Michigan’s Debt Penalty: Will Ending “Driver Responsibility” Fees Help the State’s Poor?

By: Bridget Clerkin October 13, 2017
Efforts are underway in the Michigan legislature and courts to tear down the state's "driver responsibility" fees, which are hurtful to poor motorists.
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Forgiveness isn’t always easy, but Michigan seems ready to offer some to its drivers.

Great Lakes State legislators are considering a new bill that would relieve more than $634 million of outstanding debt for its residents.

The monumental sum has been incurred by motorists over the past 14 years, through the collection of “driver responsibility fees”—additional fines tacked on by the state to a range of traffic tickets, and funneled directly into its coffers.

If passed, the measure would do away with the program by 2018 and could help correct a cycle of poverty years in the making, in which a driver loses his or her license if they fail to pay the hefty fine. Then, they must face the choice of risking additional—and costlier—citations in order to drive to work to pay off the debt, or finding a new, more commutable job.

That arrangement has proved a lucrative one for the State of Michigan, which is projected to collect nearly $20 million from the fines this year alone, according to numbers compiled by the Detroit Free Press.

Despite that impressive cash flow, many in the state House of Representatives are ready to let the fines go.

The proposed legislation would provide amnesty to the hundreds of thousands of drivers (345,000 at last count, according to the Free Press numbers) who still owe on the fees, as well as reinstate a community service option for those who can’t pay—and reinstate license eligibility for those affected by the “responsibility” program. (The bill also creates different paths for drivers to get back their licenses in the future, including through district court sobriety programs.)

But even though the new law extends an expensive olive branch to Michiganders, will it be enough to buy back their well-being?

On Your Best Behavior

First adopted in 2003, the driver responsibility fee program was initially sold as a way to deter criminal activity on Michigan roads by adding some financial pain to the process of getting pulled over.

The system lays out a schedule of fees associated with different traffic citations. Penalties start after a driver acquires 7 points on his or her license, an occasion worth a one-time fine of $100. But as the violations escalate in severity, so do the fees. Drunk driving (designated as Operating While Intoxicated [OWI] in Michigan) constitutes a $500 penalty for two consecutive years, while the most serious incidents—typically those resulting in injury or death—run up to $1,000 per year, for two years.

The costs are imposed on top of all the regular fines, fees, and penalties called for by the citation in question—and are deposited into the state’s general fund, to the tune of up to $115 million per year, according to the Free Press numbers.

The influx of cash came at a crucial time for the state, which housed the country’s highest unemployment rate in October 2003, and was facing down a $1.6 billion budget gap. (A study prepared for the state by The Urban Institute analyzing the ensuing budget crisis notes that “assessments on bad drivers,” along with the elimination of certain tax breaks, were responsible for adding $110 million to the Michigan general fund in 2004.)

The idea was immediately unpopular with drivers, and that feeling was soon mirrored in the state House. Even former state Senator Jud Gilbert (R-Algonac), who had first introduced the measure, eventually admitted “it seemed like it was all about the money.”

The state has slowly started to disassemble the program in the ensuing years, passing legislation in 2011 and 2014 that lifted financial penalties from certain citations and allowed some low-level offenders to participate in community service to pay off their debt, respectively. The ladder bill also called for a phasing out of the fees by 2019. (The current measure up for debate would move that deadline even closer.)

Still, over its 14-year run, the program caught more than a million drivers in its web, some of whom are still suffering from its devastating effects.

Once Bitten, Twice Screwed

The most enduring criticism of the fees is that they’re a form of double jeopardy, punishing a driver twice for the same incident. And the price of not paying is the loss of a license.

Michigan is an especially unfriendly place for driver license suspensions, with its policies on the matter recently ranked in the top 5 harshest in the country. (Delaware, Virginia, Maine, and Florida took the other top spots.)

Unlike other states, Michigan makes a license suspension mandatory for those who miss court payments, sets no time limits for the duration of the penalty, and doesn’t take financial status or ability to repay debt into account when handling a license suspension case. (Restoring a license also requires an additional fee.)

Large fines and license loss spring the classic trap of needing a job to pay off the fees—but needing a license to maintain the job.

Further complicating the matter for many is Detroit’s (the state’s most populous city) spread-out cosmopolitan map, making a carless commute exceedingly tricky for any license-free residents. In 2010, the city was the nation’s most decentralized metropolitan area, with just over 77% of the region’s jobs located 10 to 35 miles outside its “urban core,” a report by the Brookings Institute found.

The twin penalties of large fines and license loss often spring the classic trap of needing a job to pay off the fees—but needing a license to maintain the job. And getting caught driving with a suspended license generates its own hefty fine, perpetuating the cycle even further.

Yet even as they entrap drivers, such systems pigeonhole states desperate for ways to plug budgetary holes, appearing as enticingly reliable sources of income where few other stable opportunities may be found.

But are they disproportionately balancing their books on the backs of the working poor?

The Right Side of History

While driver responsibility fees will soon fade away, Michigan motorists will still have to contend with debt-generated license suspensions—but that policy, too, could change.

Enough residents of the Wolverine State felt discriminated against by the practice to bring a class-action lawsuit against Michigan this spring. In it, attorneys for the people have argued that the state was violating their clients’ “guarantee of fundamental fairness” and running a “wealth-based scheme” to “trap our most vulnerable citizens in a vicious cycle of poverty.”

Various documents obtained for—and included in—the lawsuit also seemed to suggest the existence of a penalty vortex. In fiscal year 2016, they show, fines collected for driving on a suspended license in Michigan generated $26.7 million—or about half of the total driver responsibility fees that year. A majority of those illegally behind the wheel had lost their driving privileges to begin with after failing to pay off court fines and responsibility fees, which were frequently related to non-dangerous offenses.

All told, the state has revoked the licenses of more than 100,00 residents in the last 3 years due to the inability to pay for court costs and fines, the lawsuit says. (And Michigan is far from the only state to institute such liberal suspension practices. In 2006, almost 40% of license suspensions nationwide stemmed from “social non-conformance” offenses, such as unpaid traffic tickets, missed child support payments, or drug possession, according to a review by the American Association of Motor Vehicle Administrators.)

Together, the cascading penalties equate to the “loss of the right to travel” in Michigan, the suit alleges—a damning condition in a world that favors highway travel, meandering suburbs, and personal transportation over train tracks, bus schedules, and mixed-use neighborhoods.

While the suit is still ongoing, a win for the Michigan residents could force the birthplace of the modern automobile to reevaluate who, exactly, has the right to drive one.

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