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California Taxpayers to File Lawsuit to Prevent $12 Billion in Prison Construction Debt Payments

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By Thomas Nolan, Esq.

California taxpayers are standing up for their rights today. Taxpayers are telling Sacramento that they're tired of paying for more and more prisons, while every other social program faces devastating budget cuts. Even though the state is facing a $20 billion dollar deficit and our high schools, colleges, universities, health care facilities, and food banks alike are threatened with billions of dollars of reduced funding, the Governor and our Legislative leaders want to build 53,000 new prison and jail beds. We already have 170,000 prisoners in California. We don't need more prison beds -- we need sentencing reform and better support in the community for recovering drug addicts, people with mental illness, and parolees.

That's why we are filing our lawsuit today to stop the Governor from borrowing $7.4 billion in lease revenue bonds to build new prison beds, at a total cost of over $12 billion including interest payments. Operating these new prison beds will cost at least $1.5 billion each year, or a staggering total of $37 billion over the next 25 years. Our lawsuit argues that the $7.4 billion in lease revenue bonds violates the requirement in the California Constitution that all significant long term debts be approved by the voters. The lawsuit aims to force the state to ask its voters whether they want to build the 53,000 prison and jail beds proposed in AB 900. The New York Times has dubbed AB 900 as "the single largest prison construction program in the history of the US." Not only is AB 900 a tremendous waste of government resources, it also threatens the very premise of democracy by shutting voters off from their constitutional rights.

Our lawsuit includes an report by esteemed economist Adam Werner, a principal in the Securities Practice at CRA International, which details the waste and financial inefficiency of AB 900. According to Werner, "The use of lease-revenue bonds to finance these facilities is irrational from a purely economic perspective given the cost differential between using lease revenue and general obligation bonds."

Werner calculates the unnecessary costs associated with lease revenue financing to total an additional $2 billion in extra payments over the life of the AB 900 bonds. He also calculates that the total cost to taxpayers of borrowing $7.4 billion for AB 900 is at least $12 billion over the 25 year life of the loans. He also opines that an entity that chooses lease-revenue financing must be motivated primarily by concerns other than economic efficiency.

The landmark lawsuit filed today against a number of state officials, including the Governor, the State Treasurer, the Chairman of the Department of Finance, and the State Public Works Board, argues that AB 900 constitutes an illegal bypass of voters' constitutional right to vote on debt (California Constitution Article XVI, section 1) and an illegal waste of scarce government resources (Code of Civil Procedure section 526a).

With public opinion squarely against them, the Legislature and the Governor shut out the voters, passing AB900 in less than 48 hours with no public hearings. The last two times Californians were asked to approve prison construction bonds at the ballot box, they were rejected. According to the Public Policy Institute of California, California's voters think prison construction is the last priority of all budget items, and a majority of voters from both parities think that we don't need to build more prisons.

California has been built 23 new prisons in the past 25 years, and yet they're more crowded now than ever. AB900 is a continuation of a failed policy of building new prisons without addressing the root causes of mass incarceration. We can't build our way out of the prison crisis; increasing the number of cells will only increase the number of people in prison.

With California facing a multi-billion dollar deficit – thousands of teachers facing lay offs, thousands of children getting kicked off of healthcare -- we can't afford a $12 billion dollar prison expansion plan that doesn't even include funding to operate these new prisons. Californians have had enough of these sham prison proposals. The real solution to prison overcrowding is to reduce the number of people in prison.

Thomas Nolan is an attorney who is representing a coalition of Californians and taxpayers in a
lawsuit to stop an estimated $12 billion dollars of prison debt authorized by AB 900, passed last year, the full cost of the largest prison construction project in history.

Posted on May 06, 2008

Comments

Prison overcrowding could be eliminated for $6.5 billion or for zero dollars! Which would you prefer?

Although almost everyone has a strong opinion about prison, few know any facts about the prison system. If they had even a few facts, they would realize that the prison overcrowding issue is a self created issue that could easily and inexpensively be eliminated. A severe county jail bed shortage caused the shift of county jail inmates to prison where they occupy about 20,000 to 30,000 beds, the reason for prison overcrowding.

