In recent years, the issue of “taxation by citation” has grown in national prominence. It is generally defined as municipal revenue generation through fines and fees that transcends a clear relationship to public health and safety and serves more as a revenue generating device. According to critics, taxation by citation creates conflicts of interest, violates the rights of those with low income, and distorts law enforcement priorities. Municipal leaders reject such criticisms by denying taxation by citation even exists. To date, research findings have been mixed on whether cities practice taxation by citation. This Article examines whether there is a relationship between fines and fees revenue generation and broader economic trends. If there is a relationship, that would suggest cities do, indeed, use municipal ordinance enforcement and the resulting fines and fees as a means of revenue generation beyond public health and safety. We use a panel of 1,471 cities from the Census of Governments spanning 2005 through 2017, which captures the Great Recession of 2008. Fixed-effects regression analyses indicate a significant relationship between the fines and fees revenue trend and the Great Recession. We conclude by recommending legal reforms to eliminate the financial incentives to engage in taxation by citation. These include eliminating municipal courts, capping the revenue cities may retain from ordinance enforcement, and ensuring judicial independence from municipal executive and legislative branches.
Dick M. Carpenter II, Chelsea Lawson & Courtney Deuser,
What the Great Recession Revealed About Taxation by Citation and What Can Be Done About It,
U. Mich. J. L. Reform
Available at: https://repository.law.umich.edu/mjlr/vol54/iss4/6