A Case Study of Municipal Taxation by Citation

Abstract

This study examines taxation by citation—local governments using code enforcement and the justice system to raise revenue rather than solely to advance public health and safety. It does so through a detailed case study of Morrow, Riverdale, and Clarkston, three Georgia cities with a history of prolific revenue generation through fines and fees from traffic and other ordinance enforcement. Results suggest taxation by citation is a function of the perceived need for revenue and the ability to realize it through code enforcement. Moreover, the phenomenon may be a matter of systemic incentives. City leaders need not be motivated by simple rapaciousness. They may see fines and fees revenue as the answer to their cities’ problems. Once in effect, the mechanisms necessary for taxation by citation—such as highly efficient court procedures—may stick, becoming business as usual.

Keywords

fines and fees taxation by citation municipal courts code enforcement traffic citations

Introduction

This article presents a case study of three cities that have historically generated substantial revenues from fines and fees associated with city ordinances. Cities have long generated revenue through citations and traffic tickets, but widespread awareness about the extent to which municipalities depend on such revenue is rather recent. Contemporary pundits and policy makers alike denounce the practice, so much so that it now has its own trope: “taxation by citation” (Bailey, 2012; Dieterle, 2017; Foldvary, 2015; Mitchell, 2015).

Critical attention and widespread awareness began after the 2014 events in Ferguson, Missouri. Michael Brown’s shooting and the subsequent protests compelled the U.S. Department of Justice (DOJ) to investigate (U.S. DOJ, 2015). The DOJ found the city’s uncompromising code enforcement to raise revenue created long-simmering tensions between its citizens and law enforcement. Revenue generation through fines and fees long preceded 2014, as city leaders pressed the politically appointed police chief and municipal court judge to help meet growing budget pressures through citation revenue.

Ferguson garnered nationwide attention for its fines and fees revenue generation, but it was a mere 18th among a list of U.S. cities prolific in taxation by citation. Cities all over the country—in Georgia, Illinois, Maryland, Missouri, New York, Tennessee, and Utah—ranked above Ferguson, and cities in still other states were among the top 25 (Kopf, 2016). And, as evidenced by a 2017 report by the U.S. Commission on Civil Rights (2017), concern is now growing nationally that such revenue-generating behavior may be more widespread. Indeed, drawing on a broad review of relevant literature, Graham and Makowsky (2020) argue municipal fines and fees behavior is part of a larger framework of revenue generation through the criminal justice system that has become a key component of local government budgets across the United States.

Literature Background

Taxation by citation is when municipalities use their code enforcement powers to raise revenue from fines and fees in excess of what they would collect were they issuing citations solely to protect and advance public safety (Dieterle, 2017; Foldvary, 2015). One indicator of taxation by citation may be large proportions of municipal revenue generated by fines and fees, although there is no established definition of what proportion is too large. Early working definitions suggest that a threshold of 10% of a city’s revenue is a reasonable indicator (Maciag, 2019; Simmons, 2014).

Critics identify at least three legal and social concerns over taxation by citation: (a) conflicts of interest, (b) distortion of law enforcement priorities, and (c) violation of poor people’s rights. According to detractors, conflicts of interest are created when municipal courts that process citations are funded by their cities. Multiple court decisions have held judges should not have a financial or other personal interest in cases they decide, and municipalities and law enforcement should not have a financial interest in obtaining convictions (Marshall v. Jerrico, Inc., 1980; Tumey v. Ohio, 1927; Ward v. Village of Monroeville, 1972).

Second, critics argue taxation by citation diverts law enforcement resources away from protecting and advancing public safety. According to critics, incidental benefit to a city budget from fines and fees poses no problem, but there is a problem when creating or enforcing ordinances is motived primarily by revenue generation (Ginkowski, 2018). Multiple court decisions have found the same (State ex rel. Pedersen v. Blessinger, 1972; Village of Sister Bay v. Hockers, 1982). Nevertheless, evidence suggests cities continue to pursue fines and fees primarily for this purpose (Karins, 2018; Mitchell, 2018, 2019; U.S. DOJ, 2015). Moreover, prior research finds the fines and fees revenue of many cities exceeds levels associated with the enforcement of traffic codes merely for the purpose of public safety (Hummel, 2015; Makowsky & Stratmann, 2009).

Third, critics charge that taxation by citation penalizes poverty, thereby violating poor people’s rights. This occurs when municipal courts incarcerate poor people who cannot pay fines and fees without exploring alternative sentences, which can include installment payments or community service. Justice Sandra Day O’Connor called such actions “fundamentally unfair” (Bearden v. Georgia, 1983). Indeed, since the 1970s, the U.S. Supreme Court has ruled it unconstitutional to jail people who cannot pay fines and fees (Bearden v. Georgia, 1983; Tate v. Short, 1971; Williams v. Illinois, 1970).