The actual 16,600 prison bed short-fall could be eliminated at no cost if our Governor stood up to the correctional employees union, the CCPOA. He could simply release Requests for Proposals for 16,600 correctional beds to house short term, low risk offenders and technical parole violators. This would provide a permanent fix to overcrowding at no additional cost and avoid spending any of the $6.5 billion in bond funds for unnecessary prison bed construction.

Unfortunately, he is no Ronald Reagan who would have taken such an action in a heart-beat. Don’t hold your breath waiting for this Governor to do anything so logical.

Posted by: richard mckone at May 6, 2008 02:26 PM

I am glad to see another organization join in this fight. Taxpayers for Public Safety (TIPs) filed a lawsuit questioning the legality of the lease bond ruse a year ago. If one is good, two is better. It would have been smarter and cheaper to just bite the bullet and create a sentencing commission to straighten out our ridiculous sentence structure (Californians vote for politically correct laws everytime there is a crime of the week) They vote for bad laws like 3 strikes and Jessicas law that do no more than cost billions more tax dollars and keep no one any safer. They are never applied to the individuals we are told, they scoop up the wrong targets everytime. Californians need to stop being stupid on crime. We need to start educating and rehabilitating. Punishment alone is a recipe for what we have now, 70% recidivism and a growing prison system at the cost of billions every year for nothing. $45,000 per year per inmate which is what it costs for a year at UCLA. What is wrong with us? Being angry at inmates does no one any good. The better stratedy is to show them a different way, change their path with education and job skills. That is how you give the hopeless hope. That is how you succeed in bringing down the cost and reducing recidivism. We need prisons for the most violent offenders. Others can be diverted to other programs. Stop letting counties send parole violators back to prison, it only causes more overcrowding and serves no purpose. Our legislators need to grow a set and make some big drastic changes to this failed system. Stop lisening to victims groups preaching hatred and politicians need the "tough on crime" soap box kicked out from under them. We don't need new laws with longer sentences. Get a clue. IT DOESN'T WORK!! Now we have the Runners out there with a new crime law that they hope to pass to add additional time to crimes and Assemblymen Todd Spitzer with his billionaire buddy promoting Marsys law that will also increase sentences and denie parole hearings among other things. These people don't get it. They can't get this legislation passed in our Legislature because the legislature knows about the billions more these new crime laws will cost Californians for no valid reason other than vengeance. It will however add more law enforcement jobs and create new departments to suck California dry.

WAKE UP CALIFORNIANS. VOTE NO IF YOU DON'T KNOW!! DON'T LISTEN TO COMMERCIALS PAID FOR BY POLITICIANS AND WEALTHY BUSINESSMEN. WE ARE THE LOSERS.

Posted by: Morris1 at May 6, 2008 04:42 PM

Actually, 16,000 or even 30,000 more beds will not be enough to eliminate the overcrowding in our prisons here in California. Many of them are operating at over 200% capacity. We hold approximately 177,000 prisoners, and the max they were designed to hold is about half of that.

Since President Bush just signed the Second Chance Act, it would be a good start to use the federal money this has attached to it, and implement more programs aimed at reducing the recidivism rate (which is at 70%). Our sentencing structures also need to be re-examined, as well as our parole procedures and guidelines.

There is a national movement that plans to send letters of concern about our nations prison issues to every single legislator in the country. Here in California we will be adressing the overcrowding issue, as well as other various problems that we see as being part of the cause for our abysmal recidivism rate, the poor medical treatment (where the medical reciever estimated that one inmate a week dies needlessly because of medical neglect) and on and on. It's called the 21st Century Tea Party, and we will be sending the letters out the week of July 4th and including a tea bag with our letters.

Seeing how America leads the world in incarceration rates, and that 1 in over 100 people are currently in prisons or jails in our country, it's past time to take action. This lawsuit is a good start here in California, and I support it 100%.

Posted by: Kima at May 6, 2008 09:45 PM

Whoa! Take a deep breath for a minute. I happen to be a Correctional Officer in a state institution that holds about 7200 inmates. I must say (and I am a progressive) that you don't want these men back on the streets. Many can barely read, don't have a work ethich other than selling dope, and are prone to violence. God knows what people are capable of doing while under the influence. Be careful what you pray for, you just may get it...

