In early July, the small Wisconsin town of Stanley, population
1,898, will be besieged by over 1,500 hardened criminalsmen who
have robbed, stolen, maimed and killed.
Community leaders couldn't be happier. The
town's newest residents will be tightly embraced by the steel bars and
concrete walls of the Stanley Correctional Facility, the Ninth District's
latest addition to a national prison building boom that started in the
1980s. The Stanley prison has sat unused since its completion in April
2000 as state legislators debated whether to buy the structure from Dominion
Venture Group, the private developer that built it on spec. When the state
finally bought it in October 2001, for $75 million, Stanley celebrated.
Whatever the prison might signify to the world at large, to Stanley it
offers the hope of survival.
"It's going to have a major economic impact," said Stanley's
mayor, David Jankoski. "Like a lot of rural communities, Stanley
began to lose its population, began to lose its business, as farming fell
off. We needed something to bring back vitality to the community, and
[that's] why Stanley bid for the prison." From the warden on down
to guards, cooks, nurses and maintenance workers, the prison will employ
about 400 people when it reaches capacity, with an annual payroll of roughly
The jobs are godsends for this struggling farm town. Stanley's population
shrank 6 percent during the 1990s as residents sought work elsewhere.
One local politician says the town hadn't issued a new housing permit
for nine years prior to the prison coming in. The recent recession has
also hit hard. The town's largest manufacturer, a wood veneer company,
recently laid off a quarter of its workforce. The local hospital and high
school are larger and more stable employers, but the prison will eclipse
Jankoski says the prison, emerging from a cornfield on the south side
of town, is already stimulating growth. Developers anticipating visits
by inmate families and professional staff recently opened a small motel
in Stanley. Construction is under way on a convenience store and small
cafe. A car wash and a fast food restaurant are in the works. A bank branch
is going into an old Tastee Treat site.
"Those are the sort of things that are on the drawing board before
the prison even opens," said Jankoski, adding that he's been encouraging
housing developers to build homes for incoming prison staff. Town officials
have annexed more farmland into city limits, planning ahead for an expected
boom in commercial and residential interest.
An uncertain strategy
Stanley has hitched its future to incarceration and it's not alone. Small
towns across the country, desperate to reverse their declining fortunes,
have eagerly sought out prisons for the jobs and expenditure they promise.
In the Ninth District, communities that once would have recoiled at the
prospect of a prison within their borders now offer free land, sewer and
water hookups, access roads and more to earn the privilege of housing
The strategy is not without controversy. Many small towns have been torn
apart by prison proposals as residents fear prison escapes, lower property
values and unwelcome families that might follow inmates to town. In one
bizarre Wisconsin dispute, a prison proposal was defeated by fears that
the town's children would be infected with HIV by mosquitoes harboring
It appears, however, that the greatest hopes and fears of prison impacts
may both be unwarranted. While prisons do bring jobs and money to small
towns, their economic multipliers are limited compared to other industries,
say prison experts, and prisons often incur a number of unanticipated
costs that others end up paying. On the other hand, critics' concerns
may also be exaggerated. Property values actually are often enhanced when
prison employees move to town and local housing markets tighten. Other
dangers are also overstated: Prison breaks are rare and escapees seldom
threaten local residents.
Overall, communities that weigh the pros and cons of becoming a prison
town are likely to find that the former outweigh the latter, but not always
and not by much. Towns would do well to consider other economic development
strategies and shouldn't be too eager to offer free land or other concessions
in order to host a shiny new lockup.
Moreover, the modest net benefits need to be considered in light of likely
future trends, according to analysts. These days, the greatest problem
with a prison-based development strategy may be that the market for inmates
appears to be stagnatingthe growth industry has matured. As crime
rates decline and policymakers question the wisdom of spending scarce
state dollars on inmate beds and correctional officers, prisons run the
risk of becoming half-empty white elephants marooned on the American landscape.
A rural growth industry
There are over 2 million people living behind bars in the United States,
four times the number held in prisons and jails just 20 years ago. While
some of this enormous growth has been accommodated in existing prisons,
most states have built new prisons to house their growing inmate populations.
Counties also have spent large sums on new jails or expanded cell capacity.
For a variety of reasons, a disproportionate number of these new facilities
have been built in nonmetropolitan areas.
In the 1960s and 1970s, an average of four new inmate facilities opened
each year in nonmetropolitan counties across the country, according to
Calvin Beale, a senior demographer at the U.S. Department of Agriculture
(USDA), who considered facilities with at least 150 inmates or 50 employees.
