Correctional Industries Raising Public Awareness of Correctional Industry Products and Services In Comparison To Peer States

Transcription

1 Correctional Industries Raising Public Awareness of Correctional Industry Products and Services In Comparison To Peer States A White Paper By Valisha Kirkland Holli Baker Patricia Wilson Arnold Mayberry Nancy Schlich Tim Connole Chris Hooks

2 The primary purpose of Alabama Correctional Industries (ACI) is to maintain a worktraining program for inmates in the Department of Corrections as well as assist state departments at securing requirements which can be obtained through services or products provided by ACI. The sale of ACI products is regulated by state and federal laws. Currently ACI is regulated at the state level. The sale of prison-made products is monitored for compliance with Alabama Law (Regular Session, 1976) Act No: 286, which states it shall be unlawful to sell or offer for sale on the open market of this state any articles or products manufactured wholly or in part in this or any other state by prisoners of this state or any other state, except prisoners on parole or probation. Now that the overall function of ACI and controlling factors has been reviewed, a question should be posed to all regulatory or interested parties in ACI. Where does Alabama stand in regards to other peer state correctional industry programs? In order to successfully analyze ACI and attempt to address this lingering question, several aspects of correctional industry programs must be analyzed. This white paper will attempt to address services offered by ACI, current revenue accumulation and redistribution, and compare accreditation into the Prison Industry Enhancement Certification Program (PIECP) program to other peer states. As with all state and private industries, there can always be room for improvement. Is Alabama prepared to follow the footsteps of other successful peer correctional industries? ACI Products and Services Alabama Correctional Industries is comprised of nine (9) manufacturing operations, four (4) service operations, three (3) fleet maintenance and repair facilities, a central warehouse and distribution center, and a construction and remodeling section. Over 450 products, custom items, and services are provided by ACI. 1 The following is an overview of the products and services offered by ACI: Products Office furniture Institutional metal furniture beds, dayroom tables, desks Vinyl binders Janitorial supplies Mattresses Clothing Printing o Letterhead o Forms o Business cards o Car decal o Name plates 1 Farquhar, A. An Introduction to Supplies and Services Available from ACI, PowerPoint Presentation, presented March 13, Industry in Prisons White Paper 2

3 o Award plaques o Custom metal signs Custom license plates Metal fabrication Grills, Fire rings, Trash receptacles Services Furniture restoration Vehicle restoration Lead Abatement Construction & Remodeling Transportation & moving services 2 In comparison to other peer states, Alabama lacks the volume of correctional industry products and services offered. There are a few factors which contribute to this shortfall. The first factor is facilities. ACI does not currently have vacant facilities to expand on the current products offered or to establish new products. All correctional industry facilities in Alabama are being used to their maximum capacity. Another factor is the limitation of ACI sales to state and government agencies. It is unlawful to sell or offer for sale any ACI products on the open market. Other states have tackled these critical issues by achieving PIECP accreditation and venturing into agreements with private industries. PIECP accreditation, discussed in a latter section of this white paper, addresses the issue of sale to private entities. The agreement with private industries has expanded other states capabilities in several ways. The right combination of contractual agreements with private industries will allow for more facilities provided either by the excess revenue accumulated or by the private industrial party involved in the contracts. These key steps by other states have also furthered inmate certification programs, expanded services and products offered, and increased correctional industry revenue. ACI Revenue In order to speculate about potential revenue growth, we must first analyze the revenue balances for ACI. The following is a summary of ACI revenue related to products and services for fiscal years 2007 and 2008: FY FY 2008 (pending ADOC annual report) Total Industries Revenue 21,237,942 20,502,277 License plates 6,828,412 5,892,330* Mfg. Goods 6,925,087 5,536,910 Printing 3,448,327 3,104,972 Fleet services 1,329,009 1,461,027 2 Alabama Correctional Industries, Overview, accessed 05/01/ See Industry in Prisons White Paper 3

