Taxation by Citation: What cities rely heavily on fines and forfeitures?

A trend in Georgia among several fine-prone cities is also taking place in Mississippi among three cities heavily dependent on revenue from fines and forfeitures.

A recently released report by the Institute for Justice spotlighted how three Peach State cities have become dependent on fines for a larger chunk of their revenues.

Three Georgia cities — Morrow, Riverdale and Clarkston — had large jumps in terms of real dollars and percentage of revenue from fines, which can include traffic citations and code enforcement after the recession in 2009. All three also had concurrent drops in other revenues as city officials tried to use fine income to fill the shortfall.

A similar trend in Mississippi has unfolded with three of the top cities statewide in — State Line, Walls and Magee — terms of fines and forfeitures per resident. The Mississippi Center for Public Policy analyzed data from the Mississippi state Auditor’s Office and found that all three had substantial increases both in terms of percentage of revenues and total dollars in the last decade from 2008 to 2017. 

State Line and Walls both had substantial drops in revenues outside of fines and forfeitures since 2008, while overall revenue in Magee has increased since 2008. Magee is a popular stopping point on Highway 49; State Line and Walls aren't as conveniently located.

State Line (population 539) is in both Greene and Wayne counties and has the highest amount of forfeitures per resident at $240.41 per resident as of 2017.

The city’s percentage of revenue from fines and forfeitures has increased in recent years.

In 2003, the city had $1,062,594 in revenue, but only $25,371 in fines and forfeitures, which represented 2.39 percent of the city’s revenues.

The biggest jump happened from 2008 to 2015. In 2008, nearly seven percent ($35,289) of the city’s $504,774 in revenues came from fines and forfeitures. By 2015, the total revenues for State Line dropped to $302,748, with $90,710 in fines and forfeitures making up a startling 29.96 percent.

In the first five years of reports, State Line averaged $722,375 in annual revenues and $33,853 from fines and forfeitures, an average of 5.63 percent. 

Now the city gets a larger chunk of its revenue from its court system as tax collections have fallen. In the last three years from 2015 to 2017, the city’s revenues have decreased to an average of $361,427 with fines and forfeitures averaging $96,645. On average, fines and forfeitures have accounted for 26.34 percent of the total revenues.

Fines and forfeitures in State Line, Mississippi

Walls is a town of (1,379 population) in DeSoto County and was ranked first in a recent study by Governing magazine which rank cities and towns nationwide on the amount of their budgets coming from fines and forfeitures. Walls ranked second with 26.53 percent of its general fund budget from fines and forfeitures in 2017. It was 19.5 percent for all revenues, including the utility fund. 

Except for one outlier in 2006, when fines and forfeitures made up 19.32 percent of the city’s budget, the percentage of city revenues dependent on fines and forfeitures was in single digits. 

In 2013, the percentage of the city’s revenues ($941,915) sourced from fines and forfeitures ($152,788)crossed the 15 percent threshold and hasn’t gone lower since.  

Fines and forfeitures in Walls, Mississippi

Magee was third, with its $595,238 in fines and forfeitures in 2017 adding up to $141.89 for each one of its 4,195 residents. This accounted for 12.5 percent of the Simpson County city’s $4.7 million in revenues in 2017.

In 2008, 7.06 percent of the city’s $4,224,745 in revenues came from fines and forfeitures ($298,430). By 2017, both the percentage (12.5 percent) and in total dollars ($595,238) doubled or had nearly doubled in just nine years.

Fines and forfeitures in Magee, Mississippi