Rural communities are in the midst of a quiet jail boom, financed in part by the U.S. Department of Agriculture (USDA). Over the last two decades, the USDA has been funding jail construction through a program designed to finance infrastructure like emergency services, hospitals, fire stations, and community centers in agricultural areas. But these funds are now increasingly being directed to helping some rural counties build new, expanded jails, and helping others stay in the business of immigrant detention.

This past summer, the Trump administration announced that the USDA would give farmers up to $12 billion around harvest time to insulate them from the effects of the administration’s trade wars. At the same time, according to public records, the Trump administration also increased USDA investment in jail construction. Over the past four decades, and in the context of increasing inequality and economic decline in rural areas, the construction and expansion of the infrastructure of incarceration has been justified in terms of rural development. That the USDA is funding jails shows just how insidious this idea has become in terms of federal policy.

In upstate New York, Greene County is going forward with a $39 million low-interest loan application to the USDA to build a massive new jail that many in the community simply do not want. And, in Baker County, Florida, a USDA refinancing loan is essentially bailing out investors in a large, county-run jail and immigrant detention center.

USDA Community Facilities Direct Loan and Grant Program

The Community Facilities Direct Loan and Grant Program dates to the Nixon administration and the Rural Development Act of 1972. The program ostensibly serves to improve economic development and quality of life. Because it is mostly based on loans, it is a less generous approach to rural development than that pursued briefly in the 1960s, before the high costs of the Vietnam War choked off the expansive programs of Johnson’s Great Society initiative in rural areas. While the program has historically been used to fund public infrastructure, it was not until 1996 that the USDA decided to fund a jail: the Hale County jail in Greensboro, Alabama, for $2.2 million. Since then, according to various records of the transactions, the USDA has funded over $360 million in jail construction in rural areas.

That funding has picked up speed since 2015. And, while total overall spending for the Community Facilities program has fallen by one-third since a peak in 2010, total funding allocated for jails has increased by more than 200 percent since 2010. In 2014, the USDA allocated almost no funding for jails, but in fiscal year 2017, it provided $31.5 million in direct loans at very low interest rates for four jail projects in rural communities. In fiscal year 2018, it plans to spend $75 million, more than double the previous year, on jails in Greene and Baker Counties.

Greene County, New York

In a report published last year, the New York Commission on Correction described the Greene County jail as one of the five worst in the state, citing inadequate facilities, staffing deficiencies, and a lack of response from the county sheriff to the commission’s oversight. This spring, the sheriff closed the jail, located in the county seat of Catskill, because of structural damage, and started pushing plans to build a massive new jail complex in the town of Coxsackie. Since the closure of the old jail, Greene County has been sending people across the river to neighboring Columbia County, which, like many counties upstate, overbuilt its jail in recent decades.

The planned Greene County facility was designed to hold nearly 100 people, despite an average daily population of 50 in the jail last year. Filling the new jail would put Greene County in the top 10 largest New York jails on a per capita basis. To pay for the project, which is unusually costly because it will be sited on poorly drained clay, the county has submitted a $39 million loan application to the USDA.

There has been a highly visible campaign among county and state corrections workers to build a new, and bigger, jail. Driving through the village streets and two-lane roads across the county, one can see signs stating the economic interests of corrections officers in this prison county in the starkest terms: BUILD A NEW JAIL: KEEP OUR MONEY AND JOBS IN GREENE COUNTY.

When I went to Greene County this fall, I learned that many people there are strongly opposed to building the massive new jail. In interviews, residents point out that the costs involved are not only unnecessary, but that they will also preclude investment in social or economic development programs for decades. “It’s a lot of money,” said one woman. “It will quadruple our debt. And then, for the next 30 years, there won’t be money for any other programs. I mean, how? You can’t. It’s not sustainable for that kind of money, to run a prison that large, and pay the debt.”

The debate over the proposed jail in Greene County has become a debate over the meaning of development in this rural county. “What they [the USDA] seem to be doing,” one Greene County activist said, “is helping to make people more disadvantaged upstate. And one of the key questions is, are they really encouraging people who borrow money to have more [jail] beds?”

Baker County, Florida

In 2008, Baker County, in northern Florida, took on $45 million in debt on the municipal bond market to build a 512-bed jail. The objective, according to documents sent to investors, was to rent the new beds to federal agencies in order to create a revenue stream. By building a jail that far exceeded the county’s needs, Baker hoped to earn enough to pay for incarcerating an increasing number of people held for the county. County leaders intended to rent out the majority of the new jail to U.S. Immigration and Customs Enforcement (ICE) for immigrant detention. This business model, however, never quite worked out, as fewer ICE detainees than expected were sent to the county. Now, looking for ways to refinance and keep the jail open, Baker County officials have turned to the USDA.

Baker is a county of 27,000 people, just west of Jacksonville. When local leaders were discussing how to build a new jail, they got a call from Michael Rozos, a now-retired ICE field director out of Miami, who suggested that the county build a massive facility and rent out most of the beds to federal agencies. Glades County, in the southern part of the state, had started building for this same purpose a couple of years earlier, also under Rozos’s guidance.

The story in Baker County is similar to the one Vera recently detailed in Glades County: Baker County built an enormous county jail for ICE, aligning the county with the increased criminalization of immigration. The jail project in Baker was a carbon copy of the deal put together for Glades. Both counties set up nonprofit corporations to finance the construction of their respective jails and to insulate themselves from risk. The same architectural firm designed both projects, and they shared the same underwriter, bond counsel, and feasibility consultant. OppenheimerFunds, the large New York City mutual fund firm that invested in the Glades County Detention Center, was also a major investor in the Baker County Detention Center.

During the Obama administration, ICE sent fewer detainees to Baker than the county had anticipated and, as a result, the county spent $12 million out of reserve funds to help the jail pay bills during these lean years.

In 2016, the IRS audited both the Glades and Baker facilities and ruled that both detention centers were out of compliance with recently released regulations that clarified the appropriate uses for tax-exempt bonds—and found that investors might have to pay back taxes. As a result, Baker and Glades counties needed to redeem the tax-exempt bonds and reissue them as taxable bonds.

Glades negotiated favorable terms with the investors for their new taxable bonds, but Baker took a higher rate of 8 percent interest, rising to 8.5 percent after the first year. Then, to lower its payments, the county applied for a loan from the USDA in July. Unlike Baker’s new high-interest taxable bonds, the rural development loans have low interest rates and long repayment schedules—a core feature of a program meant to stimulate rural economies. The loan from the USDA would bail out the jail by repaying the investors, while taxpayers continue to bear its costs.

Conclusion

The USDA, by offering low-interest loans for jail construction in agricultural areas, is facilitating investment in incarceration rather than other community needs. Asked about USDA investment in jail and detention facilities, Assistant to the Secretary for Rural Development Anne Hazlett spoke generally about the benefits of rural investment, “Rural communities represent a wealth of opportunity. Under Secretary [Sonny] Perdue’s leadership, USDA is committed to being a partner in bringing those opportunities to life—whether it be through attracting jobs, accessing additional capital, or improving the quality of life in these towns through access to modern community services and public safety.” Many people in rural counties, however, contend that investment in the county’s capacity to detain and incarcerate comes at the cost of other pressing social programs, like mental health treatment, while motivating local courts and law enforcement to fill bigger jails.

The USDA Community Facilities program, meant to improve economic development and quality of life, is instead increasingly being used to fund the infrastructure to detain and incarcerate more people in rural counties across the country. In upstate New York, the loans will mean a 30-year investment in local incarceration. And, in northern Florida, an ICE immigrant detention center that doubles as the county jail will remain open for business.