Posted by: Shawn at May 9, 2008 10:48 AM

I work in a California prison. Perhaps you should see how egregiously Californians are paying for the healthcare of these criminals where simply poor people, victims' families, and even veterans lack comparable healthcare.
These inmates get medical care that is far beyond what would be considered necessary. Unfortunately, prison doctors have to approve of these unnecessary treatments due to the ever present threat of law suits by opportunistic groups like the PRISON LAW OFFICE (www.prisonlaw.com), who have dedicated their work to the sheer welfare of rapists and murderers.
Unfortunately, it is only the occasional random deaths of inmates that the public hears about. Most Californians are shocked to find out that inmates get any healthcare, let alone the luxury kind that they get. Most prison employees like me, after they start working inside a prison, get amazed at the luxurious and great medical services the inmates get. If you have never spent time in a prison, you would not know this.
Tax-payers should find out about all the lotions, creams, dandruff shampoos, and moisturizers that these inmates get in the guise of medical care. They should find out about the thousands of inmates that get corrective minor surgery to their knees or shoulders (at 30,000 a surgery) for an injury that happened to them, say 20 years ago outside, but never bothered to fix - the kind of surgery that a pro athlete gets for improving his play. They should find out about the $20,000 nose jobs they get for a minor nasal septal deviation that happened to them 40 years ago as a child. California tax-payers should find out about thousands of inmates that get sophisticated radiology tests such as MRIs (at $3000 per MRI) for back, knee, or shoulder pain, which they fake in order to get special accommodations (like a bottom bunk which means a status symbol among prisoners). These are just examples of egregious extravagances that California tax-payers have to cover for their prisoners. If Californians were informed by the media about such things, they would write their legislators and force them to take a tougher stance against this wasteful insanity
The prison population has stolen the clause "Cruel and Unusual Punishment" out of its context of severe punishments over 200 years ago, to dupe the people of this state and country into giving them the luxuries of life inside America's Prisons. No wonder, over 70% of prison inmates are in there for not the first time. If prison had maintained its original meaning of a punishing environment, you would think more of them, having been there once, would do anything not to go back. Most career criminals in this state do not fear prison, and in fact look forward to being there.
Sure, give them life-saving treatment and treatment that would prevent major illness, pain and suffering, but you have to draw the line somewhere. Only a well-informed public could do this, through contacting their law-makers and fighting this at the Federal level, which is what is forcing California now to pay dearly. Last year, the State spent more than $7000 per inmate's healthcare! In comparison it spent less than $3500 per employee for state employees who are entitled to full medical benefits through their jobs.

Last month, a report by the Pew Center on the States came out that right now a record 1 in 100 Americans are in prison (http://www.msnbc.msn.com/id/23392251). They cited reasons such as high crime rate, tougher laws, etc. But a very important reason was the higher recidivism. Most inmates in California's prisons, about 75% are there not for the first time. This is partly because inmates have managed to make prison a much more pleasant place, than say 50 years ago, when prison was still considered punishment. It is really time for the Supreme Court to draw a line on how civil lawyers can abuse the 8th amendment for its ban on "cruel and unusual punishment". Many inmates are using this clause to win the comforts and luxuries of outside life behind bars, really taking away the punishment factor out of prison. Prison should have a rehabilitative factor. However, a good part of this factor is contributed by its corrective and punishment elements. Purely rehabilitative services should be reserved for those who have destroyed only their own lives. Punishment should still be part of the action applied to those who have destroyed other people's lives. Civil attorneys on behalf of inmates will try to make people forget about this, and want to make prison’s purpose only a rehabilitative one.
Money hungry lawyers and uninformed activist groups and judges (like Tilton Henderson) have strived to make prison a pleasant place in this country, in some instances almost like a country spa or at least an all-inclusive motel. The good, law-abiding citizens of this state are in a lose-lose battle with the criminals, gangs, rapists, and murderers. These elements are either in free society victimizing free people, or inside luxury prisons costing them billions of dollars. Only a well-informed public and their representatives can put a stop to this debauchery. Perhaps an independent review of the scale of prison medical services can help the public and politicians by giving them the ammunition needed in their battle against activist judges and lawyers, in keeping society safe without bankrupting the State treasury.

Posted by: prisondoc at May 9, 2008 11:11 AM

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