Cato’s Project on Poverty and Inequality in California: Final Report

California has the largest economy of any state and a gross domestic product of almost $3 trillion. However, before the pandemic, 17.2 percent of the state population lived below the poverty level, the highest poverty rate in the nation. The Covid 19 pandemic has devastated California’s economy, and low-income and minority Californians have felt most of the impact. This report makes policy recommendations to reform laws, policies, and regulations that are barriers to economic participation concerning housing and homelessness, education, welfare, and the criminal justice system, including a call to curtail the use of fines and fees as a punishment.

You can read the full text here.

Key Findings:

  • California collected $1.4 billion in fines and fees from the criminal justice system in FY 2018-2019.
  • The base fine for adult felonies ranges from $300 to $10,000, $150 to $1,000 for misdemeanors, and $35 to $95 for traffic offenses. 
  • Administrative costs are high and inefficient; Los Angeles County spent $3.9 million to collect $3.4 million in fees.
  • The collection of criminal debt can add 40 percent or more in interest and processing fees.
  • In 2019, 4.2 million Californians had suspended driver’s licenses because they could not afford fines or fees or had not appeared for a citation.
  • Driving-related enforcement has opened the door to racial profiling and pretextual stops, particularly harming Californians who are poor.
  • San Francisco and the California Highway Patrol have curbed their pretextual stops after research suggests that they exacerbated racial disparities.


  • Decriminalize traffic infractions.
  • Curtail the use of fines and fees as punishment.
Michael D. Tanner
The Cato Institute