The state of California is finding that the business model of relying on drivers to break the law in order to fund the state budget, fails miserably when drivers fail to break the law and cannot be slapped with exorbitant fees and fines.
California’s state budget currently relies on more than $450 million from penalties and fees collected from drivers who have been charged with both criminal and traffic violations. However, while trusting drivers to break the law at a rate that would sustain the state’s massive budget worked for a while, the strategy is now causing the state to go bankrupt.
A summary from the California State Auditor, as reported by Courthouse News, revealed that the revenue collected from citations “has decreased from 39 percent to 25 percent over the last three years as the number of criminal citations filed has decreased.”
The audit claimed that California is now facing a “significant financial burden,” which stems from a disconnected system that “lacks a systematic strategy.” In addition to drivers receiving fewer citations from police officers, the report found that a number of drivers who are cited never pay their fines, even when they accumulate substantial late fees.
As an Op-Ed from the Sacramento Bee noted in January, California is known to have some of the highest traffic fines and fees in the United States, and the drivers who are given citations often face a financial burden that can send them spiraling into debt:
“California has among the highest traffic fines and fees in the country—and the steepest consequences for traffic violations are reserved for those who can’t afford the fines and fees. This results in crippling debt for the least fortunate Californians, from whom traffic courts have difficulty collecting any fees at all.
According to the Federal Reserve, nearly half of American households cannot afford $400 in unexpected costs. Yet in California, if a family misses a payment on a traffic fine, they can be slapped with a $300 late fee, raising the cost to as much as $500 for a ticket. That can be followed by a suspended driver’s license or jail time, even for non-safety related violations, such as late registration. Of course, this makes it less likely they can pay the fines.”
Courthouse News reported that traffic cases represented the overwhelming majority, “approximately 82 percent on average, of all criminal case filings in the state from 2014 to 2016,” and that the audit report recommends “eliminating the use of penalty and fee revenue as funding sources for state and county programs,” based on the fact that the revenue collected through citations is often “unrelated to the needs of the state and county services.”
“The Legislature should reconsider the entire penalty and fee structure (criminal and traffic), decide whether to adjust or eliminate penalty and fee amounts, and whether to distribute the resulting revenue differently,” the report concluded.
If a business was facing the same problems the state government in California is facing right now, it would likely look for ways to cut its budget, in order to reduce the deficit from the decrease in revenue. However, because this is a state government—and a large, liberal state government, at that—California will likely look to increase the revenue it receives through taxes, in order to keep the same budget.
As a result, the residents of California who have followed the law and have not received any traffic citations will find themselves funding the state’s massive budget anyway, through increased taxes that are imposed upon them against their will.
The high taxes from the states, combined with recent changes to the federal tax law—such as putting a $10,000 cap on the deduction for state and local taxes—are likely to force some high-income residents in California and New York to seek refuge in states like Texas, Arizona, and Nevada.
An Op-Ed from the Wall Street Journal noted that California and New York have lost a total of 2.2 million residents since 2007, and that number is expected to grow by as many as 800,000 people within the next three years:
“In places like California, where the top income-tax rate exceeds 13 percent, that tax could be deducted on a federal return. Now that deduction for state and local taxes will be capped at $10,000 per family. Consider what this means if you’re a high-income earner in Silicon Valley or Hollywood. The top tax rate that you actually pay just jumped from about 8.5 percent to 13 percent. Similar figures hold if you live in Manhattan, once New York City’s income tax is factored in. If you earn $10 million or more, your taxes might increase a whopping 50 percent.”
While many Republicans celebrated the new tax bill and the mainstream media referred to it as “the most extensive rewrite of the tax code in a generation” when it was signed into law in December 2017, former Texas Congressman Ron Paul called out the government for celebrating tax cuts, without actually cutting taxes.
“Once again, under the guise of ‘tax cuts,’ everyday Americans will be hammered with even HIGHER taxes. Sleight-of-hand and slick marketing are about the only things that governments do very well,” Paul wrote on Facebook.
The current status of the state government in California serves as a reminder that the government’s ultimate goal is to extract revenue from you in order to fund its interests. When that cannot be accomplished by making you pay a large fine for running a red light, exceeding the speed limit, or possessing an “illegal” plant, the government will then turn to raising the taxes you are forced to pay on the goods, services, and housing that are necessities in your life, in order to achieve its original goal.