Despite these problems, little is known beyond just a few cities—such as Ferguson—about the types of municipalities that generate substantial revenues through fines and fees. Yet, as Robinson (2017) noted, “there are almost certainly many more cities and towns like Ferguson dependent upon this most untraditional non-tax revenue source” (p. 38). But what is the profile of such cities? What processes and structures do cities use to generate revenue? To what extent is health and safety served by the code enforcement that generates fines and fees revenue?

To begin to answer these and other questions, we completed case studies of three Atlanta area cities that, like Ferguson, have historically relied on fines and fees as an important source of revenue. The cities include Morrow, Riverdale, and Clarkston, Georgia. In 2012, the three cities produced between 18.7% and 24.4% of their revenue from fines and fees (Kopf, 2016), putting them among the top 10 cities nationally for fines and fees revenue generation. This suggests a revenue motivation over protecting public safety in code enforcement.

Method

Consistent with case study research methods (Stake, 1995; Yin, 1989), the analyses drew upon numerous and diverse sources, including quantitative public records, photo and video records, city council meeting minutes, and direct observation of the cities and their courts.

Public Data

Public data fell into two broad categories: data generated by the sample cities, though not necessarily obtained directly from the cities, and census data. City-generated data included city finances, citations, court caseloads, and probations.

City finances

These data—procured from city websites or through public records requests—included adopted budgets spanning fiscal years 2012 to 2017. We also used annual finance reports called Report of Local Government Finances, which cities submit to the state (Georgia Department of Community Affairs, n.d.). We collected all these reports from 2012 to 2016 (the latest year consistently available at the time of data collection). Any missing data were imputed from Comprehensive Annual Financial Reports (Carl Vinson Institute of Government, n.d.). With these data, we calculated fines and fees revenue as a percentage of general revenue and, to the extent possible, compared results with other Georgia cities (n = 350) of comparable size (population between 5,310 and 17,514).

Citations

We made public records requests to obtain citations data from the cities. The only year for which complete and reliable data were available for all three cities was 2017. We first coded violations into three broad types—traffic, property, and conduct. Traffic citations were coded as nonspeeding and speeding.

Property citation subtypes were health and safety, state of disrepair, and other. This enabled us to determine the extent to which violations threatened health and safety. Health and safety violations based on city building regulations or property maintenance codes included things such as unsafe structural integrity, plumbing problems, mold, missing smoke alarms, and improper emergency egress. State of disrepair included violations that did not significantly threaten health and safety but instead related to the cleanliness of property, including fencing issues, not maintaining “neighborhood standards,” corrosion of a building exterior, and tall grass. Other captured anything related to property maintenance not encompassed in categories above. This included sign code violations, repairing a car in a driveway, and storing personal property outdoors.

Conduct citations fell into three subtypes: socially maladaptive behavior, trivial infractions, and other. After coding, number of violations were tallied per type in simple frequencies and per capita. City citation data also included fine amount per citation, which we used to calculate average fines per citation per violation type and total fines.

Court caseloads

At the time of data collection, court caseload data were publicly available through the Georgia Administrative Office of the Courts (AOC). We gathered data covering 2012 to 2016. For the municipal court system, these reports contained the number of cases filed, disposed (i.e., completed), and open by type of case (city ordinance, drugs, traffic, etc.). We calculated a clearance rate for the sample cities and a comparison group, which included cities of similar size (defined above) with municipal courts. The sample size of the comparison group ranged from 52 to 73, depending on the year (2016 n = 61, 2015 n = 70, 2014 n = 73, 2013 n = 52, 2012 n = 59). The comparison group averaged 63 across the 5 years. Sizes differed by year due to data availability and because not all Georgia cities operate their own courts.

Probations

Probation data came from the Georgia Department of Community Supervision (DCS) and the AOC via public records requests. Because oversight of probations transferred from the AOC to the DCS in 2015 and changes were made in the data collected, our comparisons were limited to particular years and data. Probation finance data spanned 2012 to 2016 (except for Morrow in 2015 and Riverdale in 2013); numbers of probationers per city spanned the second quarter of 2015 to the fourth quarter of 2017; and fees represented 2016 and 2017. We determined the numbers of probationers per city and compared those with statewide averages. Probation fees were also compared with statewide averages. For each city, we determined fines generated through probation and calculated this as a percentage of all fines and fees revenue.

Photo and Video Records

Photo records were of two types in this study. The first were photographs of cited properties taken by code enforcement officers and archived by the cities (Riverdale = 3,400 photos for 2017 and 2018, Clarkston = 44 usable photos for May 2016 and December 2017, Morrow photos unusable). We obtained these through public records requests. The photos were used to examine whether violations threatened public health and safety. We coded the photo using a 5-point violation severity scale ranging from 1 = completely aesthetic to 5 = significant health/safety risk.

