August 7, 2020
The Costs of “Cash Register Justice” in Virginia: Racial Disparities & Poverty Traps
In a quest for revenue, the criminal justice system in the United States has come to rely on court-imposed fines and fees—even for the most minor offenses—giving rise to a form of “cash register justice” that places the most severe financial burdens on those who can least afford it. But in the face of a pandemic that has left families struggling to stay afloat, and in the wake of calls for racial justice, the need for both immediate relief and serious reform has become even more urgent. In the upcoming special session, Virginia’s lawmakers should enact a statewide moratorium on fines and fees.
Background: The Ferguson Flashpoint
In 2014—following the shooting of Michael Brown in Ferguson, Missouri—the United States Department of Justice (USDOJ) launched an investigation into Ferguson’s Police Department (FPD) and municipal court system. Among its many findings, the USDOJ’s final report presented, in painstaking detail, the racial biases in Ferguson’s approach to law enforcement. This included an overreliance on fines and fees that “fundamentally compromise[d]” the role of the local courts. As the report explained:
“The City’s emphasis on revenue generation has a profound effect on FPD’s approach to law enforcement. Patrol assignments and schedules are geared toward aggressive enforcement of Ferguson’s municipal code, with insufficient thought given to whether enforcement strategies promote public safety or unnecessarily undermine community trust and cooperation … [p]artly as a consequence of City and FPD priorities, many officers appear to see some residents, especially those who live in Ferguson’s predominantly African-American neighborhoods, less as constituents to be protected than as potential offenders and sources of revenue.”
The USDOJ report not only raised national awareness about the issue of fines and fees, but also prompted a broader question: how unique is Ferguson? Recent studies suggest that these problems are unexceptional. A 2016 analysis of more than 9,000 cities across the country found that “the use of fines as revenue is both commonplace and robustly connected to the proportion of residents who are black.” In addition, a 2017 report from the United States Commission on Civil Rights concluded that the impacts of fines and fees are disproportionately “borne by communities of color, along with the poor.”
A Closer Look At Disparities in Virginia
But to what extent are the findings of prior studies on fines and fees mirrored in Virginia? To answer that question, TCI reviewed data from the State Compensation Board (SCB), which issues annual reports on court-imposed fines and fees across the Commonwealth. Specifically, TCI analyzed the SCB’s Fiscal Year 2019 assessments of fines and fees by all courts, which includes Circuit, General District, Juvenile & Domestic Relations, and Combined courts.
As the figure below illustrates, fines and fees are assessed at higher rates in the courts that serve localities with the highest share of Black residents and/or residents who have incomes below the poverty line. Across all court areas, an average of $82 was assessed in fines and fees on a per capita basis. But that number jumped to $147 (a 79% increase) in courts serving areas with the highest share of Black residents and climbed to $106 (a 29% increase) in courts serving areas with the highest share of people living in poverty. Overall, these data points demonstrate how court debt can deepen inequality in Virginia.
The Compounding Impact of COVID-19
Even before COVID-19, Virginia’s laws and practices often transformed court debt into major financial burdens, particularly for people already struggling to make ends meet. Yet those unable to pay upfront often end up paying the most.
Courts, for example, are not required to determine a person’s ability to pay fines and fees before they are assessed, resulting in a process that works for Virginians with means and creates poverty traps for others. For those who cannot pay the entire amount immediately, there is an option to enter into an installment payment plan, but with an additional fee and, frequently, a mandatory down payment. If no installment plan is made, interest begins to accrue after 40 days. If no payment has been received for more than 90 days after sentencing, the account is “delinquent” and sent to collections, but the balance also increases by 17%.
For individuals hoping to reduce their debts through community service, that is an option for some, but courts in Virginia do not agree on the value of one hour of service, which is $7.25 in Emporia, $10.00 in Henrico County, and $12.00 in Culpeper County. In other courts, the community service option is only available to people if they claim, in writing, that they are unable “to make substantial payments” due to “unique circumstances.”
The arrival of COVID-19, and the resulting economic turmoil, has underscored the need for structural reforms. Recognizing this, and in response to the pandemic, the Virginia Supreme Court in March temporarily suspended interest from accruing on court debt and stopped sending accounts to collections. The Court, however, never publicly announced these critical relief measures and let the moratorium expire at the end of July.
But the case for emergency relief from court debt is far stronger now than it was at the beginning of the pandemic. Virginia’s unemployment rate in June was 8.4%, up dramatically from 3.3% in March. Congress has also so far failed to extend additional unemployment insurance benefits, which had been a lifeline for many, and the maximum weekly benefit in Virginia has dropped from $978 to $378. There is growing evidence that COVID-19 is exacerbating pre-existing inequalities, not only in light of the high Black unemployment rate of 15.4%, but also because Black Virginians represented nearly 50% of all initial unemployment insurance claims in recent weeks, up from 25% in early April. For all of these reasons, it is difficult to imagine a worse time to collect court debt—debt that is assessed at the highest rates in areas with the most Black Virginians and/or people living in poverty—than right now.
Finally, from a fiscal perspective, it makes little sense to aggressively collect court fines and fees in this economic climate. In the five most recent fiscal years (all of which were recession-free) the total revenue collected by courts ranged from 59% to 63% of the total fines and fees assessed. Even in periods of economic prosperity, court debt is an inefficient revenue source.
Next Steps: Revive The Emergency Moratorium on Fines & Fees
The General Assembly has an opportunity to provide emergency relief from fines and fees. While this issue area is in need of major policy reform, given current economic conditions and the racial disparities in how court debt is assessed, the top priority for the special session should be to legislatively reinstate the Virginia Supreme Court’s moratorium on fines and fees.