Your tax dollars at work: Prisons boost construction spending

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Monday’s news of a slight bump in construction spending lifted the stock market and added to budding hopes that the economy is stabilizing. As we noted earlier, home building was not part of that spike in construction. Private home construction was actually down 4% in March from February, and was 34% below March 2008.

Public construction, which was up about 3% in March over the previous year, helped to prop up total construction spending, as private construction was down 16% in March from the previous year.

What’s the government building? The two leading categories of public construction spending, tied for first place at $17.3 million in March, were offices and ‘public safety.’ The biggest share of public safety construction funds go to prisons and jails.

Two-thirds of state and local public safety construction spending in January went to prisons, jails and police facilities, according to the Census Bureau. January is the most recent month for which the bureau has posted spending by categories. The bureau does not break down federal public safety spending, but state and local spending on detention alone in January ($3.88 million) topped all federal public safety spending that month ($3.73 million), and the federal category did include prison construction spending.

So while no one expects home construction to take off any time soon, a lot of money is being put to one form of housing. It’s a societal shift that deeply concerned former HUD Secretary Jack Kemp, who died Saturday. Kemp had warned we were becoming a nation of ‘small government and big prisons.’

-- Peter Y. Hong