In the 1980s, the annual average for nonmetro prison openings quadrupled
to 16 per year. Over the next 10 years, the average increased to 24.5
"Although there's some variation from one year to another, on average
during the [past] decade, a new prison was opened somewhere in nonmetro
America every 15 days," noted Beale. "In the '90s, about 57
percent of all new facilities were opened in nonmetro counties, although
they only have 19 percent of the US population."
The fact that many prisoners now live where corn and soy once grew underlines
two rather startling demographic realities. First, there are now nearly
as many prisoners in America as there are farmers. And second, convicts,
mostly from urban areas, constitute perhaps the only major population
group that is moving back to rural America. Not by choice, perhaps, but
there they areat least for 10 to 20 years, with time off for good
Celling the Ninth
The unprecedented national trend toward increased incarceration during
the last 20 years is also seen in Ninth District states, though with considerable
state-to-state variation. The number of prisoners roughly doubled in Michigan
and Minnesota between 1980 and 2000, tripled in Montana and South Dakota,
and quadrupled in North Dakota and Wisconsin. Those figures obscure a
wide range in incarceration ratesthe number of inmates per 100,000
population. In 2000, Michigan's incarceration rate was 478 while Minnesota's
was just 129, among the lowest in the nation.
Because the census considers inmates as residents of the locale
in which their prison is sited rather than the county from which
they came, a local prison can have a striking impact on a town's
official head count. If you look at census data for Bon Homme County,
S.D., for instance, you'll see a startling imbalance in the male-to-female
ratio because the county is home to an 825-bed men's prison.
But prison counts also have a curious economic dimension. Since
a number of state and federal programs apportion funding according
to population, a prison can provide a financial windfall for its
In Minnesota, state officials estimate that the census directs
$200 to $300 per year per resident in federal funding. So a town
like Rush City, for example, which currently has 950 beds and might
be expanded to 1,550, could theoretically add nearly half a million
dollars to its annual revenue because it houses the prison.
Moreover, since inmates earn very little money, their presence
decreases a jurisdiction's per capita income, possibly allowing
it to qualify for federal aid for distressed communities. And since
most convicts lived in urban areas prior to conviction, their relocation
to nonmetro prisons shifts resources from cities to rural areas.
The sums involved are significant enough to be causing fights.
Last May, Michigan municipalities fought what local papers termed
a "census fray" over inmate counts after the 2000 census
"misplaced" prisonerslocating them in the wrong
census tract. State Treasury Department officials said that millions
of state dollars could be misallocated if census figures weren't
accurately attributed. Marquette officials estimated that the city
would lose $250,000 in state aid from gas and sales tax distributions
if the inmate population of the Marquette Branch Prison were attributed
to a nearby township instead.
In a similar census snafu in Minnesota, the census tract that houses
the St. Cloud state prison was reported as having no population,
according to the state demographer. Inmates at the Sandstone federal
prison turned up in the wrong tract as well.
Mistakes aside, the prison head count has a political as well as
an economic dimension. Because districts are redrawn and political
representation is allocated according to population, inmate population
shifts influence political power, even if the inmates themselves
can't vote. Wisconsin politicians recently launched an effort to
stop the loss of a US House seat resulting in part from the state
shipping thousands of inmates to prisons in other states.
The trend toward rural incarceration is seen widely across the region.
Montana's second largest prison, the Crossroads Correctional Facility,
was opened in September 1999 in Shelby, a town of 3,216, in the north-central
part of the state. The state's largest prison (not a new one) is in Deer
Lodge, population 3,421. While most North Dakota prisons are currently
in or near cities, economic development officials in Pembina County, in
extreme northeast North Dakota, have approached private prison firms with
a proposal to build there to accommodate the state's rapidly growing prison
In Minnesota, the rural town of Appleton, seeking to revive its flagging
economy, broke ground for its own prison in 1990, the nation's second
municipality to do so. The facility sat empty for nearly a year after
completion in 1992 and struggled for several more when it did find inmates,
but it has operated close to capacity since being sold in 1996 to a private
prison operator. Including Appleton, nearly half of Minnesota's 8,200
prison bed capacity has been built since 1980, and 84 percent of those
new beds are in nonmetro areas.
Wisconsin has added thousands of prison beds since 1980 in both rural
and urban settings and now spends over $800 million a year on corrections.
But even so, the state has not kept up with its growth in prisoner numbers
and it now sends over 4,000 inmates to private prisons in Minnesota, Oklahoma
and Tennessee. The Stanley prison will bring home over 1,000 of them,
a point that helped sell the prison purchase to some legislators.
