Lawmakers worry about financial problems of company

Saturday, November 18th 2000, 12:00 am

By: News On 6

MADISON, Wis. (AP) _ A private prison company holding thousands of Wisconsin inmates in other states has seen its stock price fall to a small fraction of its worth two years ago, raising concerns of legislators.

Wisconsin has more than 4,300 inmates in five prisons operated by Nashville-based Corrections Corp. of America in Minnesota, Mississippi, Oklahoma and Tennessee. The cost to the state is $42 per inmate per day.

``The financial problems of CCA demonstrate the inherent danger of contracting out for prison beds with private firms,'' said state Sen. Gwendolynne Moore, D-Milwaukee. ``What would happen to Wisconsin's 4,700 prisoners sitting out of state should CCA file for bankruptcy?''

Corrections Secretary Jon Litscher said the situation was not cause for alarm.

``I feel confident they'll be able to work this out,'' Litscher said. ``I don't anticipate any disruption or diluting of any service we've had in the past.''

This week, CCA reported a net third-quarter loss of $254 million. The company's shares then fell 32 percent, to 31 cents a share on Wednesday. By Friday, the price was up to 47 cents a share. That compared with $40 a share two years ago.

CCA spokeswoman Susan Hart said prison operations were strong, despite what she called a one-time loss based mainly on restructuring on the corporate side.

``We're still a very viable company that we believe is providing a very important service, specifically to Wisconsin,'' she said.

Litscher noted that the growth in Wisconsin's prison population appears to be leveling off, having reached 20,600 inmates.

Several new Wisconsin prisons also are about to open.

``I think, quite honestly, with the right set of circumstances,'' all out-of-state prisoners may be able to return to Wisconsin within four or five years, Litscher said.