The second type of photos we gathered by photographing residential neighborhoods during fieldwork that occurred from August 5 to 10, 2018, in Clarkston, and July 31 to August 8, 2018, in Morrow and Riverdale. Effectively, we mimicked a code enforcement officer’s work by directly observing and photographing properties and looking for apparent code violations. We then scored those “violations” using the 5-point scale.

Similarly, we drove throughout the cities recording traffic to analyze traffic violations. We cut the recordings into 5-min segments and coded them for traffic violations (Morrow, n = 26 recordings; Riverdale, n = 26 recordings; Clarkston, n = 19 recordings). To capture a diversity of traffic patterns, we shot videos at different times of the day, on different days of the week, and on different types of roads (e.g., highways, major and minor city roads). With this exercise, we mimicked the work of police officers, although we did not measure speeding violations. We coded the traffic data using a risk scale, where 1 = no safety risk, 5 = significant safety risk.

Court Observations

During fieldwork in August 2018, we observed full court sessions in the three cities (Morrow and Riverdale = four sessions, including arraignments and bench trials; Clarkston = two sessions of arraignments). Number of cases per city included 91 in Morrow, 36 in Riverdale, and 37 in Clarkston. To assist with data collection, we created an observation instrument that enabled us to measure constructs such as to what extent defendants understood proceedings, standardization of proceedings, pace of proceedings, whether defendants were represented by attorneys, whether ability-to-pay hearings were held, case outcomes, and defendant demographics.

Results

We begin the results by describing the three sample cities. These descriptions combine observations made during our summer 2018 fieldwork and details from other sources. This is followed by a presentation and discussion of the findings for the data described above.

Introducing the Sample Cities

Morrow

Morrow is a growing municipality of about 7,500 residents located just south of Atlanta. In some ways, Morrow seems prosperous, with numerous and busy restaurants, stores, gas stations, and hotels. The city’s north side is home to Clayton State University and the Georgia Archives, whereas busy warehouses, distribution centers, and auto dealerships occupy the south side. Morrow’s residential neighborhoods are predominantly populated with ranch-style houses. Small pockets of homes in neighborhoods throughout the city show some disrepair; however, most homes appear well maintained and are surrounded by clean, neatly trimmed lawns.

Yet, other indicators tell a different story. With a per capita income of US$19,500 (U.S. Census Bureau, n.d.-c), Morrow’s residents lag those of Georgia (US$28,000, U.S. Census Bureau, n.d.-b) and the United States (US$31,000, U.S. Census Bureau, n.d.-e). Indeed, the city reports a poverty rate of about 12% (U.S. Census Bureau, n.d.-c). Beyond its economic challenges, the city has historically struggled with crime, but property and total crime rates combined have decreased from about 161 crimes per thousand in 2012 to about 98 crimes per thousand in 2017. This may stem from the Morrow police department’s strong public presence and aggressive traffic enforcement (Simmons, 2014). Such enforcement has produced substantial fines and fees revenue.

Riverdale

Riverdale is a southern metropolitan suburb of Atlanta with 16,500 residents. Like Morrow, Riverdale boasts many thriving businesses, from fast-food restaurants and grocery stores to gas stations and auto repair shops. Its city hall, courtroom, and community center were renovated in 2015. The latter, in particular, is frequently used by residents, as is Church Park, which offers new athletic facilities. Riverdale’s residential neighborhoods are quiet and composed of houses on spacious, tree-covered lots. Homes appear to be a mix of older single-story structures and newer multilevel residences. Most homes are carefully maintained, and the yards are clean with well-trimmed grass and shrubs, but homes in disrepair are present.

At less than US$19,000 a year (U.S. Census Bureau, n.d.-d), the city’s per capita income trails Georgia (U.S. Census Bureau, n.d.-b) and U.S. averages (U.S. Census Bureau, n.d.-e). Accordingly, the city reports a 25% poverty rate (U.S. Census Bureau, n.d.-d). Crime tends not to be a major issue in Riverdale, with total and property crime rates holding at around 63 crimes per thousand to about 71 crimes per thousand from 2012 to 2017. Like Morrow, Riverdale’s police department has a strong community presence and is prolific in issuing traffic citations.

Clarkston

Clarkston is a small but growing city of almost 13,000 people situated in the northeast suburbs of Atlanta. More than 90% of Clarkston’s residents are racial or ethnic minorities, due, in part, to a steady influx of immigrants and refugees from around the world. Clarkston’s many apartments and access to public transportation have made the city an attractive settlement location for immigrants and refugees since the 1990s (Long, 2017). With a per capita income of approximately US$14,000 (U.S. Census Bureau, n.d.-a) and a poverty rate of 33% (U.S. Census Bureau, n.d.-a), Clarkston has the lowest standard of living, on average, of our sample cities and lags statewide (U.S. Census Bureau, n.d.-b) and national averages (U.S. Census Bureau, n.d.-e). Clarkston’s combined total and property crime rate in 2017 was approximately 42 crimes per thousand, down from 105 crimes per thousand in 2014.

