Travis County and the City of Austin take part in a regular fiscal dance with the State of Texas over who pays the costs of government. Over the next three days, KUT News and the Austin Monitor will look at key examples of that interaction in our series, “The Buck Starts Here.” Today, we take on Austin’s Municipal Courts.
When Austin residents are handed traffic tickets or other Municipal Court fees and fines, they likely assume that the city is profiting handsomely from those often colorful sheets of paper. If they could see where those revenues go, however, they might come to a different conclusion.
In fact, the city’s current budget projects that the court will face a roughly $3.7 million shortfall in the fiscal year that started in October by incurring about $19.7 million in general expenses and pulling in about $16 million in general revenue. On top of that, it projects that the court will fall short in three of its special revenue funds and break even on the fourth.
Though there are many reasons this might be happening, one view among those involved is that the Texas Legislature has made it difficult for municipal and county courts to balance their budgets by tasking them with administering certain fees and sending the bulk of the revenue back to the state. In many cases, the court keeps only between 5 to 10 percent of the fees it collects.
Mayor Steve Adler told the Austin Monitor and KUT News that he believes the situation is “a pretty good example” of an unfunded mandate, or a requirement that one government imposes on a smaller one without budgeting adequate money for implementation.
“We have a system that's been set by the state, and the state takes its share and leaves us to do a program with less funds than what the program costs,” Adler said. “We have to cover that shortfall with other revenue.”
Noting that the city's main sources of revenue are sales and property taxes, Adler said that the fee system is, in part, “one of the reasons why people's property taxes are at the level that they are at.”
A 2014 study of court costs and fees in Texas that was directed by the 83rd Legislature and carried out by the Office of Court Administration, or OCA, indicates that the state government is in a more enviable situation than local governments.
“Most court fees and costs end up being transmitted in whole or in part to the state,” the report reads. “On the other hand, court fees and costs are generally insufficient to cover the cost of funding the judiciary at the local government level, with expenditures for the judiciary oftentimes far surpassing collected revenues from court fees and costs.”
The Municipal Court is in charge of administering Class C misdemeanors, which include both city and state offenses. Most of the revenue the court collects goes to the city’s general fund, which is also its primary funding source. Revenues from certain fees go into special revenue funds that the city can access for specific purposes, such as juvenile case management.
According to its most recent annual report, the court made more money on traffic tickets than any other source of revenue in the last fiscal year, hauling in about $6.9 million, or 42 percent of the revenue it contributed to the city’s general fund. The court’s next top source was parking tickets, which comprised $3.4 million, or 20 percent of its general revenue.
When individuals receive those tickets, however, they’re generally not told what they’re being required to pay for.
When the Monitor requested the breakdown of a “typical” speeding ticket, the court provided the fees and fines it assesses for speeding in a 30 mph zone. The ticket consists of a laundry list of set fees, some of which the state has mandated and some of which the city has adopted, along with a municipal “base fine” that goes to the general fund and is determined by the driver’s speed.
According to OCA Assistant General Counsel Ted Wood, a fine differs from a fee in that it is a punishment that a judge sets within a certain range prescribed by the Legislature. Fees, also known as court costs, are not punitive and are meant to recuperate court costs. Typically, judges cannot waive or change court costs.
The set fees total $103.10, of which $76.39 goes to the state and $26.71 goes to the city for various purposes. The base fine ranges from $41.90 to $171.90 for driving between less than 5 mph to more than 25 mph over the speed limit. A driver caught going 39 miles per hour, for example, would receive a $165 ticket.
The two most substantial state-mandated fees in the ticket are a $40 “consolidated fee” and a $30 “state traffic fee.” The state gets 90 and 95 percent of these, respectively, and the city gets what is left over.
It is likely that the consolidated fee, listed in the OCA report as the “consolidated court cost,” generates substantial revenue for the state. It applies to all felonies at $133, all Class A and B misdemeanors at $83 and all “non-jailable misdemeanor offenses … other than a conviction relating to a pedestrian or the parking of a motor vehicle” — such as speeding tickets — at $40.
