Penalty Assessment Fees Report

Investigating the relationship between stressed public finances and rising misdemeanor fines and penalties

By Reiss Becker, David Vasquez, Zane Zovak

 

BACKGROUND

California Policy Center analysts have documented the state’s collapsing public finances over the past few decades – not just the rising level of public debt, but the subsequent effects of crumbling infrastructure, slashed government services, and rising taxes. 

More recently we’ve noted the transformation of law-enforcement into state debt-collectors seeking a source of revenue for cash-strapped state and county governments. 

This is more significant than the unethical incentivizes quota systems encourage as they motivate police to issue a greater number of traffic tickets. What we’ve identified is more troubling: throughout California, local officials as well as legislators in Sacramento have been continuously  expanding the number of programs funded through traffic tickets with little public accountability or knowledge. 

As the table below illustrates, between 1980 (when the state allowed itself to add penalties to fines) and 2000, just two penalty assessments were added to traffic tickets. But in the first 10 years of the 2000s, eight penalty assessments were added. That rapid expansion tracks with the tsunami of pension hikes granted between 1999 and 2002. As California’s government unions continue to boost the costs associated with state and local employee pay and benefits, penalty assessments will likely become the default method of funding for various programs.

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 (source: California State Auditor Report 2017-126)

 

Though only the state and county governments may apply these fees, cities are getting into the act in a new and innovative way. The city of Huntington Beach, for instance, has made skateboarding a crime and has crafted new laws to prohibit “drinking in public” – even where “public” is the front yard of one’s home. Last year the city created a new role for an assistant city attorney. His sole job: to speed collections of these fines and to prosecute those who fail to pay.

“A significant number of misdemeanors go unprosecuted,” City Attorney Michael Gates explained, adding that deploying his new prosecutor will “add a lot of teeth to our laws. There will be a whole class of crimes that will now be prosecuted where the (county) DA may not have gotten to them. We will prosecute every one of them until conviction.”

This problem is everywhere in California. In Amador, a county in the Sierra Nevada Mountains just east of Sacramento, the superior court notes that its practice is to hit misdemeanor violators with a surcharge it calls a “penalty assessment” – an additional $26 “for every $10 of the base fine amount or portion thereof as set forth by the California State Legislature.” (If you doubt its authority to do so, the Amador court helpfully directs citizens to Penal Code 1464 and Government Codes 76000, 70372, 76104.6, 76104.7 and 76000.5.)

State lawmakers have their hands out, too. The state’s surcharges on local misdemeanors are remarkable for their randomness. There’s money for the DNA Identification Fund and the State General Fund. The state also gets money for its “Penalty Fund,” a “State Court Facilities Fund” and money for “Building/Maintenance for Courts.” Some of the penalty money pays for court security and a big chunk goes to court automation and general city funds. There’s even money for the Department of Motor Vehicles. The Amador court shows you how, through the magic of the state legislature, your $25 jaywalking ticket becomes a $193 fine. (A sample traffic citation is shown below at the end of the section).

The Orange County Superior Court follows the same formula, but adds bonus penalties for lawbreakers. In addition to the state menu, Orange County adds fees to fund Emergency Medical Air Transport, Emergency Medical Services, and a fee “to fund Night Court operations.” That, Orange County says, is how a $35 speeding ticket becomes a $238 fine.

We believe these fines will lead to increasing mistrust of government in general and of law-enforcement in particular; we are certain they have allowed government officials to largely ignore the real problem in California’s local governments: the high and always-rising cost of government employee pay and benefits, particular public-safety employees.

That problem began with the rise of government unions in the late 1970s. But it accelerated with the passage of SB 400 in 1999: the state law that drove the cost of post-employment benefits for public safety employees up 50%.

Driven by demands to fund these unsustainable benefits, state and local governments are now operating on an entirely new legal principal – the principal that government can, and without limitation, take citizens’ property (in the form of fines) or liberty (by jailing those who will not or cannot pay) for even misdemeanors and traffic citations. 

This dramatic expansion of government power pits the public against the police tasked with protecting them. It immiserates the already vulnerable. It undermines the economy, and by extension all California communities. It is a bipartisan problem: conservatives are as likely as liberal public officials to mask this cash and power grab as evidence they are tough on crime and to raise government revenue without raising taxes.

