Fines and fees are widely used by state and local governments to achieve a host of disparate goals – to deter crime, to recover some of the costs of administering the legal system and, in some cases, simply to raise revenue when taxpayers cannot or will not cover the costs of government services. The fines and fees ecosystem includes everything from parking tickets to penalties for driving with expired auto registrations and fees for supervision of parolees imposed on the parolees themselves.

What may surprise, though, is the reality that the ways these penalties are structured and enforced can have a sharp and disproportionate impact on the well-being of families living near the financial edge, widening existing income inequalities and exacerbating racial inequalities. They also happen to be inefficient sources of revenue  – inefficient to collect and inefficient in their impact on individuals’ lives – especially compared to income, property or sales taxes.

Some fair-minded people are nonetheless inclined to defend the you-play-you-pay approach. After all, the reasoning goes, those who violate the law ought to pay (literally as well as figuratively) for their crimes. If the prospect of a lighter wallet serves as a deterrent to bad behavior, so much the better.

What’s missing from this argument, however, is the real-world problem that fines and fees – not to mention the debts incurred to pay them – are scattershot punishments whose impact spreads well beyond the responsible individuals. Gilding this poisonous lily, research suggests that fines and fees can even induce offenses instead of deterring them.

This message seems to be getting through. Many communities (in red states as well as blue) have begun initiatives to find alternatives to financial penalties, or at least to better target them to minimize collateral damage.

How Common are Fines and Fees?

According to a national survey conducted by the Urban Institute, about 17 percent of nonelderly adults reported that their households were fined or charged a fee in 2023, with the bulk coming from traffic and parking tickets. Court or incarceration-related penalties affected 3 percent – though about half of adults thereby burdened also reported receiving traffic or parking tickets, suggesting that penalties have a way of burying the unwary under financial obligations.

Some 85 percent of adults who incurred fines and fees in 2023 reported being charged less than $500  – not life-changing for most. However, the sum varied greatly by type of violation. While those with traffic or parking tickets generally came off fairly lightly, a majority of those incurring court or incarceration-related fines and fees, and presumably those least likely to have deep pockets, were charged well over $500.

These penalties often hang over families’ heads for years. As of December 2023, some six percent of all adults owed money for unpaid fines and fees. And, of those with outstanding balances, one in four owed $1,000 or more.

All in all, nearly one in five non-elderly adults reported their households were either fined in 2023 or owed money for unpaid fines and fees from earlier years.

Who's Most at Risk?

The Urban Institute’s analysis found that in 2023, adults across the income spectrum were roughly equally likely to be hit with fines. However, families with incomes below 200 percent of the federal poverty level were significantly more likely to be burdened with court or incarceration-related costs. What’s more, the burdens varied systematically by race and ethnicity.

Some 22 percent of Hispanic adults and 20 percent of Black adults reported being charged or owing fines and fees, compared with 15 percent of white adults. These differences were statistically significant for parking/ traffic infractions as well as for any court and incarceration-related charges. Even among just those with family incomes below 200 percent of the poverty level, Hispanic and Black adults reported fines and fees at higher rates (21 percent and 20 percent, respectively) than white adults (14 percent).

There is, of course, a long, shameful history of racial discrimination in the U.S. in the implementation of the criminal justice system. Indeed, for most of the post-Civil War era, Southern states used fines and fees to target Black communities with the goal of enforcing discrimination. For example, vagrancy laws were widely used to enmesh Black families, with the nonpayment of fines leading to imprisonment or “hiring out” as forced labor. More generally – and to this day – cities with higher proportions of Black residents have relied more than average on revenues from financial penalties than those with fewer Black residents.

What Happens When People Don't Pay?

Our analysis found that among those with unpaid court or incarceration-related fines and fees, over a quarter were hit with additional fines and fees, while 24 percent reported having their driver’s licenses suspended. That was presumably just a bump in the road for most of those affected  – a setback managed by withdrawal of savings, borrowing from family and friends, or delaying payment of bills. But for large numbers lacking financial security, it meant serious hardship – for example, delays in visiting doctors, and in parts of the country with poor public transit, the loss of jobs because they couldn’t make it to work. Or worse: 19 percent with unpaid court or incarceration-related fines or fees ended up with time in jail.

Note, moreover, that the burden affects whole families because their finances are comingled. Those owing fines and fees reported serious hardships like problems paying the rent at higher rates than those with no such financial burdens.

How Much Money is at Stake?

All told, states and localities collected nearly $14 billion from criminal legal fines, fees and forfeitures in fiscal year 2022. Real money to be sure. But as a share of all revenues the number is modest – only 0.3 percent of state and local general revenue in 2022.

In terms of dollars collected, California ($966 million), North Carolina ($327 million) and New York ($326 million) raised the most in state-level fines and fees in 2022. But proportion matters here: these are all big states with big governments and large budgets. Note, too, that California has eliminated a variety of criminal-law fees since 2020, which will likely lower revenues in coming years.

