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March 22, 2019

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Municipal fees: The new debtors’ prison

Following the 2008 financial crisis, municipalities in 47 states increased their civil and criminal fines and fees in an effort to alleviate their dire financial situations.

These penalties relate to everything from “dwarf-tossing” to sharing Netflix passwords. Years later, in the midst of a robust period of economic recovery, the majority of those increases remain on the books. Yet many of them are not only unnecessary but also needlessly increase the number of people incarcerated, since the punishment for unpaid fines and fees can include jail time. For that reason, lawmakers should revise them.

The advent of steep and occasionally nonsensical fines and fees stemmed from the fact that local governments need funding to maintain law and order. How they elect to fund these efforts varies widely.

Raising revenue via taxes is perhaps the most direct and equitable manner of paying for law enforcement, but it is also a structurally challenging approach. That’s because many states and municipalities require a public referendum or other procedural hurdles to increase taxes. For instance, last year, Florida passed a law requiring a two-thirds’ “supermajority” of the legislature to vote to increase taxes.

Increasing fines and fees faces no such challenge. As a result, raising fines and fees is simply a more manageable lift than raising taxes for local governments faced with a cash crunch.

Imposing higher fines and fees may be less costly as a structural matter, but doing so is hardly cost-free. Dependence on fine- and fee-derived revenue creates perverse law enforcement incentives — for instance, some localities have increased the number of potential infractions and lowered the degree of culpability necessary to be subject to these infractions in order to increase their fine- and fee-derived revenue. This dependence also compromises the sustainability of local budgets by tethering enforcement success to municipal fiscal failure.

Perhaps most troublingly, this fundraising method also disproportionately harms our communities’ most vulnerable residents. Laws imposing arbitrary fines and fees have the unintended consequence of disparately affecting low-income individuals because, in many cases, these people are forced to choose between paying court-imposed fees or paying for necessities like doctor’s bills and car payments. As a result, many low-income individuals simply cannot pay the fees and fines, which leads to more fine-based penalties. Eventually, many end up in jail because they cannot afford the mounting charges.

Sadly, the people most likely to become entangled with the justice system are the poor and the marginalized. By creating a system that depends on an unending monetary flow upward — often from the poorest citizens — municipal fines and fees are effectively criminalizing poverty.

To be sure, the United States has come a long way from the British model of debtors’ prisons, in which residents would literally be locked away based on their inability to discharge their debts. But penalties resulting from the inability to pay local fines and fees often have effects that are indistinguishable from those of debtors’ prisons — notably compounding fines, suspension of driver’s licenses and, in at least eight states, jail time. In fact, in Benton County, Wash., 25 percent of people jailed per day on misdemeanor charges are incarcerated for nonpayment of court fines and fees.

Localities have a responsibility to implement a workable solution to these issues for both citizens and cities. Since fines and fees are being used in lieu of taxes, any proposal to levy or increase them should be required to meet the same voting threshold as tax increases. In many states, this tax-increase threshold is a supermajority vote through public referenda like ballot initiatives or passage of local legislation.

Second, as a budgetary matter, municipalities that have become reliant on fines and fees should begin taking to unwind their dependency — a ‘best practice’ identified in a Department of Justice Dear Colleague Letter on this topic. That process should start with amending or eliminating needless and onerous ordinances. By way of example, the San Antonio Municipal Court system no longer requires people convicted of traffic violations to pay off fines by serving time in jail.

Third, municipalities should increase their reliance on police diversion, which provides officers with alternative options to arrests. This strategy limits the number of people interacting with the costliest parts of the justice system and, as a result, decreases the number who are negatively affected by fines and fees.

The problem of fines and fees may be real, but the solutions are workable. It is time for states and municipalities to take steps to remove or revise laws that criminalize poverty.

Kristen Nyman is a government affairs associate at the R Street Institute, and Jesse Kelley is a government affairs specialist and criminal justice policy analyst at R Street. They wrote this for