The city’s neighborhoods are a mix of well-maintained single-family homes and others in disrepair, most of which appear several decades old. Housing options also include many apartment complexes, which tend to look untidy. Clarkston’s shopping centers are largely made up of discount stores. Aging strip malls and empty storefronts can be seen throughout the city. They feature few, if any, recognizable larger chain businesses, and apart from a satellite university campus and a few medical offices, the city’s businesses appear to offer few white-collar jobs. Nevertheless, activity within the city evidences an effort to revitalize.

How the Cities Generate Revenue

In general, municipalities rely on different revenue sources to fund their budgets, but taxes, primarily property taxes, are the most ubiquitous and reliable source. However, during periods of economic distress, when property and other taxes fail to meet public costs, localities may pursue taxation by citation to remain afloat (Robinson, 2017). This appears to describe our sample cities. From 2012 to 2016, the cities’ fines and fees produced an annual average revenue of 14% (Riverdale), 17% (Morrow), and 25% (Clarkston), making them the cities’ second largest revenue source, after property taxes. Taxes represented between 58% and 71%. The revenues from fines and fees in comparably sized Georgia cities, however, were only 3%, and tax sources represented only 32%. Instead, enterprise funds—typically from city-owned utilities—produced an average of 56% of revenue. The sample cities took in only between 3% and 9% through enterprise funds.

As Figure 1 illustrates, the percentage of revenue from fines and fees in the sample cities has declined since 2012, but they still represented the second largest revenue source in all years studied. Notwithstanding those declines, in terms of revenue share derived from fines and fees, Morrow and Riverdale outpaced similarly sized cities by a factor of 4, whereas Clarkston outpaced such cities by a factor of 8.

Figure 1.

Fines and fees percentages over time, fiscal years 2012–2016.

Motivations for pursuing fines and fees revenue

Morrow, Riverdale, and Clarkston are prolific in generating revenue through fines and fees, but they are not entirely unique. Speed traps and other citation schemes have a long history in Georgia. When the Recorder’s Court in Clarkston’s home of DeKalb County imposed heavy fines on drivers and jailed those unable to pay, complaints grew so vociferous that in 2015, county leaders abolished the court and reduced fines (Niesse, 2016). And, over a number of months in 2013, hundreds of thousands of dollars were generated for local municipalities through a “blitz” of traffic stops called Operation Thunder (Brown, 2013). This means Morrow, Riverdale, and Clarkston rely on fines and fees within a larger environment marked by similar behavior. In addition, their decrease in fines and fees revenue since 2012 likely results from the economic recovery following the Great Recession and other forms of economic development rather than legislative reforms or changing local norms.

During the recession, municipalities, including Morrow, Riverdale, and Clarkston, likely turned to fines and fees as a readily available revenue source. But as the economy slowly recovered, their immediate need for fines and fees revenue waned. This is precisely the diagnosis of Morrow’s now-mayor when he was running for city council: “Current trends and forecasts do show improvement, and our city does not have the same crisis situation to face during the next budget year” (Yeomans, 2013). His analysis was borne out by trends in tax revenues (see Figure 2). In fact, all three cities saw fines and fees revenues decline, whereas tax revenue grew in proportional terms. At the same time, comparison cities reported slight decreases in tax revenues.

Figure 2.

Tax revenues as shares of total revenues, fiscal years 2012–2016.

Nevertheless, even during the decreasing trend, fines and fees revenue in the sample cities continued to represent a greater proportion of revenue than in comparison cities and helped the cities maintain solvency. Although Morrow and Riverdale saw financial improvements after 2012, both cities would have run consistent operating deficits without fines and fees revenue. In Clarkston, increasing expenditures in recent years have resulted in consistent operating deficits, which would have been exacerbated absent fines and fees revenue. Budget documents (e.g., Morrow’s budgets for fiscal years 2013–2017, Riverdale’s budgets for fiscal years 2012–2017, Clarkston’s budgets for 2013–2017) also indicate all three cities have planned on fines and fees revenue for future budgets.

Types of violations generating revenue

The sample cities generated their large fines and fees revenues by issuing large numbers of traffic and nontraffic citations, with the respective violations rarely threatening public health and safety. Measured per capita, Morrow’s citations exceeded those of Riverdale and then Clarkston (see Table 1). Morrow law enforcement issued almost one citation per resident per year. Of the citation categories, traffic citations were most frequently meted out by all three cities, followed by conduct and then property code violations.

Table 1.

Violation Totals and Violations per Capita by Violation Type, 2017.

