NC jails paid to house other governments’ detainees face tricky math, policy questions

NC jails paid to house other governments’ detainees face tricky math, policy questions

EDITOR’S NOTE: This is part 3 of the four-part investigative series Raising Jails, in which Carolina Public Press examines how and why North Carolina counties expand or build bigger jails, and the implications of those decisions for the future of those counties. This series is being produced in part through the financial backing of the Fund for Investigative Journalism.

Bladen County Sheriff James McVicker took office just as the county was building its new and long-awaited detention center.

Jail staff say it’s “like walking into a castle.” The 230-bed facility that opened in 2017 replaced the 79-bed facility built in 1965 that had been decrepit for years. 

While the old facility was overcrowded, Bladen’s new policies about who it holds in jail during the COVID-19 pandemic mean the county is holding fewer of its own people behind bars than in years past. 

Bladen is filling many of its empty beds with people from other counties, the state or the federal government. As a result, two of every three people housed in Bladen County are from a different jurisdiction. 

This exchange — jail beds for payment — is not unique to Bladen County.

Most North Carolina counties generate revenue by filling beds with people whom other counties, the state or the federal government have detained. But Bladen has one of the highest ratios of outside inmates to county detainees, mostly from the U.S. Marshals Service. 

North Carolina counties generated more than $81 million by holding people from other jurisdictions in the most recent fiscal year, with U.S. Marshals Service contracts providing the largest source of revenue. 

But those millions are not profit.

The funds may offset the cost of running a jail or the cost of building one. But if counties are not careful with their math, they may spend more to keep people from other jurisdictions in jail than they gain through the payments in return. 

Decisions to house federal and state inmates can play a sizable role in how county leaders decide whether to expand jails or build bigger replacements. County officials may not always have a clear understanding of the larger risks and costs when they gamble on a steady stream of outside inmates.

Earning revenue

County jails can house people for the federal government, either through the U.S. Marshals Service or through Immigration and Customs Enforcement, commonly known as ICE. 

Federal requirements are more stringent than those of other counties or the state, such as housing federal inmates in a different part of the jail. But in exchange, the federal government also tends to pay better. 

The U.S. Marshals Service uses a cost-estimating tool to create contracts with counties. Per the contracts, the estimate accounts for the approximate daily cost to the county to house someone. 

In the typical contract, the Marshals Service pays $65 per person per day but pays as high as $160 in Mecklenburg, which houses more federal detainees than any other North Carolina county, according to the U.S. Department of Justice.

The legislature created the Statewide Misdemeanant Confinement Program in 2011 to reduce prison crowding by having people convicted of lower-level crimes serve time in county jails rather than state prisons. This program pays a set rate of $40 per day per prisoner to all counties.

The state program paid out $9.2 million to counties in fiscal year 2021, a significant drop from years prior due to fewer people moving through the court system. The program paid out $15.5 million the year before, and $19 million before the pandemic in 2018.

Transylvania County held 25 people through the Misdemeanant Confinement Program until COVID-19 hit. Sheriff David Mahoney then decided to opt out until the pandemic was under control. 

“As long as you have good communication with the agencies you’re housing for, I really can’t think of very many drawbacks,” Mahoney said. 

“The only drawback is that you certainly do expose — maybe your agency, your county — to some liability that you might not otherwise have because you have someone in your jail.” 

Mahoney is the chairman and immediate past president of the N.C. Sheriffs’ Association, which the state pays $1 million per year to manage the Statewide Misdemeanant Confinement Program. The program provides an additional source of labor to participating counties by putting participants to work picking up litter on roadways and helping clean jails or run laundries. 

The reward is not without risk, though. If sheriffs decide to hold people for other jurisdictions, they need to do so responsibly, Mahoney said. 

Counties that experience problematic situations with state or federal inmates could find that expected source of revenue drying up. 

Sheriff James McVicker explains the many uses of the new Bladen County jail’s kitchen on Oct 6 in Elizabethtown. Melissa Sue Gerrits / Carolina Public Press

McVicker, a strong proponent for housing federal inmates, said if a jail doesn’t run its operations well enough, the federal government could cancel its contract. 

“I know some jails had several problems and had escapees,” McVicker said. “The federal people pulled their people out of there. Too much of a risk.”

