For many individuals and households, a $200 traffic ticket can devastate savings and finances. The Federal Reserve’s Report on the Economic Well-Being of U.S. Households finds that 40% of Americans wouldn’t be able to pull together $400 in cash without borrowing money or selling possessions, highlighting the impact fines and fees can have on financial security.
Faced with the need to raise revenue, state, county, and municipal governments are increasingly turning to government fines and fees to make up budget shortfalls. The practice of imposing fines, fees, court costs, and other debts onto residents has created a “two-tiered justice system” that disproportionately impacts low-income communities and communities of color – specifically African-American communities. Studies show that cities and communities with large African-American populations receive significantly more revenue from fines and exhibit harsher collection tactics than those without similar demographics.
In Alabama, thousands are trying to balance the costs of fines with other expenses and needs. A survey by the Alabama Appleseed Center for Law and Justice found that for those with outstanding court debts:
- More than 80% cut back on basic needs like rent, food, medical bills, car payments, and child support just to pay down their debt
- Almost 40% committed a crime to pay off their debt
- 44% used payday or title loans to pay off their debt
- Almost 50% shared that they thought they would never be able to pay off their debt
The penalties of an offense vary dramatically from location to location. In some jurisdictions, the consequence of not being able to pay a court fine or fee can be additional late fees – in other jurisdictions, jail time.
What is unfolding in Alabama is not unique to the state. Fines and fees are distressing the financial lives of families across the country. In North Carolina, over one million people have suspended drivers licenses for either a failure to pay traffic fines and fees or failure to appear in court. Forty-three states use driver’s licenses suspensions as punishment for failure to pay.
Suspending a driver’s license can further exacerbate people’s inability to pay. In rural communities, driving might be the only means to get to work and generate the income required to repay debts. When faced with the choice of driving on a suspended license or losing one’s job, how do we blame those who do drive? Often, a suspended driver’s license may not deter people from driving due to the importance of work to family income. However, driving without a license puts many at risk for further punishment. In NC, for example, driving without a license is a Class 3 misdemeanor.
A recent investigation by the U.S. Department of Justice’s Civil Rights Division found that the conditions of men’s prisons in Alabama is in violation of the 8th Amendment of the Constitution, which protects people from excessive bail, excessive fines, and cruel and unusual punishment. The investigation has created state-wide urgency around the need to develop systemic solutions to instigate comprehensive criminal justice reform. Local stakeholders – government officials, employers, community leaders – are starting to pay attention and designing solutions to end this negative cycle. Restructuring court fines and fees is a necessary first step.
In October 2019, Alabama Appleseed, in partnership with the Aspen Institute Financial Security Program (Aspen FSP), convened a cross-sector group of local leaders to discuss and identify practical, promising solutions. Experts representing workforce development, district attorney’s offices, municipal and state government, and the judiciary, workshopped strategies for implementing local and state-wide solutions centered on three main goals: curtailing driver’s license suspensions, streamlining municipal court practices and policies, and strengthening data collection.
Alabama Appleseed and Aspen FSP have compiled a list of key recommendations to reduce the negative impacts of fines and fees on households and communities across the country.
Reimagine state funding
In Alabama, fines and fees serve as a hidden tax disproportionately borne by poor people and people of color to supplement the state’s low tax rates. The money collected is largely funneled into the state’s General Fund, government agencies, county and municipal funds, and used to finance pet projects. States should identify more equitable ways to fund essential functions and stop forcing the courts to serve as revenue collectors.
Share data between jurisdictions
Many Alabamians owe fines and fees in multiple jurisdictions, but when judges are assessing ability to pay and setting payment plans, they typically only know what the individual owes in their own court. As a result, some people are on payment plans of $25 or $50 in multiple jurisdictions. Better data collection and information-sharing between jurisdictions could prevent this type of unintentional burden and help judges more realistically assess the circumstances of the people who come before them. People are more likely to keep up with payment plans when those plans are reasonable, so better coordination may improve compliance as well.
Evaluate the broad impact on community
Individuals are not the only ones to suffer from burdensome court debt: the state pays too. When people lose their driver’s licenses, they can’t work. In an era of record low unemployment and a tight labor market, that means jobs cannot be filled despite the existence of eager workers. Everyone benefits from common-sense reforms like ending the practice of suspending driver’s licenses for unpaid debt, and employers, as much as anyone, should be part of the conversation about how debt reduction can improve prosperity.
Include law enforcement in policy conversations
No aspiring police officer dreams of taking someone into custody because the person fell behind on their traffic tickets. People become law enforcement agents because they care about their communities and want to keep them safe—and since they are the ones in communities, inviting law enforcement into conversations about policy reform can improve public safety outcomes for everyone.
Learn about what’s worked in other states
Innovation is happening. In North Carolina, the Administrative Office of Courts has been at the forefront of efforts to end the practice of forcing judges to be debt collectors. In California, the city of San Francisco eliminated local “user” fees that charged individuals for being processed through the justice system. Although not every policy can be adopted without considering local differences, smart solutions come from everywhere.
Alabama Appleseed and Aspen FSP are committed to learning more about how to best develop and implement solutions that address the harmful impacts of fines and fees. As our organizations engage in this effort, we will continue to broadcast the best and intend to continue to share our findings. Solving this issue requires cross-sector collaboration and learning. We hope the takeaways outlined above provide a roadmap for those beginning to do this work and look forward to engaging with all dedicated to ensuring the lives of individuals and families are not derailed by government fines and fees.
Aspen FSP’s work on fines and fees is an outcome of Aspen EPIC’s two-year deep dive on consumer debt. To learn more about our consumer debt work, visit aspenepic.org.
Aspen FSP’s work on fines and fees is made possible with support from the Annie E. Casey Foundation – learn more here.
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