Violation type/subtype	Clarkston	Morrow	Riverdale	Clarkston	Morrow	Riverdale
Property	Total violations			Violations per capita
Health and safety	22	0	172	0.002	0.000	0.010
State of disrepair	14	67	105	0.001	0.009	0.006
Other	58	34	44	0.005	0.005	0.003
Property total	94	101	321	0.007	0.014	0.020
Conduct
Socially maladaptive behavior	340	353	1,124	0.026	0.047	0.068
Trivial infraction	98	10	4	0.008	0.001	0.000
Other	174	56	208	0.014	0.007	0.013
Conduct total	612	419	1,336	0.048	0.056	0.081
Traffic
Nonspeeding	2,392	4,661	5,639	0.186	0.624	0.343
Speeding	170	1,068	1,371	0.013	0.143	0.083
Traffic total	2,562	5,729	7,010	0.199	0.767	0.426
Grand total	3,268	6,249	8,667	0.254	0.836	0.527

Note. The year 2017 was the only year for which complete data were available for all three cities.

The proliferation of traffic citations in the sample cities reflected the general culture of ticketing in Georgia, but the cities differed, in that, nonspeeding violations represented the greatest proportion of traffic tickets. These included parking violations, window tinting, lane violations, illegal U-turns, and expired tags. Conduct citations were those issued for misdemeanor personal conduct or actions not involving driving. Citations for socially maladaptive conduct represented the greatest proportion of conduct violations for all three cities. As for property violations, health and safety citations represented the smallest proportion of citations for Morrow and the second smallest for Clarkston but the largest for Riverdale. Aesthetic violations represented the greatest proportion of citations for state of disrepair. These included accumulation of debris, tall grass and weeds, and a failure to maintain cleanliness or neighborhood standards.

Our original analyses of properties in the cities found similar results. First, we accessed photographs taken by code enforcement officers as part of the citation process and coded them using a 5-point scale ranging from 1 = completely aesthetic to 5 = significant health/safety risk. On average, Riverdale’s property violations scored 1.4, and Clarkston’s scored 2.2. (Morrow’s photos were unusable for our analysis). Thus, the photographed violations appeared to be primarily for aesthetics rather than public health and safety threats.

Second, we created our own sample by photographing residential neighborhoods (Clarkston n = 293, Morrow n = 242, Riverdale n = 530), looking for any apparent code violations. We then scored those “violations” using the 5-point scale. Consistent with our analysis of the photos from the cities, the violations we identified in our original sample appeared to be primarily for aesthetics rather than public health and safety threats. For all three cities, scores were between 1 and 2, with violations ranging from tall grass and weeds to furniture on the side of the road. We do not claim to be trained code enforcement officers, and we did not physically inspect the interior of homes or backyards. Consequently, our scores could be biased downward. However, any downward bias is likely small given the scores’ similarity to those for the cities’ own photos, which did include properties cited for interior and backyard violations.

We also performed a similar analysis of traffic violations, coding our original video recordings of traffic using a risk scale similar to the one for property violations described above: 1 = no safety risk, 5 = significant safety risk. For all three cities, violations reached moderate risk on average, with almost identical scores at or slightly below 3. We also measured the rate of violations as minutes per violation, and found low rates in each city (Clarkston = 9.9 min during an observation period for every one violation, Morrow = 7.3 min, Riverdale = 11.6 min). Given the busy roads and highways in the sample cities, this seemed unusual, although the types of violations we observed included blocking an intersection, failing to stop at a stop sign or red light, failing to signal, or stopping on railroad tracks.

Although the cities’ use of code enforcement appeared out of proportion to the actual risks most violations posed, it has represented a boon to city finances. We had complete data for all three cities only in 2017, and in that year, Morrow and Riverdale each took in almost US$2 million in fines and fees. Clarkston collected almost US$1 million (see Table 2). Although Clarkston took in less fines and fees revenue overall, it led the way in terms of average fine amount per citation. The city’s average fine per citation was US$330, compared with US$312 for Morrow and US$223 for Riverdale.

Table 2.

Total and Average Fines and Fees per Violation Type, 2017.

Violation type/subtype	Clarkston	Morrow	Riverdale	Clarkston	Morrow	Riverdale
Property	Total fines (US$)			Average fines per citation (US$)
Health and safety	7,173	0	111,305	399	0	647
State of disrepair	6,000	5,313	905	429	79	9
Other	18,128	3,633	1,000	412	107	23
Property total	31,301	8,946	113,210	412	89	353
Conduct
Socially maladaptive behavior	97,073	276,556	521,963	339	783	464
Trivial infraction	18,474	1,217	469	205	122	117
Other	61,323	4,075	27,088	398	73	130
Conduct total	176,870	281,848	549,520	334	673	411
Traffic
Nonspeeding	720,146	1,369,227	1,006,268	337	294	178
Speeding	17,808	292,673	259,719	145	274	189
Traffic total	737,954	1,661,900	1,265,987	326	290	181
Grand total/average	946,125	1,952,694	1,928,717	330	312	223

Note. The year 2017 was the only year for which complete data were available for all three cities.

