Fines and Fees: Raising Revenue at the Community’s Expense - Fiscal Policy Institute

(Albany, NY) As New York State looks toward restarting the economy in the wake of COVID-19, a new report from the Fiscal Policy Institute (FPI) warns local governments not to rush to build revenue through the use of fines and fees – a long-standing, inequitable source of funding primarily drawn from low-income communities and communities of color. 

 

Between 2010 and 2017, 31 city governments, out of 62, in New York State reported an increase in expected fine revenue in their annual budgets, with a median increase of 25 percent. A 2017 study by political science researchers Michael Sances and Hye Young You from the University of Memphis and Vanderbilt University found that the use of fines and fees for local revenue is common in cities with larger black populations. Traffic fines have been a big part of the problem since they make up a sizeable portion of all fine and fee revenue relied upon by local governments statewide. In Buffalo’s fiscal year 2019-20 budget, traffic fines account for 24 percent of all fine revenue anticipated; In Poughkeepsie’s fiscal year 2019 budget, traffic fines account for 46 percent of all fine revenue anticipated.

 

Statement from Ron Deutsch, Executive Director, Fiscal Policy Institute:

"Our state elected leaders should at a minimum suspend collection actions for outstanding fines, fees, and court debt during this health crisis. As the pandemic grows in our state, and unemployment numbers continue to rise New York must provide immediate economic relief to vulnerable and marginalized people and communities. Families of color are being disproportionally impacted as they are facing higher infection rates partly because they represent a large share of the "essential workers" in our state. The least we can do is to give these heroes who are putting their lives on the line every day a break so they don’t have to worry about being pulled over and arrested for not paying some overdue parking tickets."

 

With cash-strapped local governments facing unprecedented funding shortfalls caused by COVID-19, it is natural to assume they will turn to fines and fees as happened following the Great Recession. This could include raising existing fines or imposing new fines and fees. This will, once again, have the greatest impact on community members who have the least resources. FPI also cautions that the use of fines and fees is not a straightforward proposition as the economic expenses related to fines and fees are overlooked by local governments, including costs generated by the use of law enforcement, the court system, and the debt collection process.

 

The costs of fines and fees extend to the harm caused to the local community as it works to trap people in poverty. Punishing low-level crimes and violations, including traffic violations, with hefty fines and associated fees, has a ripple effect on people with the least resources. People with traffic debt suspensions can face an untenable choice: stop driving and lose their means of reliable transportation to and from their place of work, the grocery store, healthcare facilities, child care centers, and more, or continue to drive and risk criminal charges. Before the pandemic, public transit systems already suffered from a lack of funding, and transit deserts existed statewide. Now with the addition of social distancing requirements, the transportation issues already faced by people in low-income communities and by people who earn low wages have been compounded.

 

 Statement from Cara Long Corra, Senior Policy Analyst, Fiscal Policy Institute:

 "The ongoing public health and economic crisis caused by COVID-19 means we must critically examine our policies and practices and eliminate those that cause preventable harm. As we look to safely restart our economy, we must ensure that the people who have been most affected by this crisis do not continue to be economically punished by fines and fees. State and local government officials must weigh the real cost of this onerous system of punishment and take steps to dismantle it."

 

The economic and social harm caused by the levying of fines and fees is clear. It is past time for New York’s state and local governments to critically examine the issue of relying on fines and fees as a revenue source and to eliminate this dangerous practice.

 

The report recommends:

• Pass the Driver’s License Suspension Reform Act (S3548B/A7463B), which ends the practice of suspending driver’s licenses due to traffic debt and creates an affordable payment plan option.
• Eliminate the property tax cap or at the very least make it a true two percent cap. The cap should be set at two percent or the rate of inflation, whichever is higher, not whichever is lower as is current law.
• Remove the undemocratic supermajority provision for school budgets and allow exemptions for matters beyond the control of local governments, and school districts.
• Increase AIM funding so local governments do not rely on fine and fee revenue to fund budget shortfalls.
• Ensure that any fine and fee monies collected by the courts are clearly and transparently reported, along with the disposition of collected monies. This can be accomplished by enforcing existing statutory reporting requirements contained in the Criminal Procedure Law.
• The Comptroller should release an updated report on the Justice Court Fund. The last report is from 2010.
  
  The Fiscal Policy Institute is a nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all.