New York City ($1.2 billion) was the only jurisdiction nationwide to raise over $1 billion from fines and fees in 2022; Chicago ($309 million) and the District of Columbia ($169 million) followed. Again, though, these sums are modest compared to total revenues or outlays. At the extreme, interestingly, are small and medium-sized places. Consider Anacoco, Louisiana, and Linndale, Ohio, villages with less than 1,000 residents. They each raised over 90 percent of their budgets from fines and fees in 2022. Indeed, both hamlets finance their governments with speed traps – a common phenomenon before the interstates diverted most intercity travel from local roads.

Undermining Good Governance

Thus far, I’ve been a bit casual in lumping together fines and fees. Fines are at least in theory justified as means to penalize and deter unwanted behavior, whereas fees are meant to raise revenues to cover government costs or to avoid the necessity of tax increases. Fees, of course, are not unique to the criminal legal system: states and localities collect billions in bridge and highway tolls, for example. However, the dynamic is markedly different with the criminal legal system – for one thing, because the people obligated to pay often do not have any alternatives and are often those least able to pay.

Today, defendants are charged fees for a variety of services that were once covered by general tax revenues. This includes pretrial jail fees, incarceration room and board, phone-call costs, drug testing fees and jury fees. While rationalized as fees for service, revenues also go toward government services unrelated to the justice system, such as road maintenance and health care. In any case, those who pay may be those who benefit, but not exclusively. A well-functioning justice system exists as a service for the benefit of all residents, not just as a service for processing alleged criminals. Take, for instance, South Dakota’s $117.50 speeding ticket issued on interstate highways. The fine – only $39 – goes to the school district in the county where the violation occurs. The balance goes toward law enforcement training, court automation, telecommunicator training, court appointed attorneys and public defenders, victim’s compensation, court-appointed special advocates, even a fund for neglected and abused children.

South Dakota is not an outlier. We found that in 43 states at least a portion of speeding-ticket fines go toward law enforcement and court programs, creating an inherent conflict of interest for policing and sentencing practices.

There’s a separate but related issue here, too. Public defenders and police training programs, which exist to ensure that the criminal legal system is effectively and fairly run, ought not to have to rely on speeding tickets to fund their day-to-day operations.

This drift toward reliance on fines and fees for funding criminal justice is understandable in purely practical terms. It is partly driven by fiscal constraints placed upon local governments as part of broader anti-tax movements. Many states constitutionally, moreover, bar localities from adding or expanding local taxes, or force them to gain permission from legislators who have little stake in fair, efficient local government. These constraints shorten the menu of revenue options and increase the attraction of fee-based sources.

Revenue-motivated policing and sentencing practices can, in turn, undermine public trust and the perceived legitimacy of the criminal legal system. For example, after Proposition 2½ in Massachusetts placed ceilings on municipal property taxes, localities issued traffic citations more aggressively – especially to out-of-town drivers. More generally, there is solid evidence that arrest rates of Black and Hispanic people for drug-related violations (including DUIs) have increased during times of local fiscal distress. Arguably most ominous, increases were larger in places where law enforcement departments were allowed to retain funds from asset forfeitures.

The widely publicized racial discrimination investigation of governance in Ferguson, Missouri, by the Department of Justice found Third Quarter 2025 67 extensive evidence that the city was using fines for dubious purposes. For example, the city’s finance director left a paper trail asking police to increase ticket writing and municipal code enforcement in order to make up for shortfalls in expected sales taxes. The investigation concluded that Ferguson’s public actions compromised public safety and violated federal laws by imposing disparate harms upon its Black residents.

Harm Reduction

It’s not difficult to make the case that dependence on fines and fees in the enforcement of criminal justice is highly problematic, eroding public trust in government and adding to the burdens of income inequality and racial discrimination that stain American society. But it has not been easy to find alternatives that are politically palatable.

Certainly, a good first step is to make the public aware of the costs of this dependence on both individuals and society as a whole. Acknowledging the myriad ways in which fines and fees erode the well-being of families who encounter the criminal legal system, how much money is at stake and what this means for good governance will help identify opportunities for reform.

But awareness is only a preface to change. Localities need to reform traffic enforcement practices, limiting accepted justifications for traffic stops, ending the counterproductive practice of driver’s license suspensions as a means of spurring payment of fines or fees, and studying the fairness of deploying speed cameras where the goal is revenue rather than safety.

They may also need to eliminate administrative fees levied by courts, which significantly increase the costs of criminal legal penalties. More broadly, we need to fund criminal legal systems through general tax revenue instead of earmarked fines and fees and confiscations of property, putting in firewalls between revenue generation and the administration of public safety.

It would clearly also make sense to routinely offer alternatives to fines and fees other than jail, such as community service or paid employment. By the same token, when fines are imposed, they should be linked to ability to pay. One rule of thumb might be to calculate fines in terms of how much of a week’s wage they represent.

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In 2023, the Department of Justice issued a “Dear Colleague” letter to all state and local courts and government agencies addressing various legal and policy concerns, as well as potential solutions to address fines and fees. In part, they were motivated by what they learned in their in-depth investigations into Ferguson, Missouri, and, more recently, Lexington, Mississippi.

But DOJ leadership has changed radically since then. It remains to be seen whether the Trump administration supports initiatives to erase the deeply ingrained stain of money-driven local justice.