Raising Revenue Through Regressive Traffic Fines While Scaling Back Traffic Safety is Unsound and Unsafe

Chairperson McDuffie and members of the committee, thank you for the opportunity to testify. My name is Michael Johnson, and I am a Policy Analyst at the DC Fiscal Policy Institute (DCFPI). DCFPI is a nonprofit organization that shapes racially-just tax, budget, and policy decisions by centering Black and brown communities in our research and analysis, community partnerships, and advocacy efforts to advance an antiracist, equitable future.

DCFPI urges the committee to make important policy and practice changes across DC’s fines and fees systems, including changes related to 1) allocating revenue raised through fines and fees, 2) mitigating the racially inequitable harm of fines and fees, and 3) improving fines and fees transparency.

As the District looks to fund core services, policymakers can and should raise revenue in equitable ways. However, the mayor’s fiscal year (FY) 2025 budget proposes raising hundreds of millions of dollars through regressive traffic fines across the financial plan while also scaling back traffic safety programs—an unsound and unsafe budgeting approach that will disproportionately harm DC’s Black and brown residents.

Moreover, despite the proliferation of fines and fees in recent years, the District does not provide adequate transparency regarding these revenue sources. Existing data show that fines and fees disproportionately harm Black and low-income communities and can act as barriers to employment and wealth-building opportunities. However, much of the data on DC’s fines and fees—particularly court and criminal legal fines and fees—is inadequate and inaccessible.

The committee and Council should:

• Allocate a greater share of traffic fine revenues towards traffic and safety measures by rejecting the mayor’s proposed repeal of the Automated Traffic Enforcement (ATE) System Revenue Designation Amendment Act of 2021.
• Reduce barriers to employment and wealth-building opportunities for District residents by passing and fully funding the Clean Hands Economic Expansion and Revitalization Amendment Act of 2023.
• Improve fines and fee data infrastructure and transparency by:
  • Requiring the Office of the Chief Financial Officer (OCFO) to publish detailed non-tax and special purpose revenue reports biennially, as done with dedicated taxes, which will improve reporting of revenue sources generated through fines and fees; and
  • Working with the OCFO and other agencies to support efforts to collect, share, and publish fines and fees collections data by demographic characteristics.

Increasingly Funding the District’s Essential Services with Volatile Fines and Fees Revenue Sources is an Unsound Budgeting Practice

Between 2010 and 2019, the District increasingly generated revenues for DC’s general fund, which is used to pay for core government services, through traffic fines—but these revenue sources can be extremely volatile. For example, in FY 2019, prior to the COVID-19 pandemic, DC generated $76 million more in traffic fine revenues compared to FY 2010—an increase of 48 percent.^[1] However, these revenues significantly declined in the years following COVID-19, largely due to reduced commuter activity.^[2] In FY 2020, traffic fine revenues decreased by $60 million compared to the year prior, or 26 percent.^[3] Now, over four years since the start of the pandemic, traffic fine revenues have yet to return to pre-pandemic levels.^[4]

The pandemic was not the first unforeseen instance where lower-than-anticipated traffic fine revenues placed the District in a precarious financial situation. In 2015, DC needed to fill a $40 million budget gap to make up for reduced traffic fine revenue caused by malfunctioning cameras.^[5] In 2023, the US House of Representatives proposed to block DC’s use of ATE cameras, which would have resulted in a revenue shortfall of $1 billion over the financial plan. These and other external circumstances outside of DC’s control leave traffic fine revenue an unstable funding source for DC’s core government functions.

Despite the potential volatility of traffic fine revenues, however, the District plans to substantially increase its reliance on these revenues in the coming years by adding an additional 342 ATE cameras to the existing 145.^[6] In total, the OCFO projects that traffic fine revenues will nearly double in FY 2025 compared to the current fiscal year and remain at this level through FY 2027, generating $342.5 million annually, on average.^[7]

By Decreasing Traffic Safety Investments While Increasing ATE Enforcement, the Mayor’s Budget Disproportionately Harms Black Residents in DC

The OCFO should ensure that any revenue generated by traffic fines are used for their stated purpose: improving traffic safety. However, the mayor’s proposed budget will change current law to redirect ATE revenue away from traffic and pedestrian safety and instead toward the District’s unrestricted general fund. ^[8]