4 Construction 2,067,682 2,974,016 Services 508, ,834 Miscellaneous 130,906 1,034,188** * 1.168M in tag revenue was not recorded as ACI revenue on the annual report FY It was recognized as revenue on DOC financials. The true total would be $7,060,330, increasing total industries revenue to $ 21,670,277. **total includes gain on sale of fixed assets from closed plants and casualty loss The potential for revenue growth in Alabama Correctional Industries is present. By pursuing the strategies of other correctional industry peer states, Alabama could generate more revenue for facilities, inmate certification training programs and disbursement of funds to the Department of Corrections. A Key Peer State The analysis of a key peer state could benefit the Alabama Correctional Industry Program by providing direction and establishing steps to acquiring obtainable correctional industry goals. Consider the revenue, products and services of the South Carolina Correctional Industries program. South Carolina s Prison Industry is one example of how the PIECP (Prison Industry Enhancement Certification Program) program has benefited both the state and local industry. From 1979 to December 2008, South Carolina s PIECP produced over $84 million in gross wages, ranking first among all PIE programs in the country. Ranking second and third were Kansas and Texas at over $56 million and $42 million, respectively 4. South Carolina s program has three levels of prison work available. The traditional and service programs include both products and services provided by a highly motivated and reliable work force. They may be purchased by city, county and state government agencies. The third program South Carolina participates in is the prison industry enhancement (PIE) 5. This program works in conjunction with 7 private companies producing hardwood flooring, apparel, computer wire harnesses, furniture and faucet handles. Currently 2,233 inmates are working in the Prison Industries in South Carolina 6. One company is the Anderson Flooring which employs 300 inmates at the Tyger River Correctional Institute in Enoree. In the 1990 s Anderson Flooring needed more labor and hired a second shift to meet demands. After many problems with absenteeism, drugs, and alcohol, the company turned to the Prison Industry in South Carolina for a reliable, trainable, and motivated work force. From only 14 inmates in the 1990s to over 300 today, Anderson flooring has flourished as a company with over 20 percent of sales from prisoner made products and over 60 percent of all production going 4 See 5 See 6 See Industry in Prisons White Paper 4

5 through the prison system 7. One of South Carolina s primary keys to superseding Alabama in the correctional industry is PIECP accreditation. To understand how the PIECP can benefit the state of Alabama, the definition, process and common misconceptions must be overviewed. PIECP The Prison Industry Enhancement Certification Program (PIECP) exempts certified state and local departments of correction from normal restrictions on the sale of prisoner-made goods in interstate commerce. The PIECP was first authorized under the Justice System Improvement Act of 1979 (Public Law , Sec. 827) and later expanded under the Justice Assistance Act of 1984 (Public Law , Sec. 819). The Crime Control Act of 1990 (Public Law ) authorizes continuation of the program indefinitely. Congress created the PIECP to encourage the establishment of approximate private-sector work opportunities for inmates, to include payment of prevailing local wages for similar work, and the ability for them to acquire marketable skills to increase their potential for successful rehabilitation and meaningful employment upon release. The PIECP allows private industry to establish joint ventures with the state and local correctional agencies to generate products and services using prison labor. The program is a cost-effective way for corrections administrators to reduce prison idleness and productively occupy a portion of the ever-growing correctional population. The PIECP provides a means of partial repayment to crime victims for harm sustained. The program provides a stable, readily available workforce and low cost manufacturing space to private-sector companies involved in the program. Because of inmate worker contributions to room and board, family support, crime victim compensation and taxes, the program provides a way to help offset the escalating cost of inmate incarceration. The PIECP offers inmates a chance to work, meet financial obligations, increase job skills, and improve the prospect of successful transition to the community upon release. To become certified, each agency must demonstrate to the Director of the Bureau of Justice Assistance (BJA) and the U.S. Department of Justice that it meets certain statutory and guideline requirements designed to create a level playing field with the private sector. Corrections departments that apply to participate in the PIECP must meet all nine of the following criteria: 1. Authority to involve the private sector in the production and sale of prison-made goods. 2. Authority to pay wages at a rate not less than that paid for similar work in the private sector. 3. Written assurances that the PIECP will not result in the displacement of workers. 4. Authority to provide worker benefits, including workers compensation. 7 Miller, H. (June 1, 2003) Wood & Wood Products. Inmates build new lives from the floor up: Anderson Hardwood Floors partnership with a South Industry in Prisons White Paper 5

6 5. Authority to take deductions not to exceed 80 percent of gross wages for room and board; taxes; allocations for family support; and contributions not to exceed 20 percent, but not less than 5 percent of gross wages for victim compensation. 6. Written assurances of voluntary inmate participation. 7. Written proof of consultation with related organized labor. 8. Written proof of consultation with related local private industry. 9. Compliance with the National Environmental Policy Act ( The following table is a comparison of Alabama Correctional Industry Net Sales to three other states including those participating in the PIECP program: PIECP State Comparison 8 Industry Profile Alabama North Carolina South Carolina Virginia Current Year Total Net Sales $17,836,000 $84,000,000 $28,359,690 $48,736,411 1 Year Growth 11.27% 5.95% -5.59% 2.46% 5 Year Growth 21.89% 17.26% 32.51% 27.68% % Sales to State DOC 21% 45% 9% 24% # of Industry Facilities # of Industries or Operations (including PIE) # of New Industries Planned # of Inmate Workers # of Inmate Workers (PIE) n/a Wages Paid to Inmate Workers $425,900 $1,057,462 $854,222 $1,672,413 Wages Paid to Inmate Workers (PIE) n/a $469,930 $9,673,334 $ - # of Civilian Staff Type of Organization State Agency State Agency State Agency State Agency Raw Materials, Supplies and Services (including PIE) $5,900,500 $44,000,000 $10,750,150 $24,504,737 These are interesting statistics when you consider how many in-state services Alabama already provides, net sales and number of inmates currently working. Alabama has the potential to surpass all other states in services offered, net sales and inmate worker totals by pursuing PIECP accreditation. Unfortunately, one of the main deterrents of state PIECP accreditation is acquiring the support of the BCA (Business Council of Alabama). 8 National Correctional Industries Association 2008 Directory Working on the Inside - Succeeding on the Outside. Also, it was printed by Virginia Correctional Enterprises. Industry in Prisons White Paper 6

