A Federal Reserve Bank of Saint Louis working paper concludes that cities abuse their use of traffic tickets to make up for declining local tax revenues.

Economist Thomas A. Garrett and University of Arkansas at Little Rock Professor Gary A. Wagner explain that although there is ample anecdotal evidence to show that this is the case, no empirical studies have ever examined the question in detail.

Using county-level data from North Carolina between 1989 and 2003, the working paper analysis takes into account demographic factors such as population and traffic growth that could influence the number of tickets written for offenses such as speeding, failure to yield and following too closely. Some counties issued as many as one ticket for every resident, while the average was closer to one ticket for every ten residents.

Garrett and Wagner found that for each one-percent drop in local government revenue there followed a .38 percent increase in the number of tickets written, each worth between $5 and $250. When local revenue increased, however, there was no corresponding decrease in the number of citations issued.

"The fact that local governments increase traffic tickets during periods of revenue decreases but do not decrease traffic tickets in response to revenue increases reveals some degree of revenue maximization on the part of local governments," the authors concluded.

The following is a Press Release issued by TixNix.com

TixNix.com announced today that it strongly endorses new research just published by the Federal Reserve Bank of St. Louis. This new study shows a direct correlation between shrinking sources for municipal revenues and an increase in the issuance of traffic tickets. As the leading online attorney search center for professional and private motorists, TixNix.com fully supports the conclusions of this new research.
The study, authored by Thomas Garrett of the FRB and Gary Wagner of the University of Arkansas at Little Rock, concludes that local governments often use traffic tickets as a means to enhance revenues during difficult economic times. These revenue enhancements are rarely rolled back, however, upon a change in economic fortune, the study found.

Upon release of the FRB study, Michigan defense attorney Mark Freedman said that he long suspected that traffic tickets served more of a revenue purpose than the strict enforcement of traffic laws.

"This is the first study I know of that actually uses real-world data to show a direct statistical correlation between traffic ticket citations and declining municipal revenue sources." Freedman, who specializes in traffic ticket defense continued, "I’ve seen anecdotal evidence of this tendency over the 13 years I’ve been fighting traffic tickets, but the new FRB research provides the first hard and credible data for this practice."

Steve Ehrenreich, creator of TixNix.com, found no surprises in the Federal Reserve study. He went on to say that "drivers are beginning to wake up to the fact that many traffic tickets are just nuisance penalties and really have nothing to do with public safety at all."

Ehrenreich has seen a large increase in his business because drivers today are more willing to fight this trend in local government finance. "As the most popular online site for fighting traffic tickets, we have seen triple digit growth in our traffic ticket inquiries." Ehrenreich cautioned, however, that "truckers, CDL holders and other professional drivers are particularly alarmed by this form of revenue enhancement by local governments."

Garrett and Wagner’s research is a breakthrough in many ways in that it is the first study to use actual empirical evidence to calculate the relationship between the health of a local economy and the amount of revenue that local government generates from traffic tickets.

In their endeavor to provide a rigorous analysis of this relationship, Garrett and Wagner controlled for registered vehicles per capita, population density, age of driving population, political awareness of the residents and tourist activity in the local area. The study used data accumulated over more than a dozen years in the localities covered by the study.

In the end, the Federal Reserve study states that the relationship between the need for local revenue and the issuance of traffic tickets is not a symmetrical relationship.

While there is a positive correlation between the issuance of traffic tickets and the need for additional revenue sources during recessionary times, the issuance of traffic tickets does not seem to decline (as you might expect in a symmetrical relationship) during more expansionary economic times. Hence, the researchers termed this correlation an asymmetrical relationship.

In other words, traffic ticket issuance is not just used to smooth out revenues for local governments, but is actually used as a "revenue maximizer" for local governments. The issuance of traffic tickets ratchets up, but it rarely ratchets back down. In many areas of the country, traffic tickets are the highest revenue producers for cash-starved local governments. Many attorneys call this practice a hidden tax.

"Moving violations are inconsistently enforced from city to city and county to county," says Aaron Cohen, a criminal defense attorney with multiple offices in Florida. "The fact that local enforcement of traffic laws is so erratic, and even contradictory, indicates that traffic ticket fines provide an actual alternate revenue stream for local jurisdictions, and they go beyond just penalizing moving violations. Traffic fines have become one more way for local governments to balance their budgets."

Steven Owsley, a Houston criminal defense attorney who handles a large number of traffic ticket cases throughout Texas, responded to the newly-released study by saying, "The number of cases I see seems to have more to do with the health of the local economy than to population growth, number of vehicles on the road or any other factors that you might think would matter. In my opinion, traffic ticket issuance is primarily used to enhance city and county revenues."

In a study published by the Houston Chronicle, traffic violations in Houston accounted for 84.4% of all municipal court cases. Moving violations contributed 83% of these traffic cases, and the rest were parking tickets.

Moving violation cases have been increasing annually, while parking ticket revenues have remained steady from year to year. Traffic ticket cases grew at a rate far greater than could be explained by rising population or increase car registrations in the city, according to the Houston Chronicle study.

"We’ve known for years that local officials have a difficult time raising taxes because their constituents won’t stand for it," said Paul Massa, whose Louisiana practice is primarily traffic ticket defense. "Issuing traffic tickets allows local officials to raise revenue without raising taxes." In fact, Massa noted, "most traffic ticket fines are really just an unregulated and unlegislated tax on drivers."

TixNix.com provides traffic ticket fighting services to professional drivers and private motorists from coast to coast. TixNix.com attorneys are currently available in 39 states, including Texas, California, New York, Colorado, Iowa, Pennsylvania, Georgia, Louisiana and Florida.