Currently, any ATE revenues that exceed financial thresholds set by law must be deposited into a fund to support traffic safety measures, while revenues below the set thresholds can support DC’s general budget. The mayor’s proposal will repeal this traffic safety fund and allow the mayor to transfer all of the fund’s existing resources to the District’s local fund. If approved, the mayor’s proposal will result in ATE revenues from FY 2023 and FY 2024—over $7.3 million—being diverted from needed investments in traffic safety into the general budget.^[9] Additionally, under the mayor’s proposal, any future ATE revenues collected above the amounts set by existing law will go toward the local fund and would not be dedicated for traffic safety measures.

The mayor’s proposed funding redirection will disproportionately harm Black and low-income communities, who are more likely to be victims of traffic-related fatalities. Between 2014 and 2021, Black DC residents accounted for at least 58 percent of all traffic-related fatalities, despite only accounting for 41 percent of DC’s population in 2020.^[10],[11] Additionally, during this same period, traffic-related fatalities were eight times higher in neighborhoods with the highest concentrations of residents with low incomes compared to areas in the wealthiest parts of the District.

Moreover, increasing ATE enforcement will harm Black residents and residents with low incomes, who bear a disproportionate share of traffic fines. In DC, motorists in predominately Black neighborhoods face more frequent ticketing, on average, compared to motorists in other areas of the District. Between 2016 and 2020, the District collected 62 percent of all traffic fine revenue from neighborhoods where Black residents make up at least 70 percent of the population and the median household income is below $50,000, an analysis by The Washington Post shows.^[12] And, because fines and fees typically are not adjusted for income level, people with lower incomes must pay a larger share of their earnings for each fine compared to people with higher incomes. Due to historic and ongoing systemic racism, Black household income in DC is persistently lower than white household income, meaning that Black residents experience outsized financial harm as a result of fines and fees.

These racial disparities in traffic enforcement and fatalities underscore the dual harm of the mayor’s proposed redirection of ATE revenues from traffic and pedestrian safety measures for Black and low-income communities. Although these communities bear the brunt of increased traffic enforcement, under the mayor’s proposal they will be unable to fully receive the promised benefit of additional traffic safety investments.

DCFPI encourages the Committee and members of the Council to reject the Budget Support Act (BSA) subtitles redirecting traffic fine revenues from traffic safety investments towards the local fund.

The Council Should Pass and Fully Fund the Clean Hands Certification Economic Expansion and Revitalization Amendment Act of 2023

In 2022, the Council approved legislation exempting driver licenses from the District’s Clean Hands Law, but more work is needed to exempt occupational and business licenses.^[13] Under the District’s Clean Hands Law, any District resident with $100 or more in unpaid fines, fees, or other debts owed to the District are denied occupational and business licenses, in addition to other District goods such as grants or contracts.^[14] In December 2023, Councilmember McDuffie introduced the “Clean Hands Certification Economic Expansion and Revitalization Amendment Act of 2023” (Clean Hands Economic Expansion Act), which would 1) prohibit the District from denying occupational and business licenses to DC residents under the Clean Hands Law and 2) raise the threshold of allowable debts from $100 to $2,500 for contracts, grant, and other licenses subject to the Clean Hands Law.^[15]

DCFPI encourages the committee and Council to pass and fully fund the “Clean Hands Economic Expansion Act” to promote greater economic security for District residents and particularly for Black residents. Currently, over 125 occupations and businesses require an occupational or business license, representing nearly one in five District workers and occupations.^[16] By prohibiting residents with unpaid debts to access and maintain employment opportunities, the Clean Hands Law creates a barrier to well-paying jobs for thousands of DC residents. From March 2022 to January 2023, for example, the District denied nearly 24,000 applications for a Certificate of Clean Hands, or 36 percent of all requests.^[17]

Although the Office of Tax Revenue (OTR) does not collect demographic data regarding applicants and denials of Clean Hands, passing and fully funding the Clean Hands Economic Expansion Act will likely improve employment and business opportunities for Black residents in particular. In 2022, the Council Office of Racial Equity (CORE) concluded that Clean Hands disproportionately blocks Black residents from accessing occupational licenses, starting a business, or competing for contracts, among other wealth-building activities.^[18] CORE’s assessment is especially alarming given the stark racial wealth and income gaps among DC residents, which are the result of the District’s long history of exploiting Black workers.^[19] In the DC area, white households have 81 times the wealth of Black households, and the District’s white household income is nearly 2.5 times Black household income.^[20],[21]