With citations disaggregated by type, Clarkston found property violations most profitable, whereas Morrow and Riverdale made the most per citation from conduct violations. The latter may have been due to the greater number of shoplifting violations in Morrow and Riverdale. Morrow reported the greatest per citation fine amounts of all three cities, with a per citation average US$800 for particular types of conduct violation.

How and Where the Money Is Collected: Municipal Courts and Probation Companies

As in many Georgia cities, the municipal courts of the three sample cities processed the citations. Municipal courts also play an important role in collecting fines and fees, though private probation companies are also involved in Morrow and Clarkston, as well as in many other Georgia cities. Below, we describe in turn the municipal courts and then probation companies.

Municipal courts

Ideally, courts act as neutral referees between city prosecutors and defendants who have received citations. But based on available data and our own observations, we find reason to question whether the sample cities’ courts live up to that ideal. In practice, their procedures suggest revenue generation may be a major goal. Indeed, all operate as well-oiled machines.

At the appointed time, defendants in all three cities line up to enter the courtrooms. Plea forms are provided to the defendants. Once in the courtrooms, defendants hear announcements about courtroom policies and defendant rights. Only Morrow provides the information in both Spanish and English. Throughout the proceeding, defendants will interact with or see at the front of the room judges, clerks, guards, city prosecutors, and various other people.

Court personnel direct defendants to plead guilty, not guilty, or no contest on the plea forms. In Clarkston, the no contest plea was presented as nolo contendere, a Latin term with the potential to confuse defendants. In Morrow, defendants with traffic citations are told they can avoid points on their driving records by pleading no contest. All three cities allow defendants to discuss plea options with a city prosecutor; most defendants do not. Upon completion and submission of the plea forms, proceedings begin.

In all three courts, proceedings move quickly, with many cases covered in each session. Among the data we collected while observing the courts, we coded the pace using a scale from 1 = with a lot of deliberation to 6 = very quick (see Table 3). We found an average pace of 4.91. Indeed, on average, each case is processed in 2 to 3 min. Yet, despite the speed, the courts generally follow highly standardized procedures (the relevant scale spans 1 = very little to 6 = very well; M = 5.22), meaning judges rarely attempt to replace jail time or other punishment with higher fines or engage in other “horse-trading.”

Table 3.

Results From Court Observations.

Court observation metrics	Clarkston	Morrow	Riverdale	Sample city avg.
Number of questions asked by defendant	0.50	0.52	0.44	0.50
How well does defendant understand events? (1 = very little, 6 = very well)	4.07	4.73	4.81	4.68
Defendant contested circumstances	73%	31%	6%	35%
What is the pace of proceedings? (1 = with a lot of deliberation, 6 = very quick)	5.25	5.06	4.39	4.91
How well did judge follow standardized procedures? (1 = very little, 6 = very well)	5.38	4.99	5.72	5.22
Judge engaged in horse-trading	0%	5%	11%	6%
Judge asked whether defendant understands rights	85%	0%	100%	34%
Judge asked whether defendant understands process	85%	2%	100%	36%
Ability to pay was determined	25%	60%	68%	59%
Defendant was represented by attorney	0%	0%	6%	1%
If translator was needed, one was provided	25%	NA	NA	25%
Defendant pleaded no contest, pleaded guilty, or was found guilty (for at least one charge)	95%	99%	97%	97%
Defendant was sentenced to probation	29%	30%	63%	38%

Note. NA = not applicable.

Given the quick pace, the sample cities dispose of more cases—as measured by clearance rates—than comparison cities (see Table 4). The latter cleared about half of their caseloads, according to AOC data. In the sample cities, it was between 7 and 33 percentage points more, on average.

Table 4.

Cases Processed, 2012–2016.

	Clarkston		Morrow		Riverdale		Comparison cities (n = 63)
Case types	Total	Avg.	Total	Avg.	Total	Avg.	Total	Avg.
Cases filed	27,939	5,588	31,826	6,365	71,440	14,288	24,264	4,876
Cases disposed	16,248	3,250	19,398	3,880	60,121	12,024	12,616	2,495
Clearance rate		58%		61%		84%		51%

In all three cities, defendants are predominantly people of color. Few struggle to speak English, although when a translator is needed, it is seldom provided. Using a scale from 1 = very little to 6 = very well, we found defendants tended to understand the process at least somewhat well if not well (M = 4.68), and few asked questions during their time in court, though that could also be explained by the proceedings’ quick pace.

A plea of guilt or no contest results in a quick process. Those who plead not guilty make their case, nearly always without attorney assistance, and are almost always found guilty. Even the rare defendants represented by counsel are found guilty, although in Riverdale legal representation resulted in reduced fines during our observation.