The U.S. Department of Justice found that a similar public-finance strategy contributed to the rioting and strained relations with law enforcement that followed the police shooting of Michael Brown in Ferguson on August 9, 2014. Rarely has it been so obvious that our own government has, in the words of the Declaration of Independence, “erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”

But in the past few years, we’ve also seen reasons for optimism. Raising misdemeanor fines and fees doesn’t necessarily translate into additional revenue because, as the old saying goes, you can’t squeeze blood from a turnip: where the poor are concerned, boosting the costs of a misdemeanor violations simply means adding additional debt to the ticketed party. Uncollected fines were key in prompting former-Gov. Jerry Brown to ban the suspension of driver’s licenses as a punitive measure. More recently, SB 144, or the Families of Fees Act, seeks to eliminate many of these egregious fines. 

But there’s work to be done at the local level, too. To local elected officials interested in rolling back these unconscionable fines, CPC has drafted a model ordinance and resolution to spread public awareness of penalty assessments and to bolster support for reform at the city and county level. 

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(source: LCCR 2015 report: Not Just a Ferguson Problem)

 

 

WHAT’S THE PROBLEM?

Using the police to raise revenue for state and local government generates multiple problems throughout our communities:

Distorts the role of the police and undermines public confidence 

Using penalties as a revenue source establishes the police force as a revenue-generating agency rather than as a peacekeeping force and creates an unhealthy relationship between officers and citizens. This phenomenon helped fuel tensions in Ferguson, Missouri – frustration that contributed to the death of Michael Brown – offering a grave warning to California of what consequences may arise out of this unethical practice. 

Questionable relationship between fees and violations

As is shown in the chart below, only four of the 17 penalty assessments are directly related to the crime; the remaining 13 fees are imposed as funding mechanisms rather than punishments for the crime and the cost they impose on society. Currently, a small fee is added to traffic infractions to support the Fish and Game Preservation Fund – helping fund a worthwhile department but with no connection to any of the misdemeanors committed. The DNA Identification Fund might reasonably expect reimbursement when a DNA test is conducted, but as it currently stands, it is added to all traffic tickets regardless of whether a DNA test was carried out. 

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(source: California State Auditor Report 2017-126)

 

Even our courts are incentivized to support these fees

As they currently exist, courts have a perverse incentive to maximize the total amount that can be charged for a fine or penalty assessment. The court that processes the violations for all traffic infractions also determines the civil assessment fee, a fee that goes directly into their court’s budget. The civil assessment fee is charged when violators fail to pay on time and is supposed to be calculated in relation to the individual’s ability to pay. Under state law, the court can charge as much as $300 for the civil assessment fee; because the fee returns directly to the courts, it’s inarguable that courts are incentivized to maximize fees.

Debtor’s Prison

A 2018 Federal Reserve survey found that 44% of Americans would struggle to cover a $400 emergency. These fines have left millions of California taxpayers trapped in an endless spiral of debt. Inability to pay promptly has led to additional late fees (typically labelled the “civil assessment fee”), trapping people in court dates, missed work, and additional childcare expenses. 

They are an unreliable source of public funding

Many of the government programs funded through penalty assessments depend heavily on those assessments. But revenue from traffic violations is highly variable. Multiple studies highlight the year-to-year rise and fall of penalty revenue, with some years jurisdictions showing a fluctuation of more than 40% in sequential years. 

 

 

OUR RECOMMENDATIONS

Most penalty assessments are dictated by state lawmakers in Sacramento. But local officials in cities and counties can act directly to limit penalties. 

Our model county ordinance (Appendix I) stipulates that the county will not levy optional penalty assessments for night court and the Maddy Emergency Medical Services Fund. Additionally, it calls for an end to penalty assessments for programs and funds unrelated to the infraction committed. 

Cities aren’t able to block state or county penalty assessment collections – that’s the province of state and county officials. But our model resolution for cities (Appendix II) allows local governments to express their opposition to penalty assessments. In bigger numbers, cities and counties may encourage state lawmakers to make necessary reforms to the system. 

 

 

COMMON CONCERNS ABOUT REFORM

If you can’t do the time . . . .

Some self-described conservatives have claimed that our concern for misdemeanor violators is misplaced – even on multiple occasions offering the old adage that “if you can’t do the time, don’t do the crime.” We note that there’s a more important adage, the one embodied in our Constitution’s 8th Amendment: “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” The government’s responsibility for maintaining the peace is not an unlimited grant of power.

Funded programs provide valuable services

The biggest objection to our proposal comes from county, city and other local officials who observe that these fees support important government programs. We recognize that often these programs provide a valuable service to the community. But programs with real value should easily count upon voluntary public support rather than coercion. In fact, public officials opposed to raising taxes – or even afraid of raising the possibility of raising taxes – rely on these assessments to appear tough on crime while avoiding the controversy around tax hikes. 

Moving away from penalty assessments and shifting the funding to a more public source allows for debate on the merits of these programs. Additionally, it ensures the burden of these programs is shared by all of the community that enjoys the benefits rather than disproportionately falling on traffic violators. 