By passing and fully funding the Clean Hands Economic Expansion Act, the committee can help eliminate barriers to employment and wealth-building opportunities for DC’s Black workers. Additionally, the committee should work to ensure that the OTR collects and publishes demographic data for applicants and denials of Clean Hands, eliminate down payment requirements for payment plans, and explore scaling fines and fees to a person’s ability-to-pay.

Improve Fines and Fees Data Infrastructure

DCFPI also encourages the Committee and OCFO to improve public and inter-agency data infrastructure for fines and fees broadly. Although the Department of Motor Vehicles and other agencies publish detailed traffic fine data, there is much less transparency for other fines and fees—particularly court and criminal legal fines and fees. Inadequate and inaccessible public information on fees and fines severely hinders residents’ awareness and understanding of how these revenue sources affect DC’s communities and undermines advocates’ efforts to make fees and fines more equitable. DCFPI previously has provided testimony about the need to publish, collect, and share more comprehensive fine and fee data, and DCFPI urges the committee and Council to improve transparency of these revenue sources.^[22]

Require the OCFO to Publish Detailed Non-Tax and Special Purpose Revenue Reports Biennially

The OCFO reports annually on general and special purpose non-tax revenues, including an overview of fines and fees revenues. The OCFO’s current annual reporting on fines and fees revenues is useful, but details regarding many of the District’s fines and fees are incomplete. For example, the annual reports do not have detailed information about the rate structure, purpose, and revenue designation for DC’s fines and fees. Previously, the OCFO published supplemental reports, known as non-tax and special purpose revenue reports, that gave this type of detailed information about each fine and fee levied in the District. Unfortunately, the OCFO is not statutorily required to publish these supplemental reports and has not done so since 2015.

Meanwhile, DC has continued to add more revenue sources from fines and fees since the OCFO published its last supplemental report in 2015. For example, in 2015, the OCFO identified 99 individual fines or fees; by 2019, however, the number of individual fines and fees increased to 153—an increase of 55 percent.^[23] The OCFO should update its 2015 non-tax and special purpose revenue reports. Additionally, the Committee should ensure that these supplemental fines and fees reports are updated biennially, similar to OCFO reporting of dedicated taxes in the District.

Work with the OCFO and Other Agencies to Collect, Share, and Publish Fines and Fees Collections Data by Demographic Characteristics

As discussed, there are data to demonstrate that fines and fees result in racially disparate harm that affects Black residents most. However, because existing fines and fees data don’t include a breakdown of how fines and fees are collected across income levels, race and ethnicity, gender, disability status, or other characteristics, stakeholders lack an understanding of the full impact of fines and fees on specific populations in DC. Without these demographic data, it is challenging for advocates to advance meaningful and equitable reform, such as ability-to-pay determinations for traffic, court, and other fines.

The Committee should work with the OCFO, and other agencies responsible for levying and collecting fines and fees, to increase inter-agency coordination, data collection, and data sharing aimed at ensuring the OCFO is equipped to publish demographic information about the DC residents paying fines and fees.

To support the OCFO, the committee could conduct a systemic review of agencies’ existing data collection practices and data sharing agreements to better understand what demographic information is already collected, where and how those data are shared, and where data sharing connections across agencies can be improved. Where gaps exist in collection and sharing of demographic characteristics, the committee and OCFO could work with agencies to identify common reporting metrics or to create data sharing agreements.

Alternatively, the committee could explore creating a new commission focused on improving fines and fees reporting. Some questions the task force could consider include: How often do DC residents fail to pay traffic or other related fines because of an inability to pay? How often do DC residents forgo living expenses to pay for fines or fees? What share of fines and fees are collected from historically marginalized populations? These, and other questions, could help stakeholders better understand the impact of fines and fees on communities throughout DC. Moreover, answering these questions will equip the Council, committee, and advocates to offer more effective and equitable fines and fees reforms.