Ability-to-pay determinations were conspicuously inconsistent—observed in 59% of cases across all three cities. When judges did make these determinations and find defendants unable to pay fines immediately, they sentenced most to probation. By design, probation affords defendants the benefit of time to come up with the necessary funds. But that benefit can become a liability as fees accrue during the probation term. Indeed, Clarkston’s judge apparently routinely advises defendants they will pay additional fees if they remain on probation for more than a month. Alternative sentences are rarely assigned.

Overall, the courts’ efficiency—the sheer number of cases they process and the amount of fines and fees they generate—sends the message that revenue generation is a major priority. Indeed, the courts do face potential structural incentives to maximize fines and fees revenue. Consistent with state law (Ga. Code Ann. §§ 15-21A-6[b]–10.1(b), 36-32-7(b)), fines and fees revenue generated by the courts fill the cities’ general funds, the same funds that finance those courts (City of Clarkston, n.d.; City of Morrow, n.d.; Riverdale, n.d.). This has the potential to influence judicial rulings. The prospective influence does not end there. In Morrow, Riverdale, and Clarkston, the city councils appoint their respective judges (consistent with Georgia law: Ga. Code Ann. §§ 36-32-2, pt. 1 § 2.1), and after a minimum appointment of 1 year, the judges serve at the will of city leaders (Morrow, Ga. Code of Ordinances pt. I § 4.11[b], (d); Riverdale, Ga. Code of Ordinances pt. I § 23; Clarkston, Ga. Code of Ordinances pt. I § 3.04).

Probation companies

Although municipal courts play a primary role in collecting money from the cases they hear in many Georgia cities, private probation companies often also play an important role, including in Morrow and Clarkston. When people convicted of ordinance violations cannot pay their fines immediately, they are generally placed on probation, during which they must pay the fines in installments, plus a monthly supervisory fee (J. F., 2014).

Morrow and Clarkston used private probation companies during the years studied. Probation data indicate they consistently assigned more than twice as many people to probation than statewide averages. Compared with a statewide average of 219, Clarkston and Morrow, respectively, assigned 458 and 547 people to probation per quarter from the second quarter of 2015 through 2017. Over the same period, Riverdale consistently assigned even more people to probation, although it ran its own probation services. Its probation population—a quarterly average of 1,540—was more than 7 times greater than the statewide average.

Probation can be profitable for municipalities, and for Morrow and Riverdale, it was particularly so. For all three cities, probation produced more than US$9 million in fines from 2012 through 2016(see Table 5), which represented an average of 17% to 42% of total fines revenue collected.

Table 5.

Fines and Percentages of Total Fines Revenue Collected Through Probation, Fiscal Years 2012–2016.

Year	Clarkston (US$)	Morrow (US$)	Riverdale (US$)	Total (US$)	Clarkston (%)	Morrow (%)	Riverdale (%)
2012	198,249	1,550,522	1,245,694	2,994,465	17	42	42
2013	191,055	882,070	945,569	2,018,694	16	41	39
2014	159,656	561,544	972,516	1,693,715	16	22	53
2015	125,626	274,554	476,850	877,029	11	20	27
2016	262,211	354,038	814,844	1,431,093	28	33	48
Total/avg.	936,797	3,622,728	4,455,472	9,014,997	17	33	42

Note. For 2015, Q1 fines were missing from the state data; therefore, numbers here undercount the total. Also, due to missing data, we imputed fines revenue for Morrow in 2015 and Riverdale in 2013 using the cities’ Comprehensive Annual Financial Reports.

Added to that were more than US$600,000 in probation-related fees in 2016 and 2017 (see Table 6). The sample cities’ quarterly averages outpaced statewide averages, with Riverdale’s at almost 5 times above those statewide.

Table 6.

Fees Collected Through Probation, 2016–2017.

Quarter	Clarkston (US$)	Morrow (US$)	Riverdale (US$)	Total (US$)	Statewide avg. (US$)
2016, Q1	16,437	24,097	52,088	92,622	9,933
2016, Q2	12,371	18,494	43,227	74,092	8,717
2016, Q3	12,914	21,992	38,907	73,813	8,728
2016, Q4	11,059	24,973	38,691	74,723	8,312
2017, Q1	12,328	24,237	50,934	87,499	9,364
2017, Q2	11,405	22,165	38,703	72,273	9,167
2017, Q3	10,682	23,333	41,627	75,642	8,285
2017, Q4	10,790	27,961	49,158	87,908	8,452
Total	97,985	187,252	353,334	638,571	70,958
Quarterly avg.	12,248	23,406	44,167	79,821	8,870

Conclusion

This case study examined the phenomenon of taxation by citation, which is when cities pursue and rely on revenue generated through fines and fees. Through a study of three Georgia cities—Morrow, Riverdale, and Clarkston—with a history of said activity, we asked, among other things, what cities that engage in taxation by citation look like. We found the cities share several important characteristics: They are poorer than average, face uncertain economic futures, and appear to have few means of generating substantial revenues. They process citations through their own courts, the latter of which rely on municipal revenue for operations. City leaders also appoint the judges in those courts.

