Testimony of Michael J. Sullivan

Secretary of the Wisconsin Department of Corrections

Before the House Subcommittee on Crime

Relating to H.R. 4100 - The "FREE MARKET PRISON INDUSTRIES REFORM ACT OF 1998"

Thank you Chairman McCollum and members of the House Subcommittee on Crime. I am Michael Sullivan, Secretary of the Wisconsin Department of Corrections and for the last three years have served as the first Chair of the American Correctional Association's Committee on Prison Industries. I appreciate the opportunity to speak to you on the subject of prison industries and specifically on H. R. 4100 as it may impact on prison industries in Wisconsin and other states.

Prison industries in Wisconsin and all other states are an extremely important program for agencies for many reasons. It is important to the inmates and it is important for the prison system. Most inmates come to prison with little or no real work experience or job skills. Prison industries provides the inmates the opportunity to learn basic work skills such as working eight hours a day, responding positively to a supervisor and working with other inmates in a productive manner. Additionally, they learn marketable job skills.

Prison industries is also important to the secure operations of prisons. From our experience, inmates working for prison industries do not wish to jeopardize their jobs. They follow the rules, they don't cause problems and institutions are more secure.

Prison Industries is also important to the state taxpayers. The cost of operating the industries program, including staff salaries, inmate wages and materials are paid from revenues realized from the sale of products and services. If not for prison industries, those costs would be borne by the taxpayers.

Finally, prison industries is important to the citizens of our state. Follow-up studies conducted in Wisconsin and many other states consistently indicate that inmates who participated in prison industries programs are less likely to reoffend once released from prison and return to prison less often.

State prison industries in Wisconsin have demonstrated remarkable success in the past decade. Bringing modern business practices to industries, Wisconsin gross revenues for industries sales have increased from $5.6 million to almost $20 million. Inmate employment in state industries has increased from 350 to almost 700. Additionally, in the past two years Wisconsin has been an active participant in the Prison Industries Enhancement Program or PIE Program. Our ability to be an active participant in PIE was only accomplished by forging agreements with business and labor leaders in Wisconsin. In this past year 80 to 150 inmates have been employed in our two programs at any given time. These programs produce products that are sold to our private sector partners according to their specifications. Inmates are paid prevailing wages and are required to contribute earnings to taxes, victims programs, child support and the cost of their incarceration. For the fiscal year ending June 30th it is estimated that inmates will have contributed over $614,000 for these purposes. Our participation in PIE Programs has had a positive impact on our overall correctional program and we plan to expand our participation in the next few months.

Specifically as it relates to H.R. 4100, I applaud the intent of the authors to expand the opportunities to grow prison industries at the federal and state level but my assessment of the proposal as it impacts Wisconsin's program is that it will have the opposite impact. I speak to Section 7 of the bill entitled "Modification of Prohibition of Sales of Prisoner-Made Products." One concern is that in line 15 it indicates that state industries are exempt from the prohibition on sales if the industry is operated by a person other than the state. The word "operated" is ambiguous. In Wisconsin's PIE programs, existing industries make products which are sold to our private partners. The inmates are employed by the state operation, supervised by state workers and paid by the state. Businesses chose this mode of operation to avoid the need to take on the administrative burden. It appears to me that the proposed language would preclude this arrangement.

The proposed change removes existing subsection (b) in section 1761 which clearly exempted the sale of agricultural commodities or parts for repair of farm machinery and does not apply to products manufactured for use by the Federal Government, a state or a political subdivision of a state. Removal of this subsection suggests that these exceptions no longer exist and would have a negative impact on not only our prison industries program in sales to other states, but also our correctional farms which sells products in the open market that often end up in interstate commerce.

Also the requirement to remove "state use" laws related to private sector ventures creates a problem for Wisconsin and I am sure many other states. Both of our current PIE projects operate within factories that also manufacture products covered by state use provisions. Under 1761(b)(1)(B)(ii) we would be forced to decide whether to continue the PIE project or stop producing products under the state use law. In either case our operations would be reduced.

From a technical standpoint the word "unless" in line 14 of the bill should be changed to "if." The word "unless" accomplishes the opposite of what is intended according to the analysis.

Finally, the repeal of the current requirements under PIE to pay inmates prevailing wage, allow for deductions for taxes, room and board, crime victims programs and child support and to assure non-displacements of free world workers is of great concern. It was these elements of the program that lead our legislature to agree to our participation in the program. Removal of these assurances and protections will likely eliminate support of the business and labor community that originally supported our participation in PIE. In total the current provisions in Section 7 of H. R. 4100 would reduce the scope of prison industries in Wisconsin.

In closing I want to again commend the intent of the legislation to expand prison industries and I express my willingness and interest in working to fashion legislation which will accomplish that goal.

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