The leaders of America’s cities could take a major step toward equity and fairness for their residents by making relatively modest changes to long-accepted policies that often hurt ordinary people.
One obvious place to begin: local fines, fees, and penalties. A $150 traffic fine is an inconvenience to those with sufficient funds yet can be disastrous for those without. Tailoring penalties and fees to a person’s ability to pay would be more fair and benefit many lower-income residents. Such an approach would encourage voluntary payment compliance in the first place and decrease reliance on costly penalty-driven enforcement.
To the more than 100 million Americans who do not have $400 for emergencies, a $100 delinquent parking or speeding ticket — especially if it’s compounded by an increase in insurance premiums — presents a difficult choice. Will that money go toward the ticket or groceries? According to a 2017 report, more than 7 million people have lost their driver’s licenses because of traffic debt. Lower-income individuals who lose their licenses or have their cars impounded until expensive fees are paid disproportionately lose their jobs. And where does that cycle leave their families and communities? In what manner is this good governance?
Such fines are just one example of the everyday municipal actions that erode the concept of fairness for residents. Other policies make it harder and slower for people to apply for benefits or unfairly drain resources away from neglected communities.
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Boston, like most other large cities, relies on fines and fees, utilizes collection agencies, and prevents people from using their vehicles by prohibiting registration as an enforcement tactic. A parking fine and late penalty of, say, $120, or a speeding ticket of $200 means much more to a low-income family juggling food, health care, transportation, and housing costs than a more affluent family.
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These issues cascade across categories. A Boston water and wastewater fee of $134 a month is more than 2 percent of the average city resident’s median household income, which makes water and wastewater services unaffordable for many in Boston, just as in other urban areas affected by EPA standards. The Massachusetts Advisory Committee to the US Commission on Civil Rights has recently flagged that, despite being a recognized human right, access to clean water and sanitation is becoming inaccessible for many residents. These are just some of the specific fines and fees that all large cities, including Boston, should consider adjusting based on residents’ income.
I’ve seen this work firsthand. When I began my career as a prosecutor in Indianapolis, my responsibilities included collecting child support for mothers on public assistance. We established national best practices that increased collections from $900,000 a year to $38 million. Eventually we became more aware of the societal and personal price of forcing too high of payments on fathers who, because of job loss or imprisonment, could not pay. Many of them often ended up in contempt of court and in turn suffering further job and economic losses.
When we modified our collection approach to allow alternative ways to make good on responsibilities — including job training, parental programs, community service, and more — there was no change in compliance with court orders and collections continued apace. Compassion and accountability are partners, not antagonists.
Mayors and county executives need to understand that fairness on fines produces better results. The Rethinking Revenue project, a set of reports by academic, economic, and government finance experts, provides evidence of this seemingly contradictory approach. The studies show that offering lower fines and fees — or alternative payment arrangements — for those unable to pay standard rates not only reduces license suspensions, car impoundments, and utility shut offs, but results in more money to local governments through increased collection. This method, which the authors refer to as segmented pricing, produces fairness and revenues at the same time.
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Underpricing services such as parking also aggravates inequity. Underpricing parking in upscale commercial areas encourages more consumption of scarce resources and reduces revenues that a city could use to subsidize the transit or parking of those in need. In Baltimore, city officials adjust parking rates depending on usage and location. Another segmented fine structure could be implemented by adjusting costs based on the demographics of the neighborhood where the car or driver is registered.
Officials also need to consider the cascading consequences of such actions. Inefficiencies that aggravate unaffordable losses are the very definition of inequity.
In 2011, while I served as deputy mayor of New York City, Finance Director David Frankel wanted to make it easier for delinquent payers to access their booted and towed cars — over 100,000 a year at the time. On average, it took 27 hours from the time someone discovered the towing to the time they redeemed their car. By halting most towing and replacing the boots with ones that could be digitally released, the city reduced the time it took someone to get their car back from 27 hours to 10 minutes.
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Public officials owe residents their best efforts to produce fair, high-quality city services and residents owe their neighbors and government compliance with laws and norms. Holding individuals accountable for their actions in better calibrated ways allows officials to combine compassion and accountability. When cities charge too much, and then broadly declare payment amnesties for those who owe obligations, they undermine their own compliance efforts and send the wrong message to those who followed the rules and paid.
Equity may begin with large rhetorical aspirations but it is accomplished in the nitty gritty of day-to-day governance, where a willingness to innovate produces better results. Segmented pricing is a prime place to begin.
Stephen Goldsmith is a professor of the practice of urban policy at Harvard Kennedy School and faculty director of the Data Smart Cities Solutions program in the Bloomberg Center for Cities at Harvard University.
