One of the biggest challenges facing American democracy is the decline of trust in public institutions. Polls suggest that local governments enjoy higher levels of trust than, say, the federal government, but such was not always the case. During the 1950s the federal government enjoyed relatively high levels of trust. Today those trust levels are alarmingly low.
The Government Finance Officers Association (GFOA) named “trust” as one of the five pillars of its Foundation for Thriving Communities, an e-book it published last year. (The framework for the e-book evolved out of a joint research effort by GFOA, the National Civic League, the USC Sol Price School of Public Policy and the University of San Francisco.)
More recently the association published a resource aimed at eliminating one obstacle to public trust—the unfair imposition of fees, fines and asset forfeitures. The name of the publication, Financial Policies for Imposed Fees, Fines and Asset Forfeitures: Basis for Building Trust with the Public and Fair Treatment of All Citizens, may sound a little wonky, but consequences of unfair or poorly designed policies can be grave.
To understand the stakes, it might help to go back to the year 2014 when civil unrest broke out in Ferguson, Missouri. In the aftermath of a fatal police shooting of an unarmed Black youth, a report from the U.S. Department of Justice found that local police and courts were using traffic stops and court fines as a revenue generator for the city. The report also suggested that Black residents were more likely to be fined.
The situation in Ferguson was not an isolated case. Starved for revenues after the 2008 financial crisis, many cities were using fines as an important source of revenues. And the lion’s share of these fines often fell on the members of these communities who could least afford them, an injustice that often led to distrust and resentment of police by residents, not to mention unnecessary and potentially dangerous interactions with the law.
GFOA has developed a set of criteria to help local government officials set equitable and practical policies one how and when to impose these fines and fees. For instance, the report warns against “cross-subsidization,” the practice of using revenue gained from one service fee to subsidize another service. For example, late fees for library books should not be used to subsidize the paving of streets.
Fines can be an effective way of discouraging criminal acts or destructive behavior, but governments should be careful in how they assess them. For instance, fining someone with little income can be both harmful to the individual and counterproductive. Serving a jail sentence would obviously make it more difficult to pay the fine.
In some cases, the cost of enforcing a fine or collecting a fee may be greater than the revenue produced. In that case, enforcement is also counterproductive.
Worst of all, is enforcing a fine or penalty in a way that is inequitable or unfair. This leads to distrust, resentment and poor relationships between residents and local government agencies.
“Imposed fees, fines, and asset forfeitures are important tools for local government,” writes the report’s author, GFOA Senior Manager of Research Shayne Kavanagh. “However, like any tool, they can be misused. When these revenue sources are misused, they can reduce citizen’s trust in local government, seriously harm the lives of disadvantaged citizens, and worsen the problems that public services are intended to solve. A financial policy provides boundaries on imposed fees, fines, and asset forfeitures to make sure these tools are used properly.”