But in the Ninth District, the prime example of what USDA demographer
Beale wryly calls "cellular rural development" is Michigan's
Upper Peninsula (U.P.). Nine of the U.P.'s 15 counties are home to a total
of nine prisons and four minimum security prison camps. All but two of
the prisons were opened in the last 14 years. And while just 2 percent
of Michigan's population lives in the UP's nine prison counties, about
18 percent of its prisoners do.
To gain the potential benefits of a new local prison, county and local
leaders have often felt compelled to launch vigorous lobbying efforts
and offer significant concessions to state or private prison builders.
"The states and private firms have learned that they don't have
to go out and offer things for rural communities to take the prisons,"
observed Beale. "Rather, they can extract concessions from the rural
Small towns commonly purchase the land and promise to build the water
and sewer infrastructure necessary to accommodate the prison. Civic leaders
in Rush City, Minn., for example, raised $700,000 in individual and business
donations, added it to a $40,000 city contribution and used the total
to buy acreage for a prison building site, a condition set by the state
in exchange for selecting the town. The neighboring town of Braham, initially
selected for the prison, had raised over $800,000 for the same purpose
before losing the prison when soil tests found the site was unsuitable.
In Shelby, Mont., officials used a $500,000 community development block
grant and an $800,000 US Economic Development Administration grant to
pay for infrastructure for the facility built there by Corrections Corporation
of America, the country's largest private prison firm.
The pros of cons
The rural development of prisons reflects a symbiosis between small towns
desperate to survive and state correctional authorities frantic for prison
beds. The political economy of the relationship is appealing in a number
of ways. To state officials (or private developers) rural sites are more
economical: Modern prisons call for sizable plots of land and rural acres
are cheaper than urban. To politically powerful residents of cities and
suburbs, sending criminals "up river" is more attractive than
siting a cellblock near the local community center. But to small towns
the appeal of prisons is simple: jobs.
Stanley, for example, got its prison largely because the local state
senator, David Zien, saw the potential for job development in his hard-pressed
region. And according to both politicians and economic development officials,
the prison's regional payoff will be enormous. "We have helped to
save the economy of the region we represent," said Bob Seitz, Sen.
Zien's chief of staff. Referring to an Ernst and Young analysis funded
by Dominion, the company that proposed and built the prison in Stanley,
Seitz said that in addition to the 400 jobs at the facility itself, the
prison will indirectly create another 319 jobs. "In the context of
Chippewa County, 719 jobs is great," said Seitz.
John Regetz, director of the Chippewa County Economic Development Corp.
(CCEDC), said that a typical EDC development project might bring in 50
or so jobs, so the Stanley prison is a huge prize. "It'll provide
a tremendous boost to Stanley, absolutely," Regetz said. But the
benefits will spread beyond the town, he emphasized. "On our landscape
this is very large project not just for this county, but the whole region,
the entire Chippewa Valley."
As if to emphasize the point, the CCEDC chose the still virginal Stanley
prison as the site of its 2001 annual meeting last May, with 150 or so
attendees listening to speeches and mugging for cameras as they posed
in inmate cells.
Gold bars in the UP
In the UP, prisons have become a welcome and largely unquestioned part
of the economic environment, and a major employer in many of the region's
counties. Prisoners make up 2.7 percent of the UP's total population,
and watching over them provides a livelihood for nearly 3,000 residents.
"It brings a tremendous amount of employment to the UP, a place where
good jobs are scarce," said Merry Morash, professor of criminal justice
at Michigan State University in East Lansing. "The majority of the
employees in the UP really see this as a job that allows them to stay
in the UP"
"As far as job creation, it's been a good thing for Newberry,"
agreed Carmen McLaren, director of the Luce County Economic Development
Corp. The Newberry Correctional Facility opened in 1996 as a renovation
of the Newberry Regional Mental Health Center that closed in 1992. Newberry
lost 300 jobs with the closing of the health center, but the prison now
has a staff of 397.
"By getting the prison in here, it's created those state jobs again
and those people spend that money locally," said McLaren. It has
also given Luce County one of the nation's highest ratios of prisoners
to total population: 13 percent of the county's population is behind bars.
Harold Dishaw, a Newberry businessman who pushed hard to get the prison
built in town, is convinced that it's been an asset to the local economy.
The "$12 million payroll coming into the community was just a big
plus," he noted, a boost that prevented the decline of a town that
"was hurting big time." Dishaw would do it again without hesitation
and even organized a delegation of local leaders to visit the state Capitol
recently to say they were ready for more.