For McVicker, that means the federal program makes jails more careful about managing the quality of their facilities.

In addition to federal dollars, jails may find another possible revenue stream by housing detainees from other counties that lack the necessary space for their own populations.

Until 2007, Sampson County was over its jail capacity and paid other counties to hold some of its inmates. Then, with a new 252-bed jail, Sampson County reversed the relationship and contracted with six of its neighbors to house their inmates, according to documents the county provided.

The rates, negotiated with each county, hover around $50 per day.

Pitt County is exploring a more creative approach. Pitt has a 96-bed unit that the county renovated in 2014 but has remained unused ever since, according to Chief of Detention Lim Capehart. The county does not have the additional 20 staff members it would take to operate that wing, he said. 

County leaders are looking to rent out the space. Another county would use the facility with its own staff and its own inmates, Capehart said. 

During the COVID-19 pandemic, counties have received an unexpected, though not entirely welcome, source of revenue. 

The state prison system slowed or stopped accepting prisoners from jails after conviction to help stop the spread of COVID-19. According to the state’s research, more than 80{2099cc1b97d4d5af6b378c51833a8c0e04bb5da587377bd6b2cb473fa3104767} of the cases in prisons during the delta-variant wave came from jails, prisons spokesperson Brad Deen said. 

This change in policy created a backlog of state inmates in county jails. By state law, for each day a county holds a state inmate, the state has to pay $40. Since February 2020, the state has paid counties $14 million, but many jail administrators complained that the backlog worsened crowding at their jails.

Even in nonpandemic times, counties can earn money through “juvenile holds.” 

Due to recent changes in the law, prisons and jails can’t hold children up to 18 years old with adults. Adult jails can, however, briefly hold children post-arrest while they wait to be transferred to a juvenile facility, as long as they are kept away from adults. That requires extra beds. 

The state has 12 juvenile detention centers, meaning some counties need to transport children who are arrested up to several hours away. 

Surry County’s jail administrator, Randy Shelton, said he has his eye on using some of the county’s soon-to-be-built beds for juvenile holds and holding misdemeanor inmates again, though that idea has not been cleared with the county commissioners. 

Do the profits add up? 

Though many revenue streams may trickle into a county’s coffers, the net result may not be as lucrative as it seems. 

Bladen County’s new jail, built like a spoke with a control room in the center and units running out in straight lines, was designed to require few staff to manage many inmates, McVicker said. 

For every Bladen County detainee, the facility houses two out-of-jurisdiction detainees.

The county claims to have made more than $3 million off its contract with the U.S. Marshals alone, which paid $75 per detainee over the last two years. 

But county estimates of how much they make by renting out jail beds need careful consideration, according to Jacob Kang-Brown, a researcher at the Vera Institute for Justice, a New York-based nonprofit that works to reverse mass incarceration. 

The revenues counties generate by housing people from other jurisdictions often create a feedback loop serving to increase sheriffs’ budgets and capacity, Kang-Brown said.  

That seems to be the case in Bladen, which used the federal dollars to hire eight new detention deputies and a maintenance worker, buy two transport vans and subsidize both the cost of jail upkeep and the annual debt from building the jail, according to county finance director Lisa Coleman

All that adds up to roughly $68 per federal inmate per day, according to fiscal year 2021 numbers, meaning Bladen earned about $7 in net revenue per federal inmate per day. 

After subsidizing the jail’s costs, $215,000 was left over for the county commissioners to allocate, according to Coleman. That money went right back into the jail.

It turns out, Bladen’s estimate didn’t fully account for the cost of housing federal inmates. 

By comparison, Haywood County calculates a $101.26-per-day expense at its jail, according to a document provided by detention center Capt. Glen Matayabas
Orange County’s costs are close to $120, according to the county’s Criminal Justice Resource Department director, Caitlin Fenhagen.

Estimates of expense vary in part because counties are often not very good at calculating the true costs of incarcerating people, Kang-Brown said.

Bladen County built its jail based on an assessment by a prominent architecture firm, Virginia-based Moseley Architects, which designs jails. The assessment predicted that Bladen will, over the next 30 to 40 years, need all its beds for its own inmates. 

