State budget office outlines prison‑capacity options as caseload projections climb

The Office of State Planning and Budgeting presented a sweeping package of comebacks on March 16 and told the Joint Budget Committee that one of the more consequential items is a potential response to accelerating prison caseloads.

OSPB Director Mark Ferandino said recent forecasts for the Department of Corrections point toward rapidly increasing demand for capacity. He described two main options: purchase and renovation of an existing facility (he cited an order‑of‑magnitude estimate in the neighborhood of $100,000,000 and said renovation/purchase plus ramp‑up could take 12–18 months) or contracting with private providers, which would likely require multi‑year contracts and may entail high per‑diem costs. "We think it's somewhere of 12, you know, a month ... 12 to 18 months before it can be fully up and operational," he said.

Ferandino proposed one financing approach that would swap $100 million of marijuana tax cash fund (MTCF) reserve out of liquid reserves into a hard asset (the purchased facility) and then fill the emergency reserve with the acquired asset. He also discussed using debt financing (COPs) and other transfers to cover renovation and capital costs.

Committee members pushed back. Senator Mobley called outright purchase "an obscene misuse of public funds" compared with alternatives such as converting nursing homes, expanding community corrections capacity or bolstering supportive housing and mental‑health infrastructure. Several members asked whether policy changes — revising mandatory overrides in the inmate classification system or changes to earned‑time rules — could reduce the need for additional beds. DOC and prison officials explained classification rules and said changes could yield some capacity but would not fully address the projected shortfall.

Why it matters: The discussion signals a material budget choice with multi‑year capital and operating implications. Purchasing and renovating a prison would create a large new capital line and require operating dollars in future budgets; contracting could lock the state into long contracts with variable per‑diem pricing.

Next steps: The administration did not ask the committee for an immediate authorization to purchase. OSPB said it would return with more detailed cost estimates, financing options and stakeholder analysis as balancing work continues.