It’s Time to Reject Fines and Fees as a Solution to Budget Problems

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Connecting state and local government leaders

COMMENTARY | State and local governments must dramatically reduce their reliance on this hidden regressive system of taxation that worsens racial and economic inequities.

The Covid-19 pandemic has thrown the budgets of many cities, counties and states into disarray. City revenues, for example, are down about 13% on average, even as costs have soared. Now policymakers must choose how to respond. The last recession provides an important lesson: Don’t try to solve budget problems on the backs of the people who can least afford it.

Following the Great Recession, many state and local governments attempted to solve their budget woes in ways that worsened already deep and long-standing racial and economic inequities by increasing fines and fees as well as imposing new ones. States and localities dramatically increased the number and amount of fines and fees imposed on people for everything from minor traffic and municipal code violations to misdemeanors and felonies. And they used draconian tactics to collect them. 

This hidden, regressive system of taxation is entrenched in virtually every state, and in municipalities large and small across the country.

Now, in the midst of a pandemic that has fallen especially hard on low-income people and communities of color, local and state policy responses should target help to those who need it most and seek to undo racial and economic inequities. But we’re already seeing signs that cities and states may once again look to fines and fees to help solve their budget problems. 

Orange County, California tripled the fee charged to someone when their car is impounded for unpaid fines and fees. Georgia lawmakers increased fines to add more funding for jail officers. And New York City is projecting $42 million in increased ticketing revenue in its annual budget.

Expecting the poorest among us to solve the Covid-19 budget crisis is not only cruel—it’s impossible. For our economy to prosper, state and local governments must dramatically reduce their reliance on fines and fees. This inefficient and unreliable source of revenue systematically extracts funds from communities of color and increases encounters that lead to mass criminalization and potential police violence

When someone can’t afford to immediately pay a ticket or fine, they face additional fees and interest charges, driver’s license suspension, and, far too frequently, arrest and jail. Stuck in a cycle of punishment and poverty, people often lose their jobs or even their homes. We’ve created a two-tier system of justice that sentences millions of people to a lifetime of poverty.

Punishing people because they don’t have money is bad economic policy and one of the least efficient ways to raise revenue. A recent Brennan Center report found that Texas and New Mexico counties spend 121 times more than the IRS spends to collect a dollar of income tax. New Mexico's largest county, Bernalillo, spends $1.17 for every dollar of fines and fees collected. 

The amount of court debt that goes uncollected further demonstrates the absurdity of trying to collect money from people who don’t have it. Pennsylvania’s Allegheny County has at least $350 million in uncollected court debt, or $340 per adult. Florida’s government labeled 83% of court fines levied from 2014 to 2018 as having “minimal collections expectations,” meaning they’re unlikely to ever be paid.

Some states and localities have started to scale back the worst excesses of fines and fees. Fifteen states have recently ended the counterproductive practice of suspending driver’s licenses when someone can’t afford to immediately pay a traffic ticket or another fine, including seven states in 2020 alone. 

In response to the Covid-19 economic crisis, a large number of states and localities have enacted fine and fee policy changes like moratoria on collections and enforcement, permanently discharging outstanding court debt and eliminating many fees altogether.

Last year, California passed some of the most far-reaching reforms to date, ending the collection of 23 fees charged to people in the criminal justice system that included public defender fees, local jail booking fees and probation and parole fees. The state also forgave $16 billion in court debt. And Gov. Gavin Newsom’s proposed 2021-22 budget includes a funding boost for California courts that will further decrease the state’s reliance on harmful fine and fee revenue.

Fines and fees do more harm than good. And states and localities have many more productive and just ways to raise revenue at their disposal, like closing corporate loopholes or raising taxes on the wealthiest families. 

Now more than ever, we need to build on the momentum for fines and fees reform, not undermine it. Instead of repeating the mistakes of the past, lawmakers should take proactive measures to ensure that fines and fees are not a barrier to people’s basic needs, while resisting the temptation to increase fines and fees or ramp up aggressive collections practices. 

Lisa Foster is the co-director of the Fines and Fees Justice Center. She is a former California Superior Court judge and the former director of the Office for Access to Justice at the U.S. Department of Justice. Cortney Sanders is a senior policy analyst with the State Fiscal Policy division at the Center for Budget and Policy Priorities.

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