Policy Recommendations and Future Research

6.1 Recommendations for Reform

The reform efforts surveyed in Part 5 have produced meaningful progress in a number of states, and the legislative histories examined there offer useful lessons about what works and what does not. Quota bans have proven difficult to enforce in practice, but Ohio's recent reform, which established a centralized reporting mechanism and mandatory investigation process, points toward a stronger model. Fiscal and structural reforms have addressed the incentive problem more directly, but narrow scope, weak enforcement, and persistent loopholes have limited their effectiveness in many states. Well-intentioned policies adopted in response to scandals have too often included design flaws that allow evasion, and reforms that succeed in changing behavior in the short term have frequently failed to endure once public scrutiny fades.

The following recommendations draw on these lessons to set forth a framework for more durable reform. Because the evidence reviewed in Parts 2 through 5 consistently identifies the fiscal incentive—the revenue that local governments retain from enforcement activity—as the root cause of the problems documented in this report, these recommendations are organized around that central insight. The first and most detailed recommendation addresses revenue caps, which target the incentive directly. The remaining recommendations address complementary reforms that reinforce or extend the cap's effectiveness.

#1: Adopt Comprehensive Revenue Caps with Robust Enforcement Mechanisms

The data presented in Part 4 show that while the vast majority of local governments collect minimal revenue from fines and forfeitures, 275 jurisdictions across 25 states reported fines and forfeitures exceeding $0.10 for every dollar of general revenues in fiscal year 2023. The problem is concentrated, which means a well-designed revenue cap would constrain the most problematic cases without disrupting the vast majority of jurisdictions where enforcement revenue plays an appropriately minor fiscal role.

The narrow scope of many existing caps has enabled evasion. Georgia's 35% cap on speeding ticket revenue, for example, does not prevent municipalities from generating unlimited revenue through non-speeding violations. Alabama's 10% cap applies only to traffic citations. Comprehensive caps covering all fines and forfeitures revenue are essential to preventing jurisdictions from simply shifting to alternative revenue-generating enforcement activities. States should enact revenue caps that:

Define covered revenue broadly. The most important design choice in a revenue cap statute is the definition of the revenue it covers. Existing state caps apply narrowly to traffic fines only (Alabama, Utah, and Texas), to automated enforcement revenue only (Maryland), or to fines and court costs from specific offense categories (Missouri). These narrow definitions invite evasion through reclassification and revenue-shifting into uncovered categories. An effective cap should cover all revenue that a local government receives from the operation of its criminal and civil justice systems, including:
- Criminal and civil fines and penalties;
- Court costs and fees assessed in criminal, civil, and traffic proceedings;
- Late payment penalties and interest on unpaid fines and fees; bail and bond forfeiture revenue;
- Asset forfeiture proceeds deposited into or available for use in the general fund;
- Failure-to-appear, failure-to-pay, and failure-to-comply charges;
- Revenue collected on behalf of the local government by private contractors or other units of government; and
- Any other charge, surcharge, or assessment imposed by a court or law enforcement agency that is not a fee for a specific, identifiable service provided directly to the individual paying the fee.
Revenue that the local government is required by law to remit to the state or another unit of government, restitution payments collected on behalf of crime victims, and fees for specific identifiable government services such as building permits and business licenses should be excluded.
Use general revenues as reported in audited financial statements. The denominator against which covered revenue is measured determines how easily the cap can be gamed. States should define the denominator as general revenues as reported on the statement of activities in the local government's audited annual comprehensive financial report, prepared in accordance with standards issued by the Governmental Accounting Standards Board (GASB). Under GASB Statement No. 34, revenues are classified as either program revenues or general revenues on the statement of activities. Program revenues are tightly defined to include charges for services, operating grants and contributions, and capital grants and contributions. General revenue is the residual category, capturing taxes, unrestricted intergovernmental transfers, unrestricted investment earnings, and other revenues not tied to a specific program.
Some states require local governments to prepare financial statements using a regulatory or cash basis of accounting rather than GAAP. In those states, the statute should identify a denominator that is already reported on the financial statements local governments are required to produce and that is difficult to manipulate through fund-structure decisions or other accounting choices. The appropriate choice will depend on the reporting framework prescribed within these states, but policymakers should be aware of the weaknesses of several obvious alternatives. Total expenditures can be inflated by spending funded from the fines themselves, creating a perverse feedback loop in which more enforcement revenue enables more spending and thereby raises the denominator. Total revenues that include business-type activities allow jurisdictions to pad the denominator with enterprise fund revenue from water, sewer, and other self-sustaining utility operations, a vulnerability that has been documented under Texas' existing cap. General fund revenue is gameable through fund-structure decisions, because the general fund is a reporting bucket whose contents reflect local discretion over which revenues to deposit where and which activities to account for in separate special revenue funds. Wherever possible, the statute should anchor the denominator to a figure that is determined by an externally imposed accounting standard rather than by local choice, and should require that the figure be drawn from a document subject to independent audit.
Set the cap at a ratio of $0.10 or $0.15 of covered revenue for every $1.00 of general revenues. The cap should be set low enough to meaningfully constrain the jurisdictions identified in Part 4 while remaining high enough that legitimate enforcement activity does not trigger compliance obligations for the vast majority of local governments. A cap of 0.1 or 0.15 strikes this balance. Among the 7,441 cities and counties for which fines and forfeitures revenue was identified in this report's dataset, the average ratio of fines and forfeitures to general revenues was 0.02. A 0.15 cap is roughly five times the average and would affect only the tail of the distribution.
Divert revenue in excess of the cap. Revenue above the cap should be remitted to the state for a purpose beyond the control and immediate fiscal interest of the local government from which it was collected. The specific destination matters less than two design principles:
- First, excess revenue must not be returned, redistributed, or granted back to the originating local government under any circumstances. If excess funds cycle back to the municipality through state grant programs or other channels, the cap's incentive effect is undermined.
- Second, policymakers should exercise caution in directing diverted revenue to a dedicated fund for a specific purpose that becomes entirely dependent on those funds. The cap policy is designed to alter local government enforcement and citation behavior, which means the diverted revenue stream may not be stable or reliable over time. If the cap succeeds in reducing revenue-oriented enforcement, the amount of excess revenue remitted to the state will decline. Programs funded entirely by diverted excess should be designed with this dynamic in mind, or the diverted revenue should flow to a sufficiently large existing fund where its variability will not create operational disruptions.
Mandate reporting and transparency. Each local government should be required to submit an annual certified report to a state oversight authority. The oversight authority should compile these reports into a publicly available annual summary, published on its website and transmitted to the governor and the legislature. Creating a centralized public dataset enables monitoring, research, and accountability by legislators, journalists, and the public. Reports at a minimum should include:
- Total covered revenue itemized by source category;
- Total general revenues;
- The ratio of covered revenue to general revenues;
- The amount of any excess revenue remitted; and
- A certification by the local government's chief financial officer that the report is accurate and complete.
Preserve enforcement authority. A revenue cap governs the retention and disposition of enforcement revenue, not the underlying authority to assess it. Nothing in a cap statute should be construed to limit the authority of local governments or courts to impose lawful fines, fees, forfeitures, or court costs.

#2: Strengthen and Enforce Quota Bans

As the analysis in Part 5 demonstrates, quota bans have been widely adopted but have proven difficult to enforce in practice, hampered by definitional ambiguity, broad exceptions, and the absence of meaningful enforcement mechanisms. The 2017 Pew Research Center survey finding that 37% of officers reported working under some form of quota system, despite bans being on the books in many states at the time, illustrates how far statutory prohibition can fall short of changing actual practice.

Revenue caps address the fiscal incentive that produces quota-like pressure in the first place. When a municipality can retain only a limited share of enforcement revenue, the institutional motivation to pressure officers to write more tickets is significantly diminished. Quota bans are therefore best understood as a complementary measure. Strengthening quota bans requires attending to the design features that have made existing laws ineffective. Ohio's recent reform, which established a centralized reporting mechanism, mandatory investigations, and protections for officers who report violations, offers a model worth emulating. States should:

Adopt the most expansive definitions of prohibited quotas, covering citations, arrests, and investigative stops;
Prohibit use of citation data in performance evaluations;
Establish clear enforcement mechanisms, including:
- Centralized reporting systems (modeled on Ohio's approach) where officers can report quota violations;
- Mandatory state investigations of reported violations;
- Protection against retaliation for officers who report quotas; and,
Impose meaningful consequences for violations, including potential removal from office.

#3: Eliminate Municipal Courts in Small Jurisdictions

As the research reviewed in Part 2 demonstrates, municipal courts are one of the strongest institutional predictors of fines and forfeitures reliance, with cities that operate their own courts collecting between 62% and 98% more in fines and fees than comparable cities without them. Henderson, La., profiled in Part 4, offers a stark illustration of this dynamic under Louisiana's mayor's court system, where the mayor serves as judge in the same court whose revenue funds the town's budget.