Feelings are similar in the UP's Chippewa County, home to 4,332 prison
beds at five state facilities, according to Linda Peters, development
director and township properties manager for Kinross Township. Like civic
leaders elsewhere in the UP, Peters stresses the job creation and spending
that prisons generate. "All of the prison workers, they shop at our
grocery stores, they buy our gas," she said. According to Eastern
UP Regional Planning, Kinross state prisons employ 1,031 people, making
them the county's second largest employer and a stabilizing influence
in a town that has lost 10 percent of its population over the past decade.
But Peters admits that the stigma of being a prison town sometimes makes
it harder to attract new businesses. "You have to keep a positive
spin to it," by pointing out that prison workers are a well-paid
and sizable market. In a coup for a town of barely 6,000 residents, McDonald's
may locate a restaurant in Kinross, says Peters, in part because the prisoners
are allowed to purchase fast food once a month from local restaurants.
The captive market should prove hard to resist.
While there are decided advantages to having a prison within city limits,
most prison proposals have raised at least some level of local protest.
In Braham, Minn., residents objected that a proposed prison would change
the character of the town. One critic, Les Sundemeyer, printed T-shirts
suggesting that Braham would have to change its slogan from "Homemade
pie capital of Minnesota" (a title bestowed by the state's governor
in 1990), to "Prison capital of Minnesota." When the Braham
site failed a soil test, the prison went to Rush City, but residents there
objected as well and filed a lawsuit claiming the prison would despoil
a wetland. Seven years later, the suit is settled and the prison stands.
But hard feelings linger.
Similar disputes have greeted prisons in many Ninth District communities,
including Chippewa Falls, Wis., Shelby, Mont., Luce County, Mich., and
elsewhere. In some areas, the protests have been strong enough to crush
the project; in others, the protests themselves were crushed.
Critics of a prison proposal in Cavalier in North Dakota's Pembina County
are determined not to fall into the latter camp. "Why would we even
consider building a prison in probably the most gorgeous county in the
state of North Dakota?" said Bert Olson, a Cavalier auto and truck
dealer. "What I worry about is that once that hummer is built, now
you got to fill it, and then there's no turning back. You have changed
the social structure of your county forever."
Olson is concerned that prisons will bring crime and social conflict
to what is basically a safe and healthyif less than economically
vibrantcommunity. Prisoners' families sometimes follow them, said
Olson. "That's not introducing an element to our community that you
can build on." Olson also contends that becoming known as a prison
town will also introduce a stigma that could impede tourism and other
efforts to help the town economically.
Sara Boudrie agreed. "If I had
two job offers, similar pay, I think I would choose the place without
the prison," said Boudrie, a loan officer at the United Valley Bank
in Cavalier. Boudrie moved up from Fargo six years ago, drawn by the bucolic
character of Pembina County. "There's more and more people looking
to move out in the country," she said. "Prisons and crime are
things that people are trying to get away from."
In contrast, Julius Wangler, director of the Pembina County
Jobs Development Authority is hoping that a 500-bed prison will help stem
Pembina County's population decline by creating about 200 to 250 steady
jobs. The impact would be "tremendous, and it's pretty well recession-proof,"
he said. Wangler has met with private prison companies and state legislators
to ask them to consider Pembina as the site for North Dakota's next prison.
The state currently has the nation's lowest prison population, just over
1,000. But that number grew by over 14 percent from 1999 to 2000, the
highest growth rate in the country.
Not so good; not so bad
Emotions run hot in prison debates as fragile communities
weigh their fears of change and crime against their desperation for economic
survival. But according to Thomas G. Johnson, an economist and professor
of public affairs at the University of Missouri, "both the proponents
[of prisons] and those against them have got it all wrong."
Johnson, a somewhat reluctant "prison guru," has
studied the economic and social impact of prisons on small communities
across the country. "The proponents claim that this is going to solve
all the community's problems, and the fact is that these are not very
good economic development strategies," he said.
Prisons don't generate significant numbers of associated
industries, as an auto plant might fuel the development of delivery companies,
radio assemblers and electronic harness makers, Johnson noted. Such clusters
don't gather around prisons. "Manufacturing plants always are more
advantageous to the community than the prisons," Johnson explained.
"The prisons generate very few linkages to the economy."
In fact, one of the negative linkages of prisons is that
they can sharply increase demands on court systems and social services
in small communities. Baraga County prosecutor Joseph O'Leary said the
prison at least doubled the number of felonies his office had to handle.
