Owner of private prison, Youngstown end tax feud
The legal clash between Youngstown city government and Corrections Corporation of America, owner of the private prison in the city, over a proposed $1-a-day prisoner tax could have had far-reaching financial implications that would have served no one’s best interest.
It’s fortunate, therefore, that the two sides had a meeting of the minds and are now free to pursue a more important goal: to prove to the U.S. Bureau of Prisons that the Northeast Ohio Correctional Center in Youngstown has earned the right to continue housing federal prisoners.
It’s not as easy as it sounds.
Although NOCC has a contract with the bureau of prisons to house more than 1,000 federal convicted and sentenced undocumented immigrants, there’s a private prison in Pennsylvania, also with federal prisoners, that is eyeing the new agreement. One will win; the other will lose.
The federal government pays Northeast Ohio Correctional $69.72 per inmate, whereas it pays Moshannon Valley Correctional Center in Phillipsburg, Pa., $65.22 a prisoner. It’s a safe bet that Moshannon will use its current per-prisoner charge to argue that it should be rewarded by the federal government for being less expensive than the Youngstown facility.
Aware that cost is one of the main considerations as Washington decides what to do — the deadline for proposals is Aug. 15 — Nashville-based Corrections Corporations of America is pulling out all the stops.
Top executives of the No. 1 private prison operator in the country made it clear to The Vindicator recently that CCA’s bid will be competitive, but they did express concern about the legal battle with the city of Youngstown over the proposed $1-a-day prisoner tax.
If the company were forced to pay it, they argued, Northeast Ohio Correctional’s operating costs would be affected. That, in turn, would have had a bearing on how the company approached the new federal contract.
The agreement with the city — it was reached after CCA’s meeting with the newspaper — means the company believes it can absorb the $300,000 annual payment to the city beginning in 2014.
By contrast, the tax would have cost CCA about $500,000 a year.
Mayor Charles Sammarone, who has publicly expressed his strong support for NOCC’s continued presence in the city, views the agreement as a win-win.
“We wanted to work something out,” Sammarone said. “We’ve had a good relationship with them. I have no issue with CCA. They’ve been a good employer,”
Such a testimonial is also crucial in the contest for the new federal contract.
On July 28, we urged residents of the Mahoning Valley to participate in a letter-writing campaign to show support for the private prison and the Nashville-based owner. As we noted, the 440-plus employees generate an annual payroll of more than $20 million. The prison has been an important economic participant — it pays $1.9 million in property taxes and spends $600,000 a year for goods and services locally — for 16 years.
The show of support from the community is crucial, which is why the end of the legal battle between Youngstown and CCA could not have come at a better time.
Now, it’s up to Valley residents to let their voices be heard in Washington. (A listing of federal and state legislators and other officials, along with their addresses and telephone numbers, was published Sunday on page A8.)
Most of the jobs at the NOCC would be eliminated if CCA loses the federal contract.