That does not sound true at all. Source?
The current agreements state that a certain % of the prison will be occupied and the state will pay $x/prisoner/day.
Now what you have to consider is two things; first "what happens if the % isn't met?" simply put the state pays for "virtual prisoners" between the actual % and the agreed upon % (e.g. 100 non-existent prisoners will be paid for as if they existed).
So it isn't like the state is going to go roaming the streets and picking up random people for littering just to meet the % just because the contract says to. It still ultimately saves the state money to be below capacity as they can sit right at the agreed upon lower % indefinitely (plus other costs for prisoners are still met by the state: like transportation, medical, and so on).
Do I think private prisons try to promote laws which lock more people up? Yes, absolutely I do. But I don't think the % minimums within private prison contracts are a massive problem, and are only there to give both the state and the private prison more consistent financial obligations. It actually /looks/ worse than it is in this specific case.
However the private prison industry is a blight on the US and the US legal system is pretty well broken at this stage (e.g. innocent people pleading guilty because they cannot get real representation and it would bankrupt them, plea deals which are immoral, prisoners testifying against each other for reduced sentences (which incentivise lying, politics playing too large a role, money playing too large a role, mass corruption at every stage, etc).
Not to mention that if there are public and private prisons in the same state, they can always move them.
http://www.washingtonpost.com/blogs/govbeat/wp/2013/09/19/ar...
http://truth-out.org/buzzflash/commentary/prison-populations...
http://www.inthepublicinterest.org/sites/default/files/Crimi...
