Addicted to Fines: Small towns in much of the country are dangerously dependent on punitive fines and fees

This GOVERNING report presents the findings of a nationwide analysis of several jurisdictions’ fine and fee revenue rates and how much of this funding source supports general budgets. The research shows that hundreds of towns and cities generate a substantial share of their budgets from fines and fees and places with the highest rates of these costs are concentrated in certain parts of the U.S. The text also explores why local governments rely on this stream of revenue so heavily and how this over-reliance has played out in numerous cities based upon the data that was collected and the perspectives of local government officials.

You can read the full text of the report here.

Key findings

• Fines and forfeitures account for more than 10 percent of general fund revenues for nearly 600 jurisdictions and for more than 20 percent in 284 of those areas.
• Governments in which fines and fees fund a sizeable portion of the budget are most prevalent in southern states, especially in Arkansas, Georgia, Louisiana, Texas, Oklahoma and New York.
• Some jurisdictions in Georgia and Missouri exceed the revenue cap for fines and fees mandated by state legislation.
• Places that rely more on fines and fees for revenue had a history of economic decline, leading to weak tax bases. In jurisdictions where fines and fees made up more than 20 percent of the general fund revenue, the median household income was $39,594.
• The author’s research suggests that much of a jurisdiction’s fine and fee revenue is not being collected from local residents, but instead from people who do not reside in the town or city.