"It definitely increased the workload," he said. "Let's
face it, we've got a sleepy little county here. Probably the bulk of my
caseload is drunk driving, domestic violence. Not that those aren't serious
offenses, but by far most of my felonies are coming out of that joint.
I['ve] got prisoners trying to cut each other's throats or attacking a
Guarding the jobs
Expectations about the local employment benefits of prisons
are often exaggerated, according to many prison experts, because prison
workers tend to commute considerable distances. "It's fairly common
that the town where the prison is located will complain that the workers
at the prison aren't living in the town," said Beale, the USDA demographer.
"They want them to be prisoners, too, in a sense. And the reality
of labor force patterns these days doesn't work that way. They're going
to live where they want to live."
According to local newspaper accounts, the 450 inmates and
145 employees at the new Shelby, Mont., prison have had little effect
on the local economy. The unemployment rate, school enrollment and home
sales were minimally changed a year after the prison opened. Real estate
agents and motel owners saw little or no impact related to the prison.
Residents explained the modest effect with the observation that few of
the prison's workers lived in the town; most commuted considerable distances
from their homes.
Some Shelby residents say the town has actually suffered
because of the prison. "Shelby has changed and not for the better,"
observed Patricia Hellinger, a local prison critic, who said that contrary
to predictions, business has declined in Shelby since the prison was built,
with restaurants closing and other shops shutting down. Both Havre and
Conrad rejected the prison that was eventually built in Shelby, she added.
"And now there's a telecom company that went into Havre and they're
employing 340 local employees. Shelby could have had something like that,
but instead we got a prison, which did us no good."
At the same time, many fears about prisons prove to be
unfounded or overstated, according to Johnson and other prison experts.
"Those against prisons worry about crime rates, land values, about
changing the nature of their community," said Johnson. "I don't
think there's ever been any evidence of that and I've looked for it."
Some families of prisoners do follow their relatives, as
many small-town residents fear, but their numbers tend to be small, their
stays temporary, according to experts, and crime rates haven't been shown
to change because of this "element."
Prison critics are right to fear that land immediately next
to the prison will usually decrease in value. But property values elsewhere
in the community are likely to increase in most markets to the degree
that prison workers buy homes locally. When the maximum security prison
opened in the UP's Baraga County in 1993, "the housing market just
shot up," according to O'Leary. "All of a sudden there was a
shortage; real estate values went up. There [were] very positive economic
impacts on that."
And prison escapesperhaps the most deep-seated fear
of those who oppose local prisonsare rarely a threat to the residents
of small communities. Linda Peters in Kinross observed that prisoners
aren't likely to hang around town if they actually did get beyond the
prison walls. "The prisoners aren't going to come into the housing
areas," she said. "They're going to leave. They're going to
run either down south to lower Michigan or over in Canada."
Desperately seeking scoundrels
So if the picture with regard to prisons is mixed, what's
a town to do? Clearly prisons have some benefits, and if no better alternatives
exist, trying to attract one might be a reasonable growth strategy if
it's estimated that the hidden costs won't exceed the potential benefits.
But the more significant questions these days concern the future course
of the prison industry. A number of factors suggest that its boom days
are overfor now (see "Busted?").
And for towns like Rush City and Stanley that are still anxious to fill
the beds of their bars-and-concrete growth strategy, the lack of demand
for prison space couldn't have come at a worse time.
Stanley will probably do fine. After all, Wisconsin is eager
to bring home its boys from Tennessee. But Rush Citywhich opened
its prison doors two years ago this monthis still waiting. Inmate
populations have run under a third of the prison's 950 bed capacity.
Since fewer prisoners mean fewer jobs, the town's leaders
haven't yet seen the payoff they expected for the political support they
threw to the prison project and the $740,000 they contributed to buy a
building site for it. But Daniel Hoffman, city administrator, says that
might change if the state puts more inmates behind Rush City bars. "I
think they're going to bring in a couple hundred more, fill up another
wing," said Hoffman. "When they're at capacity, there'll be
another 80 to 100 jobs out there."
Shirley Hjerpe, a Rush City resident whose farm lies next
to the prison, is also trying to be hopeful about the future of her town
and its prison. And her hope, too, rests on a curious yearning for more
"I just wish [the prison] would help the town a little
more," said the 75-year-old, who has lived in Rush City for most
of her life. "I hate to see the town go under but the way things
are going, you don't know. Maybe in time, if the prison itself gets full,
maybe then it'll change for the better."