Actually, given the way many private corporate prisons are operated, a lower occupancy rate directly results in profit. The state is obligated to maintain the prisons at something like a 90%+ fill rate. If they fall below that, the state has to pay multi-million-dollar dines. Arizona recently faced this, paying out $3 million for not providing enough prisoners to one of their private prisons. It provides a monetary disincentive toward granting parole or shorter sentences... probably not a great idea.