The county also took out debt, with the plan to pay it from the county’s general fund. Two years after the jail opened, Bladen started housing for the U.S. Marshals. 

Financially, the federal revenue is a perk, not a necessity, county officials said. 

“It helps everybody,” McVicker said. “There’s not really a bad part to it.” 

Sheriff’s Office employees work in an office attached to the booking and holding area of the new Bladen County Jail on Oct. 6 in Elizabethtown. Melissa Sue Gerrits / Carolina Public Press

Next year, Bladen will move the money around and will use the federal inmate dollars to pay off its entire annual debt from the jail construction, which is $947,720.05 per year until 2059, according to Coleman. 

After paying off the interest and debts, it will cost Bladen a projected $38 million for an under-$20 million construction project, according to Coleman, for a jail that houses fewer county inmates than the old facility it replaced.

Resisting the allure of “profits”

Counties usually spend $20 million to $30 million to build a jail, according to data provided by the Local Government Commission, part of the State Treasurer’s Office.

Very few counties have the kind of cash on hand, meaning that most have to take on debt that they pay off over a couple of decades. 

Despite the allure of perceived profits that could offset high construction costs, unique parts of North Carolina’s system keep counties from financing bigger jails through an out-and-out jail-for-cash business strategy. 

The LGC, established by the state legislature in 1931, reviews counties’ financial plans before they can make major investments. The commission does not see housing for other jurisdictions as a reliable long-term plan to pay off jail debts, according to LGC staff. 

The limitation may keep North Carolina counties from making unwise investments in oversized facilities. For example, in 2009, Franklin County was considering building a new jail. The county was looking at a cheaper 224-bed expansion or a 331-bed facility that would be used to house people for the U.S. Marshals Service, according to LGC staff and commission notes from the time

After reviewing the finances, the LGC rejected the plan for a bigger build and told the county to build a smaller jail. 

The LGC’s interventions may save counties from future financial harm. The counties Kang-Brown studies, particularly those in Kentucky, have lost revenue and created even more precarious financial positions by building jails they can no longer pay off. 

However, the LGC only objects to counties presenting housing outside inmates for payment as their advance finance strategy. Counties may cite other ways of paying for the debt when seeking LGC approval, even as sheriffs and county commissioners assure voters they plan to use federal or other inmate revenues to ease the debt burden.

But other officials, such as Surry County Manager Chris Knopf, see the risk of counting on future possibilities. The county decided against trying to use federal detainees or inmates from other counties to fund some of the construction costs of its new $43 million jail set to open in 2022, he said. The facility will also include a new 911 communications center and magistrate’s office. 

The trouble with making financial plans based on housing people for other jurisdictions is that it’s not a guaranteed source of revenue, Knopf said. 

He looked around at the other counties building jails and decided that while there is a demand for beds now, the supply will be much greater in a year or two.

Contracts with the feds or other counties often last a couple of years, at most.

Relying on jailing contracts to pay the bills is a risky bet, according to Jasmine Heiss, the program director for a program opposing rural jail expansions at Vera.  

“There’s the peril of tying your community’s sort of long-term economic planning or financial decisions to an assumption that the number of people in federal detention is either going to increase or stay the same,” Heiss said. 

Even though counties have to show the LGC that they can pay for jail construction without funds from housing for other entities, the arrangements can still represent a financial risk for a county. 

Workers in the booking and holding area of the Bladen County jail in Elizabethtown on Oct. 6. Melissa Sue Gerrits / Carolina Public Press

In Bladen, the county would have to shoulder a greater share of its jail debt through taxpayer dollars. On an individual scale, nine staff positions depend on funds from the U.S. Marshals Service contract, not to mention the overtime deputies earn by transporting federal inmates.

If the county loses the U.S. Marshals contract, or even if the agency sends fewer federal inmates to Bladen, the overtime could dry up, and the jobs could be put at risk. 

Getting paid to house people for other jurisdictions also comes with a moral cost, Heiss said. 

“By repeating the idea that incarceration is a good, clean industry for counties, there’s sort of an implicit agreement that the policies that feed that system also make sense and ought to endure,” Heiss said.

