Prison products creating profits - 13abc.com Toledo (OH) News, Weather and Sports

Prison products creating profits

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From toilet paper and license plates to processed meat and furniture, products made by Ohio inmates are becoming increasingly profitable as the state's prisons act more like private businesses.
    
In fiscal 2013, Ohio Penal Industries made $7.8 million, the fourth straight year of increased profits, according to a Correctional Institution Inspection Committee report released this week.
    
The rising profits represent a turnaround from a $4.6 million deficit in fiscal 2009, when prison industry programs were criticized for poor quality at higher prices that private industries, according to The Chillicothe Gazette in southern Ohio, (http://ohne.ws/1mE5H0B)
    
To increase earnings, the Ohio Department of Rehabilitation and Correction closed eight unprofitable prison industry shops.
    
In fiscal year 2010, 14 of the 25 prison industry programs across the state were losing money. By fiscal 2013, only three of 21 programs were in the red.
    
"The staff started looking at raw material costs and how to make shops more profitable," said Annette Chambers-Smith, deputy director of the corrections department. "If we can't make it profitable, we will close it."
    
Among the three programs that were losing money in fiscal 2013, which ended on Sept. 30, is the vehicle service center at Chillicothe Correctional Institution, which lost $144,000.
    
Chambers-Smith said the center was relatively new and that a loss was expected.
    
The woodworking program at Ross Correctional Institution, also in Chillicothe, lost $124,000 and has since closed.  The modern furniture assembly program at Madison Correctional Institution, just outside of Columbus, lost $31,000 and has moved to a different prison.
    
Previously, prison officials opened shops for the sole benefit of engaging prisoners with meaningful work in an effort to prevent repeat offenses. Now, Ohio prisons won't start a program without being certain it can make money, Chambers-Smith said.
    
As unprofitable prison shops have closed, inmate participation has gone down. About 18,400 inmates were employed in fiscal year 2013 compared to over 23,500 in 2009, according to the Correctional Institution Inspection Committee report.
    
But Chambers-Smith pointed out that inmate involvement in prison industries has increased since 2011, when a plan was implemented to improve the programs and make them more profitable.
    
The most profitable program in fiscal 2013 was, by far, meat processing at Pickaway Correctional Institution, just southwest of Columbus. That program netted $2.1 million in fiscal year 2013.
    
Beverage production at the same prison was the second most-profitable program, making $890,500 last fiscal year. License plate production at Lebanon Correctional Institution, 30 miles northeast of Cincinnati, followed at $869,000, according to the report.
    
As the prison products industry has improved, fewer state agencies have requested waivers to seek goods outside of the Ohio Penal Industry, Chambers-Smith said.
    
Ohio law requires state agencies to purchase items from prison industries unless they can find a better, less expensive product elsewhere.
    
The shift is important because Ohio Penal Industries remains largely reliant on state government business for its profits. Only 8 percent of sales were from private industries, compared with 72 percent from the prison system and 19 percent from other state agencies, according to the report.

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