Prison industrial losses grow, but officials hope for reversal

The losses widened last year at Silver State Industries, the state’s prison industry system, although officials hope that changes in ranching reimbursements will start to generate profits.

For the year ended June 30, Silver State posted revenues of $4.6 million, a 17.6 percent gain from 2011, according to a report on Monday to the Legislature’s Committee on Industrial Programs. Among the stronger contributors included the mattress, garment, furniture and print shops located in various prisons, according to Brian Connett, deputy director of industrial programs for the Nevada Department of Corrections.

The large majority of sales go to other government entities. But Silver State is one of the few prison industry systems that also sell into general commerce, which has sparked resistance from private companies that claim they are being undercut.

Inmates receive minimum wage plus certain benefits such as workers compensation coverage, but also see deductions for room and board and victim restitution. The pay accumulates in accounts they can use to buy tools, merchandise in a prison store or as savings upon release.

Silver State posted a net loss of $238,000, compared with the loss of $82,000 the previous year. Connett said that this could be reversed after a new contract with the federal Bureau of Land Management, which pays Silver State to graze horses. The bureau has paid a flat daily fee in the past, but the new deal will be more flexible to compensate for the size of the herd plus the cost of feed, which escalated rapidly last year.

“Our mission is to put to work as many inmates as I can and do that at a profitable margin,” said Connett.

However, the state is still owed $415,000 from Alpine Steel, for back rent and other charges as the contact operator of the metal shop at the High Desert State Prison, about 45 miles northwest of Las Vegas. Randy Bulloch, president of Alpine, indicated at a June committee meeting that a contract to fabricate metal parts for the SkyVue Ferris wheel across from Mandalay Bay would alleviate the financial problems.

However, Bulloch, the broker of SkyVue developer Howard Bulloch, said he did not get the contract and would have to pay off the debt over time.

Contact reporter Tim O’Reiley at
toreiley@reviewjournal.com or 702-387-5290.