No, state prisons are not privately owned. Every state prison in the United States is owned by the state government that built it, and each state’s department of corrections runs it. What causes the confusion is that some state facilities are operated by private companies under government contracts, which is a different arrangement from private ownership. As of the end of 2023, about 7% of state and federal prisoners were held in privately run facilities; the rest served their sentences in government-owned, government-staffed institutions.
Who Owns and Runs State Prisons
Each state has a department of corrections, or an equivalent agency, that owns and manages its prison system. These agencies answer to the governor, receive their budgets from the state legislature, and employ the wardens, guards, counselors, and other staff who keep facilities running. The land, the buildings, and the equipment are state property. Federal grants sometimes supplement state funding, but ownership and operational authority stay with the state.
This matters because the phrase “private prisons” gives a misleading impression. Even when a state hires a private company to run a correctional facility, the state typically retains ownership of the facility and dictates the terms under which it operates. The company manages inmates and supplies staffing, but it does so as a contractor.
What a “Private Prison” Actually Is
Two companies dominate the private corrections industry: CoreCivic (formerly Corrections Corporation of America) and GEO Group. They either build and operate their own facilities that house state or federal inmates under contract, or they take over management of government-owned facilities.
Private involvement goes beyond running whole prisons. In both publicly and privately managed institutions, contractors provide healthcare, food service, inmate transportation, phone and video systems, and commissary operations. A prisoner in a fully state-run facility might still interact with half a dozen private companies in a given week. Public versus private is not a clean binary. Most facilities sit somewhere on the spectrum.
How Many State Prisoners Are in Private Facilities
According to the Bureau of Justice Statistics, 88,618 prisoners were held in privately operated facilities at the end of 2023, about 7.1% of the total state and federal prison population. That breaks down to roughly 75,260 state prisoners (6.9% of the state total) and 13,358 federal prisoners (8.5% of the federal total).1Bureau of Justice Statistics. Prisoners in 2023 – Statistical Tables
Variation across states is dramatic. Montana housed nearly 49% of its prisoners in private facilities in 2023, and New Mexico, Arizona, and Tennessee each exceeded 27%. More than a dozen states held zero prisoners in private facilities, including California, New York, Iowa, and Louisiana. Some banned private prisons by legislation; others simply chose not to contract with private operators.1Bureau of Justice Statistics. Prisoners in 2023 – Statistical Tables
So in the states that use them, private operators can hold a sizable share of the prison population. In many states, they hold none at all.
How State Contracts With Private Operators Work
Private prisons operate on a per diem model. The government pays the company a fixed dollar amount for each person held each day, meant to cover housing, meals, supervision, and basic medical care. Rates vary by security level, location, and the contracting agency’s requirements. The company profits when actual costs come in below the per diem rate, and the margin widens with higher occupancy.
That is where minimum occupancy clauses come in. Many private prison contracts include what are sometimes called “bed guarantees,” requiring the government to pay for a set percentage of beds regardless of how many are actually filled. These guarantees typically range from 80% to 100%, with 90% being the most common threshold. If a state’s crime rate drops or sentencing reforms reduce the prison population, taxpayers may still owe for empty beds. Critics argue these clauses create a financial disincentive for the kinds of criminal justice reforms that reduce incarceration. The companies describe them as protection against revenue swings in a capital-intensive business.
How This Differs From Federal Prisons, ICE Detention, and Jails
Federal prisons are a separate system. They are managed by the Bureau of Prisons, which operates under the Department of Justice. Federal law gives the Bureau authority over “the management and regulation of all Federal penal and correctional institutions.”2Office of the Law Revision Counsel. 18 U.S. Code 4042 – Duties of Bureau of Prisons The Bureau also contracts with private companies and community-based facilities, though the scale of that contracting has shifted in recent years.3USAGov. Federal Bureau of Prisons
Immigration detention is a different picture entirely. Nearly 90% of people in ICE custody are held in facilities run by for-profit companies. That is where CoreCivic and GEO Group earn the largest share of their revenue. Immigration detention facilities are not prisons in the technical sense, since they hold people awaiting civil proceedings rather than people serving criminal sentences, but the physical conditions and operational models closely resemble private prisons.
Local jails are different again. They are typically owned and operated by county or municipal governments, with the county sheriff usually responsible for management. Jails mainly hold people awaiting trial, people serving short sentences, or people awaiting transfer to state or federal custody. Some county jails contract with state prison systems to house overflow inmates for a daily fee, creating a financial dynamic similar to private prisons.
Why Ownership Versus Operation Matters for Inmates
Where you serve your sentence affects your legal options if your constitutional rights are violated, and the differences are not intuitive.
Government employees who work in public prisons typically receive qualified immunity, which shields them from personal liability unless they violated a “clearly established” right. The Supreme Court ruled in Richardson v. McKnight that private prison guards do not receive this protection. Because private companies operate in a competitive market and can use tools like insurance and indemnification to manage risk, the Court found no reason to extend the same immunity government employees receive.4Legal Information Institute. Richardson v McKnight
Federal prisoners face a different problem. In Minneci v. Pollard, the Supreme Court held that federal inmates in privately operated facilities cannot bring constitutional claims directly against prison staff under federal law when state tort remedies are available. In practice, a federal prisoner alleging mistreatment in a private facility must sue under state personal injury law rather than pursue a federal constitutional claim.5Justia U.S. Supreme Court. Minneci v Pollard, 565 US 118 (2012)
Private prison employees can be easier to sue in some respects, because they lack qualified immunity, and harder to hold accountable in others, because federal prisoners cannot bring federal constitutional claims against them. The legal protections available to an inmate can depend not just on what happened, but on which facility they were assigned to.
Oversight follows the same pattern. When a state contracts with a private operator, the state keeps legal and regulatory authority over the facility, and the company operates under the terms of a detailed contract. The quality of that oversight is one of the most persistent criticisms of prison privatization. Contracts exist and standards are written down, but enforcement depends on whether the contracting agency has the staff, funding, and political will to hold the company accountable.