A comprehensive revenue cap addresses much of this problem indirectly by constraining the fiscal return a municipality receives from its court's activity, regardless of institutional structure. When a municipality can retain only 15% of general revenues from enforcement sources, the financial incentive to maximize court volume is substantially reduced even if the court continues to operate.

However, the structural conflict of interest inherent in municipal courts—particularly in small jurisdictions where the same officials control both the court and the budget—warrants additional attention. States should consider eliminating municipal courts in jurisdictions below a minimum population threshold, such as 5,000 or 10,000 residents, and requiring that violations be adjudicated in county or regional courts where financial independence from local governments reduces conflicts of interest.

Some may object that eliminating municipal courts would deprive small jurisdictions of revenue they depend on to fund basic operations. But the data in Part 4 show that comparable jurisdictions operating without municipal courts manage without significant fines and forfeitures reliance, and several states already prohibit or severely limit local retention of enforcement revenues without apparent harm to municipal fiscal health. Where a jurisdiction cannot sustain basic operations without revenue generated through a court it controls, that dependence is itself evidence of the problem this recommendation is designed to address.

#4: Mandate Comprehensive Data Collection and Reporting

The opacity surrounding fines and forfeitures practices has enabled abuses to persist. Many jurisdictions lack basic data on how much revenue they collect, from whom, and at what cost. The data presented in this report offer a detailed look at local fines and forfeitures revenue, but the process of assembling them illustrates why better reporting infrastructure is needed. Financial statements are not consistently compiled at the state level, are frequently published in formats that resist automated collection, and required a combination of web scraping and manual review to gather at scale. That this level of effort is necessary to answer basic questions about fines and forfeitures reliance in American cities and counties suggests that the current reporting landscape falls well short of what policymakers need. Without reliable and accessible data, it is difficult to identify high-reliance jurisdictions, assess whether reforms are working, or design policies that target the problem where it is most acute.

#5: Fully Fund Court Systems

The Conference of State Court Administrators has long advocated that courts should be fully funded from general revenue sources rather than user fees.²²² However, reform may need to go further. From the perspective of mitigating perverse incentives, there is little practical distinction between funding municipal courts through municipal general revenues or user fees when fines and forfeitures comprise the bulk of a municipality's general revenue. While significant constitutional and practical barriers may exist in some states, policymakers should work toward greater state funding of local courts over time. Intermediate steps might include:

State assumption of costs for specific court functions;
Matching grants that reduce local dependence on court revenue; and,
Elimination of the most problematic fee categories.

#6: Build Rigorous Evaluation into Reform Legislation

Most existing research on fines and forfeitures is descriptive or relies on observational methods. As a result, it is difficult to determine with confidence whether existing caps, quota bans, and reporting requirements have actually changed enforcement behavior, reduced fiscal dependence, or improved public safety outcomes.

States enacting revenue cap legislation should include a statutory requirement for an independent external impact evaluation using rigorous research methods. The evaluation should employ experimental or quasi-experimental designs (such as difference-in-differences, instrumental variable, or regression discontinuity approaches) that allow for the strongest possible causal inferences about the effects of the legislation on local government finances, law enforcement practices, and public safety outcomes. The evaluator should have access to all data necessary for a rigorous assessment, should be selected through a process that ensures independence from the agencies being evaluated, and should submit findings to the governor and legislature within a defined timeframe, such as three years following the effective date. The evaluation report should be published on a publicly available website. Building the evaluation requirement into the statute itself ensures that the evidence base for future reform is generated systematically rather than left to the discretion of future appropriators or the availability of academic researchers.

6.2 Directions for Future Research

While this report provides a considerable contribution to understanding the scope and distribution of fines and forfeitures reliance across American cities and counties, significant gaps in knowledge remain:

#1: Causal Effects of Reforms

Most existing research is descriptive or relies on observational methods. Rigorous evaluation of reform impacts using experimental or quasi-experimental designs would strengthen the evidence base. Key questions include:

Do revenue caps reduce total fines and forfeitures revenue, or do jurisdictions evade them?
How do various enforcement mechanisms affect quota ban effectiveness?

#2: Costs of Collection

Jurisdictions rarely conduct cost-benefit analyses of fines and forfeitures collection. Research should attempt to quantify:

Full costs of collection including law enforcement, court, and incarceration costs;
Net revenue after accounting for collection costs; and
Opportunity costs of law enforcement time devoted to revenue-generating enforcement.

#3: Unintended Consequences

As reforms are implemented, careful evaluation should identify any unintended effects, such as:

Displacement to other enforcement activities or revenue sources; and
Potential negative fiscal and public safety impacts of eliminating municipal courts.