Ultimately, we would like to see the elimination of penalty assessments but recognize that the transition will require time to find suitable alternatives for funding.

Rigid payment methods

Recognizing the growing debt from uncollected penalty fees (shown in table below), we propose that courts make more of an effort to consider and publicize alternative methods for payment of legitimate fines.

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(source: LAO 2016 report – Improving California’s Criminal Fine and Fee System)

 

APPENDIX I: 

Fairness in Fines Ordinance

WHEREAS § 42006(a) of the state vehicle code gives the right of the county to levy fines and penalties regarding night court in addition to the base fine excluding vehicle infractions.

WHEREAS § 76000.5(a) of the state penal code gives the right of the county board of supervisors to levy and additional two dollars for every ten dollars of the base fine for vehicle infractions.

WHEREAS the use of a base fine is to discourage illegal behavior and to seek justice. Such purpose of the base fine is not to provide necessary funding to government administrative agencies. 

WHEREAS the judicial council has levied extraneous fines beyond the purview of justice. 

WHEREAS administrative agencies have become dependent on the levying of such extraneous fines. 

 

Fairness in Fines Ordinance Requirements: A Moratorium On Present and Future Miscellaneous Charges and Fees on County, City and Municipality Citations

Purpose: The elimination of the use of regressive fees and assessments that disproportionately harm citizens as a means to raise revenue for government programs that should be funded through allocations from the municipality’s general fund. 

  1. Pursuant of this ordinance, the County of Merced shall adopt a fairness in fines practice beginning no later than eight weeks after passing this ordinance. 
    1. Beginning on that date, the county in question shall prohibit levying all penalties, fees, surcharges, and penalty assessments that are not directly and clearly related to the cost of enforcing the traffic violation. Current fines beyond those directly and clearly related to enforcement of the specific violation should no longer be applied to criminal and public offenses, including any and all violations of the vehicle code. 
    2. Any and all penalty assessment fees previously applicable but considered miscellaneous outside of the base penalty amount are hereby void. By eliminating additional fees, this ordinance will ensure the fine will serve as a penalty for the violation rather than a source of revenue to fund government operations. 
      1. 1.2.1.An extension period of 12 weeks may be requested before such additional fines are voided to allow the county board of supervisors sufficient time to identify alternative measures for any and all programs that will face a funding shortfall as a consequence of the prohibition of these penalties. The total time from the date of passage miscellaneous fees are void will not exceed 20 weeks. 
    3. Definitions: 
      1. 1.3.1.Base fine – A monetary sanction imposed in criminal cases as set forth in state law. The maximum base fine varies from violation to violation. 
      2. 1.3.2.Penalty or Surcharge – An amount added to the base fine and imposed as part of the monetary punishment for a crime. 
      3. 1.3.3.Fee or Assessment – An amount added to the base fine that is imposed for cost recovery purposes such as covering the cost for court operations in processing a case. Fees are intended to be used for specific purposes.  
    4. The following fees or charges should be considered exempt from this ordinance: 
      1. 1.4.1.Base fine – A monetary sanction imposed in criminal cases as set forth in state law. The maximum base fine varies from violation to violation. 
      2. 1.4.2.Penalty or Surcharge – An amount added to the base fine and imposed as part of the monetary punishment for a crime. 

 

APPENDIX II: 

Fairness in Fines Resolution

Whereas penalty assessments are being used as revenue collection strategy for counties and the state establishing the police force as a revenue collection agency rather than a peacekeeping force and creating an unhealthy dynamic between officer and citizen;

Whereas penalties are an ineffective revenue collection strategy because many citizens simply cannot afford the financial burden resulting in over $10 billion in unpaid debt;

Whereas civil assessment fees are supposed to be based on an individual’s ability to pay and offer alternatives such as community service for indigent citizens to repay their debt; and  

Whereas penalty assessments are frequently used to fund various state and county programs that often have little to no relationship to the violation; now, therefore, be it

Resolved, that the City of Torrance:

  1. urges the California State Legislature to amend §1464 of the State Penal Code to eliminate the state’s requirement for counties and cities to levy additional penalty assessments on violators of various traffic infractions; 
  2. encourages agencies receiving funds from penalty assessments to seek alternative sources of revenue to support their programs and eliminate reliance on highly unreliable penalty assessment funds;
  3. recommends redirecting civil assessment fee funds so that the courts aren’t directly receiving benefits from the cases they rule putting revenue incentives at odds with the requirement to consider a violator’s financial circumstances when assessing the civil assessment fee; and 
  4. advises state and counties to stop using revenue from penalty assessments to fund programs that aren’t clearly and directly related to the offense committed.