Spotlight Exclusives

Chicago’s Abusive Fines and Fees Harm the Poor and Highlight Troubling National Trend

Kyle Sweetland and Diana Simpson, Institute for Justice Kyle Sweetland and Diana Simpson, Institute for Justice, posted on

Over the years, longtime Chicago resident Lewrance Gant often lent his car to an old friend. Now the city is punishing him for his generosity. Last March, police stopped Gant’s friend for failing to completely halt at an intersection. During the stop, police discovered the friend’s license was suspended for unpaid tickets and allegedly found a bag of marijuana. They seized and impounded Gant’s car.

Gant knew nothing about his friend’s suspended license and has never known him to use drugs. Nevertheless—and although police dropped the friend’s charges—the city is holding Gant liable for $4,750 in fines and fees for storing the car. That total includes $1,000 for his friend’s suspended license. Gant, a senior on a fixed income, is now without a car because he does not have the money.

Gant is not alone. In 2017 alone, Chicago impounded over 22,000 cars and imposed over $28 million in related fines and fees. The city refuses to release the cars until owners pay every last penny.

Yet rather than guaranteeing prompt payment, the system makes paying fines and fees more burdensome. When people fail to pay quickly enough, the city disposes of their cars—but their debt lives on. Without their cars, people who drive to work alone, as about 70% of Chicagoans do, may lose their ability to earn the income necessary to recover their cars.

As Gant’s situation shows, Chicago’s fines and fees often fall on those least able to pay. According to the Woodstock Institute, Chicago drivers from ZIP codes with low and moderate-incomes or an above-average proportion of minority residents were more likely to have unpaid tickets in 2017.

Sadly, Chicago’s impound system is a microcosm of the city’s broader approach to code enforcement. According to a recent national report, fines and fees accounted for 10.7%, or $340 million, of Chicago’s 2018 general fund revenues. While over 600 jurisdictions similarly received more than 10% of their revenues from fines and fees in 2018, the median for the 50 largest U.S. cities was just 2%.

Thankfully, city leaders are reining in some of Chicago’s unsustainable and inequitable code enforcement practices. Last September, the City Council unanimously approved Mayor Lori Lightfoot’s plans, which include ending automatic license suspensions for non-moving violations, extending grace periods before issuing tickets or towing, and providing better repayment plans.

These changes will help low-income and minority residents going forward. But they do little to help people who have lost their cars to Chicago’s impound system.

These changes also fail to address the root of the problem: Chicago’s desperate need for revenue. That need has led Chicago, like many other cities struggling financially, to see fines and fees as an easy source of revenue that comes without the political cost of raising taxes.

Besides distorting the public safety purpose of code enforcement, such “taxation by citation” may have serious long-term consequences because cities often violate people’s rights in pursuit of revenue. According to a 2019 Institute for Justice report, The Price of Taxation by Citation, although fines and fees may give cities a short-term financial boost, a reliance on this revenue may actually decrease communities’ trust in government in the long run.

The report surveyed residents of three metro-Atlanta cities that generated, on average, 14% to 25% of their revenues from fines and fees which is much higher than the 3% average across the state. Residents with recent citations reported lower levels of trust in government officials and institutions than residents without.

Some were frustrated with the court system. “The whole process itself,” one resident stated, “is designed for people to … either obtain a lawyer to handle all of the confusing work for you, or for them to pay the citation and give up.”

Others complained they were not given a meaningful opportunity to defend themselves. One defendant showed up a second time in court, hoping to this time speak with a judge and offer an explanation for why they didn’t deserve a ticket. A prosecutor told the defendant about the judge, “He’s not going to listen to you, you just have to pay.”

Whether in Georgia or Chicago, taxation by citation is wrong. It appears to damage trust, and it harms low-income and minority residents. Chicago’s reforms are an important step toward helping those hurt by fines and fees. But they are only a first step. Much more remains to be done to help innocent, impoverished citizens like Lewrance Gant who are trapped in Chicago’s impound system.

In the meantime, Gant and others like him are tired of waiting. In 2019, Gant and other victims decided to fight back, joining a class action lawsuit filed by the Institute for Justice to challenge Chicago’s abusive fines and fees.

No one doubts that cities like Chicago need revenue, but in raising that revenue they must obey certain fundamental principles: Government cannot punish the innocent or keep people’s property without a good reason. If Chicago leaders will not listen to residents’ pleas, they may be forced to listen to a federal court’s commands.

Kyle Sweetland is a researcher and Diana Simpson is an attorney at the Institute for Justice.

« Back to Spotlight Exclusives