Mises Wire

Want More Government Revenue? Just Write More Traffic Tickets.

On some level, all of us realize that traffic tickets are seen by local governments as a form of revenue. Supposedly, the intent behind issuance of fines for traffic offenses is to disincentivize behaviors which are deemed to be unsafe, such as driving over the speed limit or not wearing a seatbelt (despite the fact that the latter poses no risk to anyone but the driver). The punishment for this type of offense being almost always a fine, as opposed to any type of nonmonetary punishment, is suspect in itself. But even if the monetary cost of speeding tickets really is better at preventing speeding than some other punishment, the fact remains that local governments do lay claim to the money forfeited and for that reason have another incentive besides community safety to issue those tickets.

It is common wisdom that one runs an especial risk of being ticketed if caught speeding in or around a small town because those towns don’t have as much money as bigger cities, and they’d quite like to have some of yours. Intuitively, this makes sense. If a small town can accrue revenue from people passing through, they have less reason to burden their voting constituency with additional taxes, which makes the local officials’ outlooks in future elections a bit more favorable.

In 2015, when the Department of Justice investigated the Ferguson, Missouri, police department for unrelated matters, the report they published revealed (among other things) that the town of Ferguson financed 23 percent of their 2015 budget with fines and fees. But bigger cities also value revenue from traffic fines and sometimes even say as much themselves. In 2023, the Chicago Tribune reported that Mayor Brandon Johnson’s 2024 financial package anticipates the city pulling in $46 million more from fines than it had the previous year. Records available from the New York City comptroller report that in the four-year span from fiscal years 2012 to 2016, the Big Apple’s per-year revenue from traffic fines increased by $136 million.

However, while governments’ valuing revenue from traffic tickets is well documented, we would need empirical evidence to support a claim that local governments actively seek to issue tickets with the specific purpose of increasing revenue.

A 2007 study titled “Red Ink in the Rearview Mirror: Local Fiscal Conditions and the Issuance of Traffic Tickets” provides exactly that sort of evidence.

The study reviewed data from ninety-six North Carolina counties from 1990 to 2003, analyzing the relationship in each of these counties between the yearly percent change in local government revenue per capita and the correlating yearly percent change in issuance of traffic tickets. The study used several notable control variables: registered voters as a share of the voting age population, to control for differences in political activity between the counties; tourism spending per capita, to account for differences in amount of tourism between each county; and law enforcement officers per capita and number of arrests per capita, to control for differences in size and activity of each local police department.

After thorough analysis of the data, the paper’s authors drew the following conclusion:

We find that significantly more tickets are issued in the year following a decline in revenue, but the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a ten percent decrease in negative revenue growth results in a 6.4 percent increase in the growth rate of traffic tickets. Our results suggest that tickets are used as a revenue generation tool rather than solely a means to increase public safety.

This study is a valuable piece of scientific evidence pointing to an important truth that everyone needs to know: all else being equal, the government really wants your money.

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