New Jersey lawmakers advanced legislation last week that would impose three new taxes on private prison operators.
The bill, A-4077, cleared the Assembly’s Public Safety and Preparedness Committee on a party-line vote—Democrats supported the measure while Republicans opposed it.
The proposal targets companies like CoreCivic and the Geo Group, which operate the state’s two federal immigration detention centers in Newark and Elizabeth.
How the Private Prison Taxes Work
The new legislation imposes three separate taxes on private prison operators.
First, facilities would pay an annual fee equal to 8% of their government contract value. Second, operators would face a monthly per-inmate fee of $15 per day—a charge designed specifically to account for the strain detention facilities place on local services. Third, private prisons would be subject to a new 3% corporate business tax surcharge on their net New Jersey income.
Revenue from the contract fee would establish a dedicated fund supporting legal services for indigent immigrants. Meanwhile, the per-inmate fee would support community programs including food security, housing, job training, and youth mentorship. The corporate surcharge gets split three ways between state, county, and local programs—municipal funds directed toward police and fire services.
During committee discussion, proponents of the legislation revealed that the per-inmate fee alone would generate more than $500,000 a month at current New Jersey detention levels.
Democrats Argue For Corporate Responsibility
Assemblywoman Mitchelle Drulis, the bill’s lead sponsor, framed it as an issue of corporate responsibility.
She noted that private prison operators reported more than $4.8 billion in revenue nationally in 2025. New Jersey facilities saw profits increase roughly 10% per quarter in the same year.
Meanwhile, municipalities hosting these facilities absorb costs that don’t appear on corporate balance sheets. Police, fire departments, housing programs, and emergency services all experience increased demand when detention centers operate locally, driving expenses upward.
“If private corporations want to operate in New Jersey, they should pay for the impact of their presence,” Drulis said during committee testimony, according to Jersey Vindicator. “They should not profit while local taxpayers absorb these costs.”
Republicans Strike Back
A rift quickly formed along party lines.
Republicans questioned the constitutionality of the measure, arguing it represents unfair targeting of private contractors. Assemblyman Paul Kanitra challenged provisions within the bill that direct funds toward legal services for immigrants.
Drulis responded that due process protections apply to all individuals in the U.S., regardless of immigration status.
The Next Steps
The bill now moves to the Assembly Appropriations Committee where it will have to clear before reaching a full floor vote. If approved through both chambers and signed by Governor Sherrill as expected, the measure would take effect January 1. The Senate companion bill has yet to receive a hearing.
As detention centers and for-profit prisons remain highly controversial, A-4077 would entirely change the operational dynamics within New Jersey’s borders.