emma Coleman is the assistant editor for Route Fifty.

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