Trends in municipal finances around the time of the Great Recession suggest the cities—including their courts—used fines and fees for more than pursuing public health and safety and instead relied on the revenue to balance their budgets. During the recession, property tax revenue—the primary revenue source for the cities—declined sharply, and the proportion of revenue from fines and fees increased. During the recovery, the trends reversed. And, in cities such as our sample cities that apparently lack other means of generating substantial revenues, fines and fees no doubt took on an even more outsized role during the recession. Yet, fines and fees continue to account for the second largest proportion of revenue in the three cities, even well after the recovery. It could be that the cities have grown accustomed to budgeting for fines and fees revenue or that, once in place, the revenue-generating apparatuses are not easily ramped down.

Turning to traffic tickets, for decades, motorists have complained traffic tickets primarily function as a means of generating revenue. Public officials consistently respond that traffic tickets are a way to increase public safety (Coleman, 2014; Hunt, 2015; Simmons, 2014, 2018; Teegardin, 2016). At least some empirical evidence supports that proposition (Makowsky & Stratmann, 2011). Nevertheless, our review of traffic and nontraffic citations indicates the offenses generating citations rarely represent significant threats to health and safety, meaning perceived need for revenue and possibly economic development is the likelier motivation for pursuing fines and fees rather than health and safety rationales. Interestingly, a recent study by Harvey (2020) suggests health and safety and economic motivations can both be at work. After Saskatchewan, Canada’s adoption of a fiscal rule reducing by 75% the share of traffic fine revenue captured by towns larger than 500 in population, Harvey used regression discontinuity to study differences in accident and fines data between towns just above and below the population threshold. Results indicated greater rates of accidents, accident-involved vehicles, accident costs, and accident-related injuries in towns above the threshold compared with those below. Moreover, fines data revealed drivers receiving citations in towns below the threshold had fewer days to pay fines, which led to greater risk of late fees and suspended licenses.

Turning back to our results, to meet the perceived need for revenue, the sample cities share the means to produce it through their own municipal courts. Judges appointed by and serving at the will of city leaders oversee the courts, and the cities’ general funds pay court operating costs, thereby creating structural dependency and the potential for influence. The potential effects of such arrangements are illustrated in research on appointed versus elected officials, suggesting the latter are more responsive to political accountability, specifically under conditions of fiscal stress. Using a 15-year panel of property value assessment data from 351 Massachusetts municipalities, Makowsky and Sanders (2013) found appraised values grew slower in municipalities with elected assessors and faster under appointed ones. In our data, courtroom indicators also suggest a revenue motivation. The courts process many cases in quick fashion, and findings or pleadings of guilt are almost universal. Defendants may receive unofficial guidance to pay fines rather than contest charges; ability-to-pay hearings occur inconsistently; and translators, when needed, are rarely provided.

Together, this all suggests systemic incentives may produce taxation by citation. City leaders need not be motivated by simple rapaciousness. They may have other goals, often driven by economic circumstance, that make taxation by citation attractive. Similarly, judges need not be motivated by financial revenue in deciding the guilt of defendants before them. Rather, a high rate of guilty convictions may result from the pursuit of judicial efficiency, which, over time, becomes business as usual and creates a steady stream of income in not only lean years but also fat ones.

We studied Morrow, Riverdale, and Clarkston because of their prolific revenue generation through fines and fees, but additional research such as what we present here could be particularly useful in determining not only the extent to which cities in other states show similar patterns but also ways in which other municipalities differ and what factors may contribute to those differences. Further research could also examine the relationship between taxation by citation and social capital or trust in government. If Ferguson, Missouri, is any indication, taxation by citation may contribute to lower levels of trust, diminishment in perceived credibility, and higher levels of ill will toward city government, law enforcement, and the judicial system on the part of residents (Goldstein et al., 2020; Robinson, 2017, U.S. Commission on Civil Rights, 2017). To date, however, these relationships are largely unexplored but remain important considerations for effective and equitable policy making.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Dick M. Carpenter II

Author Biographies

Dick M. Carpenter II is a professor at the University of Colorado Colorado Springs and a senior director of strategic research at the Institute for Justice.

Kyle Sweetland is a researcher at the Institute for Justice. His research focuses on property rights and economic liberties. He is a co-author of License to Work: A National Study of Burdens from Occupational Licensing, and his work can be found in journals such as Economic Affairs and Journal of Entrepreneurship and Public Policy.

Jennifer McDonald is a senior research analyst at the Institute for Justice, where she researches topics such as civil forfeiture, municipal fines and fees, government transparency, occupational licensing, and home-based businesses. She holds a Master of Public Administration, with emphases on management and economic policy, from the London School of Economics and Political Science.

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