Corrections Corp. of Amer. might not renew Ariz. contracts

2 contracts could be cut because of state's budget issues

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Associated Press

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NASHVILLE, Tenn. Corrections Corp. of America said Thursday that two of its contracts to manage inmates from Arizona might not be renewed because of the state's budget woes.

CCA said the budgets proposed last week by the Arizona governor and legislature would phase out the use of private out-of-state beds. CCA currently has management contracts with Arizona at its 752-bed Huerfano County Correctional Center in Walsenburg, Colo. and at its 2,160-bed Diamondback Correctional Facility in Watonga, Okla.

As a result of the budget proposals, CCA said that this year "there is a significant risk that CCA will lose the opportunity to house offenders from Arizona."

The contract with Arizona at Huerfano expires on March 8 and its contract at Diamondback expires on May 1.

If one or both of the contracts aren't renewed, CCA said it expects prisoners would be transferred out within 30 to 60 days following expiration of each management contract. If Arizona removes the prisoners at these facilities, CCA said it will likely close the prisons.

CCA made about 56.5 million in revenue from both of the contracts last year.

Shares fell $2.22, or 9.8 percent, to $20.43.