7 There are many misconceptions in regards to PIECP which lead to apprehension within local private industry. One of the Alabama organizations concerned with PIECP, the BCA, was interviewed. The BCA has repeatedly taken a firm position against the proposed PIECP legislation. Our group interviewed a BCA contact, Victor Vernon, regarding the organization s apparent opposition to this legislation. Each argument is addressed below. All responses to the BCA opposition were obtained from Andy Farquhar, Alabama Corrections Industries (ACI) Director. One argument presented by the BCA is that correctional industries will compete directly against private business. Andy Farquhar referred to the percentage of total gross sales of ACI product lines attributable to non-profits and governmental workers. Although figures were not readily available for Alabama, non-profits usually make up less than 5% of the sales in other PIE states. In addition, the two major product lines to possibly benefit from the passage of the legislation would be custom furniture and furniture refinishing and reupholstery. However, any gain in sales would also be limited by capacity, due to the shortage of inmates eligible to work outside the fence based on custody classification. State workers and non-profits can already avail themselves of economical, inmate-made products through the State s technical college campuses adjoining Alabama Department of Corrections (ADOC) facilities. Another argument presented by the BCA is the aftermath of prison-private business partnerships. Private competitors would view the collaboration as an unfair advantage, through the use of low-cost prison labor. In response, Andy Farquhar referred to the PIECP certification criteria. Inmates working in prison-private sector partnerships where goods are manufactured have to be paid wages that are comparable to free-world employees performing the same type of work outside the fence cheap labor is not an issue here. The prison system would have to coordinate with the Department of Industrial Relations to confirm these salaries, and the Department of Justice conducts periodic audits of the program to make sure the participants are in compliance. It is important to note that prison-private partnerships typically create free-world jobs and employ management, administrative and support staff from the local community. One of the stipulations of the PIECP is that a company cannot shut down a manufacturing operation outside the fence and move it inside. Third, the BCA states that funding the DOC must involve more than simply building a stronger prison industries program. According to Farquhar, approximately 87% of the current ADOC budget comes from the General Fund. Less than 1% comes from ACI. However, the possible benefit from the passage of the PIECP legislation alone would only be about 2% of ADOC s total budget. Although these potential revenues would make up only a small percentage of ADOC s budget, they would be beneficial given the bulk of ADOC s budget is mainly fixed with items such as salaries, health care, bond payments, and food. ADOC has indicated that profits from Industry operations would only be used for deferred maintenance items and capital building needs. If true, the benefit is significant in that it would double or triple the current amount of funds available for these budget areas. Industry in Prisons White Paper 7

8 The BCA has stated that ACI must include methods of venting the pressure on correctional institutions through community corrections and paroles of non-violent offenders instead of becoming dependent on correctional industries. ACI and ADOC agree with this assumption. The pretense of this statement should work both ways. Why can t Alabama focus on community correction programs and the correctional industry program at the same time? ADOC is actively attempting to initiate community corrections programs throughout the state, but it is limited in what it can accomplish without local support. The PIECP program and prison-private partnerships would be the next step in furthering the correctional industry side of prisoner reform while increasing revenue. The only issue is whether Alabama decides to take this step. While there are currently 42 state PIE certifications granted and 36 states participating, Alabama is not one of them. 9 A FUTURE FOR CORRECTIONAL INDUSTRIES What opportunities are Alabama missing? An analysis was performed of private industries which might accept prison labor in Alabama and surrounding states. Historically, Prison Labor has been viewed as an attractive option for any work designed for Third World labor markets. At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies include: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Nordstrom s, Revlon, Macy s, Pierre Cardin, Target Stores, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom and TWA just to name a few. These companies are using low cost prison labor for everything from manufacturing aircraft components to booking reservations. The inmates have also been tasked with the assembly of circuit boards for computer and wireless cell phone companies. Another viable business for the prison system of Alabama is the manufacturing of the different electrical components that are used in the many Alabama based Automobile Companies. The inmates can be tasked with the assembly of wire harnesses for cars, assembly of different circuit boards located in cars, and finally the assembly and production of the seats for cars. There are several opportunities for the Alabama Prison System to increase correctional industries services while benefiting the state as a whole. Have all of these avenues been explored or does the process always get halted with the words private industry or PIECP? Alabama has great opportunities for expansion in Prison Industry labor. The question remains - Is Alabama prepared to follow the footsteps of other successful peer correctional industries?. 9 The source is Industry in Prisons White Paper 8