How the Municipal Court Money Machine Burdens City Residents

Across the country, cash-strapped towns and cities have turned to nuisance laws—fines and fees for minor traffic violations and violations of local housing codes—to balance their budgets without raising taxes. Many simply become municipal speed traps: A handful of small Colorado towns made more than 30 percent of their revenues from traffic tickets in 2015. Mountain View, Colorado, home to few more than 500 people, made $621,099 in citation revenue in 2013, roughly half of its annual budget.

“You shouldn’t be balancing your budget on your fines and fees revenues because that creates the incentive,” says House. “It’s easier to raise money by charging people in the court system who maybe are not voters. If you could tax everyone but yourself, you would probably vote for that, right?”

According to House, during initial research his team found budget reports on the city’s website connecting additional court dates to revenue collection (“the addition of more court dates this fiscal year has resulted in increased collections of municipal court fines”). He argues it’s clear from the city’s ledgers that the city derives a significant amount of its revenues from fines.

The Institute of Justice has previously filed cases against other municipalities for aggressive and abusive code enforcement, especially as it relates to housing code violations. An ongoing case in Charlestown, Indiana, alleges that the city, in league with a local real estate developer, Neace Ventures, was using code enforcement to drive low-income residents to sell their homes. The city has denied these claims, and its lawyer wasn’t available for comment.

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