Allow private industry to bid on the opportunity to take over the prison system and in turn allow them the opportunity to rent out prisoner labor to other industry for manufacturing or service jobs which are in no way in direct contact with the public.
As an example, a ficticious company "ProtectCo" wins the bid through competitive process to take over the prison system in WA State. This cost to the State would be less than the cost to manage the prison system with State employees. So the State saves money while still getting the same (or better) level of service currently offered.
"ProtectCo" then offers up screened prisoners with varying skills through a program much like a Labor Ready service. Boeing, for example, might have skilled jobs, such as sewing seat cushion materials, or packaging bolts into containers, etc. which could be cheaper than having the jobs outsourced to China but still cheaper for Boeing than hiring non-prisoners. The program would educate and train prisoners, giving them a leg up when they are paroled, but also a portion of the wages could be used as reparations to the costs of prosecuting their crimes and to victims.
Safeguards could be in-place to keep the lower-cost prisoner jobs from competing with skilled tradespeople - one would not want to see higher-paid skilled jobs shifted from a non-prisoner to a prisoner workforce.
Another possibility is to allow "ProtectCo" to offer up prisoner laborers for pot hole and litter patrols State-wide to beautify the State of WA.