Introduction

Local governments across the United States collect substantial revenues through law enforcement in the form of court-related fines and forfeitures. While monetary penalties serve legitimate purposes in the criminal justice system, their use becomes exploitative when governments rely on law enforcement and courts as essential revenue sources. Dependence on such revenue creates fundamental conflicts of interest that undermine public safety and erode public trust in law enforcement.

When local governments become dependent on fines and forfeitures to fund operations, police departments and courts inevitably face pressure to prioritize revenue generation over public safety. This misalignment of incentives was starkly illustrated by the U.S. Department of Justice's investigation into practices in Ferguson, Mo., in 2015, which found that city officials routinely pressured police to increase citation revenue, fueling a pattern of unconstitutional policing. Similar dynamics have emerged in jurisdictions across the country, from Brookside, Ala., to Mantua, Utah.

Research demonstrates that these financial pressures produce measurable changes in enforcement behavior. Studies show that local governments significantly increase traffic citations following revenue shortfalls and that jurisdictions collecting higher percentages of revenue from fines and forfeitures have lower crime clearance rates. When police resources are diverted toward revenue generation, other priorities suffer.

Despite widespread awareness of these problems and decades of legislative reform efforts, revenue-oriented policing has proven remarkably resistant to change. Notorious speed traps have time and time again been shuttered by state authorities only to reconstitute themselves. About half of states have enacted bans on police quota systems, but definitional problems, ample loopholes, and enforcement challenges have left enforcement behavior largely unchanged.

Most reform efforts to date have responded to scandals with one-time enforcement actions or temporary penalties, which may succeed in changing behavior in the short term but leave intact the fiscal structures that make enforcement revenue attractive in the first place. When the scrutiny fades, the incentives remain, and jurisdictions return to familiar practices. Durable reform requires understanding the scope and distribution of fiscal dependence on enforcement revenue and designing policies that change the underlying incentives. This report aims to contribute to both objectives.

Part 2 reviews existing research on how financial pressures influence law enforcement behavior, examining both anecdotal evidence and peer-reviewed studies on traffic enforcement, resource allocation, and the role of institutional factors like municipal courts.

Part 3 presents state and national estimates of fines and forfeitures revenue drawn from Census Bureau data, which offers broad geographic coverage and consistent methodology across governments but cannot reliably identify specific high-reliance jurisdictions at the local level.

Part 4 addresses that limitation directly, presenting novel local government-level data based on Reason Foundation's analysis of audited financial statements from 8,054 cities and 2,478 counties. The analysis identifies 275 local governments across 25 states that collected more than $0.10 in fines and forfeitures for every dollar of general revenues in 2023. Complete financial statements for these local governments are made available through interactive maps.

Part 5 examines state-level reform efforts, analyzing police quota bans, revenue caps, threshold-based investigations, and reporting requirements across multiple states; assesses the design features and effectiveness of these multiple approaches; and sets forth legislative histories and practical impacts.

Part 6 concludes with policy recommendations and identifies critical gaps in knowledge that future research should address.