PIKE COUNTY, PA ― Pike County will get 25% of its funding from a contract with Immigrations and Customs Enforcement (ICE), with the signing of a renewed contract for the detaining of federal prisoners. This situation has raised concerns among county residents and financial institutions about the moral justifiability and the fiscal sustainability of the situation.

Back in April, S&P Global Ratings lowered Pike County’s General Obligation (GO) bond rating from A- to BBB+, meaning that the county’s tax power and ability to pay back loans has reportedly decreased. GO bonds are loans used by local governments to fund public projects such as public parks and roads.

“Part of the reason the bond rating lowered is because they’re so dependent on the ICE income,” Delaware Valley Action (DVA!) member Bell Hodges Smith told the River Reporter after an August 6 commissioners meeting. 

The Pike County Correctional Facility currently houses ICE detainees, an arrangement that has existed for 30 years. 

The study by S&P corroborates Smith’s explanation, stating that the rating “reflects the county’s increasing reliance on Immigration and Custom Enforcement (ICE) revenues to support operations.”

County commissioner chairman Matthew Osterberg told the River Reporter that during COVID, the county had depleted the amount that it had in its fund balances. 

“We went through that, we lost revenue, and all of those things were just impacted by that,” Osterberg said. 

Smith said that part of the reason revenue decreased during the pandemic was likely because the prison population, including the number of and ICE detainees, had decreased. 

County commissioner vice chairman Ronald R. Schmalzle confirmed to the River Reporter that since the county is only paid for the ICE detainees the correctional facility hosts, and because the county received less detainees, it contributed to a loss of revenue.

“So since that time, we have raised taxes to try and offset that. Obviously, that’s not a real popular thing to do in a county, but we’re working diligently right now,” Osterberg said, explaining the county’s solution for the bond rating downgrading.

Schmalzle added that the next meeting with S&P will be different from the last. 

“2025 looks like we’re gonna be about 4 million dollars ahead, and we’ll be much farther ahead than that this coming year, so it will be corrected,” he said. “We aren’t planning on borrowing any money, so the impact of the county is really negligible.”

The S&P research states that it anticipates balanced results for 2026, in part due to the new two-year contract with ICE that is expected to generate an additional $16 million in 2026 and $19 million in 2027. The new contract will account for 25% of the county’s $64 million budget. In 2024, ICE revenue accounted for 11% of the county’s $55 million budget. 

The county budget states a proposed $22 million in expenditures for corrections in 2026. 

The new contract provides 285 beds to ICE detainees for $178 per person, per day. No female detainees are being held in the facility. 

The report also states that “reliance on this revenue may not be sustainable in the long term and that there is not meaningful improvement toward reducing reliance.”

In response to that, Schmazle emphasized that the agreement with ICE is guaranteed, and has lasted 30 years.

“I believe there’s only 2 counties in the state of Pennsylvania that have guaranteed contracts with the federal government.” he said. “Is it unconventional compared to other counties? Yes. Is it unreliable? Absolutely not.”

The ethics of imprisonment

Smith said that besides being an unreliable source of county revenue, there are also some moral concerns with the county housing ICE detainees. She shared that the county has not verified whether the detainees have had the 5th amendment right of due process or not, which could be unconstitutional. 

Schmazle said that the county cannot verify if detainees have had due process or not, because the county is simply housing them and details are up to the federal government.

If people are concerned about the detainees, Schmazle said they are welcome to take a tour of the correctional facility. 

“We do this and we do it well, and we treat people properly,” he said. 

In January, Damion Davis, an ICE detainee, settled for an undisclosed amount after filing a complaint against county correctional officer Warden Craig Lowe and other staff. Davis alleged that excessive force was used for a minor infraction. This allegedly included pepper spray, being restrained for 10 hours, being called racial slurs and being choked until he was coughing up blood in 2021. The lawsuit was settled by The Pennsylvania Institutional Law Project and Davis is no longer detained.

Smith said without being able to verify if detainees have had due process, the county is complicit in holding people who have been illegally detained and holding detainees that have minor violations in the wrong facility.

Smith isn’t the only one with this sentiment. The DVA! has organized multiple anti-ICE protests, with the most recent being July 17 and 18 outside the detention center. 

“To me, it’s like being dependent on slavery,” she said.