It is an open secret based on decades of research that mass incarceration does not reduce crime or drug use. There’s research that shows unnecessary incarceration can actually increase crime, according to Jessie Smith, director of the Criminal Justice Innovation Lab at UNC. 

Surry County’s data manager for its substance use intervention programs, Jamie Edwards, said the balance between incarceration and social services is out of balance in the United States. 

“In criminal justice work, you want to have an equal level of rehabilitative services and punitive sanction,” Edwards said. “We’ve known that for 50 years.”

Nationally, Latino and Black people are disproportionately incarcerated in jails, state prisons, in federal detentions and prisons and by the U.S. Marshals Service, through which they become revenue sources when held in local jails.

Though North Carolina has reduced its racial disparities in jail incarceration, jails still hold Black people in jail at three times the rate of white people, based on data Vera assembled from the Department of Justice. 


Despite the revenue, counties have not been happy about the backlog of state prisoners during the COVID-19 pandemic. Surry County’s jail has been overcrowded since 2018. The September backlog of the 27 people waiting to be transferred to prison may have brought in $2,280 to the county, but it worsened the jail’s overcrowding. 

In the old part of the jail, built in 1974, 12 people are sleeping in cells meant for eight, jail administrator Shelton said. In the newer parts, built in 2004, the county has up to 30 people sleeping in dorms meant for 16, Shelton said.

Part of the overcrowding issue in jails across the state may stem from state prisoners housed at county facilities. 

A 2021 study from Disability Rights North Carolina, one of the “protection and advocacy” agencies that federal law requires in each state to protect the rights of people with disabilities, found that jails were housing people for the state even while jails were overcrowded. 

“Following an extensive review of public records, Disability Rights North Carolina (DRNC) staff found that from 2018-2020, 49 counties were paid more than $4.2 million collectively to house and transport sentenced misdemeanants during months when their facilities were at more than 100{2099cc1b97d4d5af6b378c51833a8c0e04bb5da587377bd6b2cb473fa3104767} capacity,” the report said. 

Transylvania County Sheriff Mahoney said in October he did not know about the report or that from 2017-19, the state Department of Health and Human Services cited 14 facilities in several counties for violating state regulations against overcrowding even as they were still housing inmates for the misdemeanant program, according to the Disability Rights report.

“If someone were intentionally taking on more inmates than their capacity would safely allow, obviously I think everybody would say that’s the problem,” Mahoney said. 

Overcrowding puts both staff and people held in a jail at greater risk, said Luke Woollard, a Disability Rights lawyer. It exacerbates staffing shortages and stretches resources like already limited medical care. 

State law requires counties to send monthly capacity reports to DHHS, as part of the state’s oversight of jail conditions.

DHHS warns counties when they are overcrowded or otherwise out of compliance with regulations, but has little real enforcement power, Woollard said. 

Still, Mahoney said he is not aware of any way the Sheriffs’ Association could monitor overcrowding. 

DHHS can shut down jails in full or in part, as the agency did in Nash County in 2019, but Woollard called that the nuclear option that is rarely used. 

In the analysis of overcrowded jails housing misdemeanant program inmates, Woollard suggested the Sheriffs’ Association use the capacity reports to know which counties are housing people despite being overcrowded. 

Eddie Caldwell, the Sheriffs’ Association general counsel, said the Association does not receive information on county jail headcounts, but noted that, “​​If information on county jails headcount is a public record, the Association could receive it.”

Caldwell said the Sheriffs’ Association is following the law in operating the misdemeanant program.

A number of other factors, such as arrest rates, bond decisions and sentencing decisions also affect jail populations, which can vary greatly day to day, week to week, on weekends, month to month, or based on a big event like a drug bust or a big concert or a “race weekend,” Caldwell said. 

But those spikes in population do not account for how some counties participating in the misdemeanant confinement have been chronically overcrowded for years, as the Disability Rights report shows. 

Sheriffs have the most control over the number of people they house for other counties, but scholars and sheriffs across North Carolina described the officials’ significant leeway to work across the criminal justice system to control the number of people in their jails. 

In the end, the standard for how a jail is run is determined by the people who elect the sheriff, Mahoney said. 

“The community should let their elected official know, here’s what our expectation is,” Mahoney said. “The elected official needs to hear that and act appropriately.

Ferne Dekker

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