According to the report, the consolidated court cost is allocated to 14 places in the state budget. The top three destinations, based on the percentage of revenue they receive, are the compensation to victims of crime fund, the criminal justice planning account in the general revenue fund, and the law enforcement and custodial office supplemental retirement fund.
About two-thirds of the state traffic fee, listed as the “state traffic fine” in the report, goes to the state’s general fund, while the remainder is earmarked for trauma and emergency medical services funding. In certain cases, surplus revenue will go to the Texas Mobility Fund.
The OCA notes in its report that it and the Texas Comptroller of Public Accounts treat the state traffic fine as a fee, despite the ambiguity of its name.
Harris County Public Defender Jani Maselli Wood, who happens to be married to Ted Wood, has challenged most of the fees that make up the consolidated court cost in a case called Orlando Salinas v. the State of Texas. It is pending at the Texas Court of Criminal Appeals, the state’s highest court for criminal matters.
Maselli Wood the Monitor and KUT that she believes the fees she has challenged are not going to the courts — or even the judiciary — and are therefore unconstitutional. She went on to argue that many state-mandated court costs and fees may be regarded as “hidden taxes for people who are convicted of offenses, including Class C misdemeanors.
Others might argue in favor of the consolidated court costs and say that criminals should be obligated to carry their weight as far as funding the criminal justice system. From that perspective, requiring a resident charged with a crime to chip in to the compensation to victims of crime fund may be considered reasonable. Whether it is constitutional, though, will be up to the courts to decide.
Regardless, the system has a clear financial impact on the Municipal Court. According to data it provided to the Monitor, the court collected about $30.3 million in gross revenue and bonds during the last fiscal year and submitted about $9.3 million of that to the state. It also allocated about $2.1 million to other agencies “as required by law and contractual obligations.”
These other agencies, according to the court, include the Texas Comptroller of Public Accounts, the Texas Parks and Wildlife Department, the Austin Independent School District, the city’s school crossing guard program, a collections company called the Municipal Services Bureau and a database company, Omnibase.
In state fiscal year 2013, which started in September 2012, the OCA report says that “court cost and filing fees generated over $408 million in revenue deposited to the state, while the total Article IV general revenue and general revenue-dedicated appropriations in that same fiscal year were just under $219 million.”
Article IV of the Texas Constitution refers to the state’s executive branch.
Though this is not necessarily an apples-to-apples comparison, Adler commented generally on the revelation. “The state is able to get a surplus that it can then put into its general fund to put into other things,” he said. “I wish the city were in that position.”
Though city budget data for fiscal year 2013 does not match up perfectly with current figures because of a switch to a new accounting method, the budget shows that the Municipal Court made $2.6 million that year, incurring about $13.9 million in general costs and taking in about $16.4 million in general revenue.
Staff wrote in the budget that the accounting change was intended “to provide a more complete picture of the true costs for each department and to bring the City of Austin in line with budgeting practices of other municipalities.” If that is the case, costs in fiscal year 2013 were likely higher than what was reported.
Of course, the Austin Municipal Court is not the only one in the state that is on the hook for revenue. According to the Texas Municipal League, an association that lobbies on behalf of cities in Texas, municipal courts collected over $229 million in what it refers to as “state fee/fine revenue” in 2013. County courts also must submit revenue to the state.
Reform efforts are underway in the Legislature. The same law that directed the OCA report — Senate Bill 1908, filed by Sen. Royce West (D-Dallas) — led West to file SB 287 in order to eliminate certain court fees and costs that have been deemed unnecessary. It has been engrossed in the Senate and sent to the House.
House Bill 1516, filed by Rep. Armando Walle (D-Houston), would require that an individual charged with a court cost receive an itemized bill before having to pay. It is currently pending in the House Criminal Jurisprudence Committee.
Maselli Wood said she was planning to testify in favor of the bill at its hearing on April 8. “There's no transparency in government to get an itemized cost bill,” she said.
“If people were aware of it, they could talk to their own legislators and say, ‘Look, why am I being charged this consolidated court cost when I got a traffic ticket and paid through the mail?’” she continued. “There would be more rumbling if people knew exactly what they were paying.”