Montana, Prison Company at Impasse in Negotiations

Critics accused CoreCivic of trying to take advantage of the state's budget problems

By Associated Press

HELENA – Montana and CoreCivic are at an impasse in negotiations a little more than a year before the private prison company’s contract to run Crossroads Correctional Center expires and the state would have to buy the 550-bed Shelby prison.

Montana Department of Corrections director Reginald Michael and Gov. Steve Bullock’s budget director, Dan Villa, traveled to Nashville, Tennessee, this week for talks with CoreCivic.

Villa said Thursday the state presented two offers and rejected CoreCivic’s counteroffer. There are no other talks scheduled and Montana officials will now wait for CoreCivic to make a “reasonable” offer, he said.

“From my perspective, the last offer they put on the table wasn’t a real offer,” Villa said. “Every other provider in the state has taken a cut, and they want a 5 percent increase?”

CoreCivic and the state agreed on some provisions, such as the length of the contract extension to mid-2021, and that the state would pay for some additional staff and some programming improvements.

But the sides are far apart on the money. The state now pays a $63 per prisoner-a-day fee to run the prison plus another $9 per prisoner, per day facility use fee that goes into an account that would go toward the state buying the prison.

Montana officials first offered to pay $63 per prisoner, per day, eliminating the facility use fee and the state would receive $34.1 million from the facility use account. After CoreCivic rejected that, the state offered to pay $69 per prisoner, per day, and the state would receive $32.3 million from the account.

CoreCivic’s offer included charging $72 per prisoner, per day to run the prison. The state would also receive a $35.7 million payment from that facility use account.

“The Montana officials rejected CoreCivic’s offer and ended negotiations,” CoreCivic spokesman Steven Owen said.

The $30 million-plus payment to the state was seen as a key incentive after the state has gone through rounds of budget cuts due to lower-than-expected revenue. Legislators passed a bill during last year’s special session that said Bullock could use $15 million of that money for the state firefighting fund and the rest to ease the budget cuts.

Critics accused CoreCivic of trying to take advantage of the state’s budget problems.

Villa said there is no deadline to reach a deal ahead of the June 30, 2019, expiration of the contract. If no deal is reached, the state would buy the prison with money from the facility use account and could look to another private prison company or a nonprofit to run Crossroads, Villa said.

But the best option is for CoreCivic to come back with an offer in line with the state’s position, Villa said.

Owen said the company is committed to keep working with Montana officials to figure out a solution.

“We at CoreCivic always believe there is a way to find common ground,” Owen said.

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