Unpaid Court Fines, Fees Can Get Your Water Shut Off

This story was originally published by Stateline, an initiative of The Pew Charitable Trusts.

The city of LaGrange, Georgia, has a practice of shutting off the water to homes when residents fail to pay unrelated court fines or fees. In Miami Beach, Florida, an unpaid Airbnb fee similarly got the water turned off in a million-dollar luxury home. And in about 40 states, overdue traffic ticket fines can get your driver’s license suspended.

As cash-strapped cities and states look to raise revenue without increasing taxes, efforts to collect fines and fees are ratcheting up, according to the Progressive Policy Institute.

Critics say holding essential utilities or other government services over residents’ heads for failure to pay fines—including water, a necessity of life, as one court case put it—is unfair and disproportionately affects the poor, who are less likely to be able to pay.

But cities argue that the fees and fines are true obligations owed to them by residents and that pressing their advantage to get these funds is necessary and forthright.

In Florida, state lawmakers are thinking about withholding voting rights from released felons who still owe fines.

“It’s only driving those [residents] in pretty bad shape to worse shape,” said Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois, Chicago, and author of “City Budgets in an Era of Increased Uncertainty,” a Brookings Institution report. Adding fines to the billing structure for essential services, he said, sidesteps the issue of fairness in taxes and other government charges.

According to a lawsuit filed by the Georgia NAACP and others over the LaGrange water bill situation, people of color and low-income residents are disproportionately affected there.

When the lawsuit was filed, in 2016, the LaGrange Daily News reported that the city’s budget showed it collected about $1.6 million in fines and probation fees in fiscal year 2013-2014.

At the time, the city spent about a million dollars operating its court and probation department, giving it a net revenue of $600,000 from the fines and fees.

LaGrange Mayor Jim Thornton, in an email to Stateline, noted that the district court dismissed the suit on the basis that the complaint under the federal Fair Housing Act was not appropriate, and that it is on appeal to the 11th Circuit Court of Appeals.

“We certainly believe that the appellate court should affirm the dismissal,” he wrote, referring further inquiry to the city’s attorney, Jeff Todd.

Todd did not return repeated phone calls and emails asking for comment.

In Massachusetts, Charlie Harak, senior attorney at the National Consumer Law Center, a state group that works to help low-income and other disadvantaged populations, said that while his state has a program to help residents manage their utility bills, with reduced charges and payment plans, not all states offer that kind of help.

Water, in particular, is a necessity, Harak said, and he cited a Supreme Court case from 1978, Memphis Light, Gas and Water Division v. Craft, in which the court ruled that utilities are so essential that any attempt to cut them off must follow the due process clause in the Constitution.

“Utility service is a necessity of modern life,” the high court wrote, “indeed, the discontinuance of water or heating for even short periods of time may threaten health and safety.”

Airbnb Fees

In Miami Beach, the water was cut off to a luxury home in a dispute over Airbnb fees the city said it was owed. Rafael Serrano, managing director of Safe Harbor Equity, a private equity firm he founded in 2005, rented a large home to a tenant, who subsequently sublet short-term rentals there without paying the fees the city assesses on short-term rental property.

Serrano said he evicted the tenant when he learned about the Airbnb rentals. But Miami Beach still wanted $200,000 in fees and fines for violations.

When Serrano refused to pay in January 2018, the city cut off the water and electricity at the house. Serrano went to court, but it took nearly a year before a judge ordered the city to temporarily turn the water and electricity back on, meaning the house couldn’t be rented in the meantime.

On April 4, a judge ruled in Serrano’s favor and said the utilities had to stay on. But the dispute with the city over the fine goes on, he said.

“I begged them to please try to settle this in an amicable way,” he said about taking the city to court. “We are in the business of managing multiple litigations; for me it was not a big hurdle. It does pose a problem for most individuals to sue a municipality.”

Miami Beach Chief Deputy City Attorney Aleksandr Boksner initially provided a statement to Stateline saying the city was “legally justified in discontinuing water services” to Serrano’s property.

In the statement, Boksner alleged that Serrano had “continually violated the City of Miami Beach’s Land Development Regulations by engaging in the illegal transient (short-term) rental and use of the residential home.”

Following the ruling against the city, spokeswoman Melissa Berthier said in an email the city would have no further comment.

Driver’s Licenses

Cities and states go after more than just utilities when fines or fees are unpaid. According to a 2017 report, “Driven By Dollars,” by the Legal Aid Justice Center, a Virginia-based organization that represents low-income clients in legal affairs, 43 states and the District of Columbia suspend driver’s licenses because of unpaid court debt, and most of the states prohibit reinstatement of the license until the payment is satisfied.

Some states, however, are moving to end the practice. California scrapped its system two years ago. And Virginia Gov. Ralph Northam, a Democrat, inserted an amendment into the 2019 budget, which was subsequently approved by the state House and Senate, that he said would eliminate driver’s license suspensions for unpaid court fines and restore licenses to more than 627,000 Virginians. It goes into effect July 1.

“A driver’s license is critical to daily life, including a person’s ability to maintain a job,” Northam said in a press release. “Eliminating a process that envelops hundreds of thousands of Virginians in a counterproductive cycle is not only fair, it’s also the right thing to do.”

Abby Shafroth, a staff attorney at the National Consumer Law Center, said that sometimes it can be a conflict of interest for cities or counties to press for collection of fines because their own departments are funded out of those collections.

“You think the court is going to be an impartial arbiter,” she said, “but they are under pressure to keep their superiors or other colleagues in government happy.”

Voting Rights

In November, Florida voters approved a constitutional amendment referendum that restored voting rights to about a million people with felony records, as long as they fulfilled their sentence, including parole and probation.

But the new law, which went into effect in January, left ambiguous whether fines and court fees were part of that fulfillment, saying voting rights “shall be restored upon completion of all terms of sentence including parole or probation.”

Some jurisdictions have interpreted the phrase “all terms” to include payment of any fines, court fees or mandatory restitution. Other jurisdictions have not, and sponsors of the referendum argued that was not their intent.

Two bills in the state legislature, one in the House and another in the Senate, would codify the payment of fines and fees as part of new law. The bills have been referred to multiple committees in the two chambers and have passed in each, largely on party-line votes with Republicans in the majority. There are more committee votes to come before any floor action.

Florida Republican Rep. James Grant, chairman of the state House Criminal Justice Subcommittee and sponsor of one of the bills to include fines and fees in the fulfillment of sentences, said at a hearing last week that the referendum was clear that “terms of the sentence” was meant to include fines and fees.

His bill, he said, “upholds the offer that was made to the voters, that was passed. We know what the voters were told, that’s exactly what our bill does.” The bill passed the State Affairs Committee, 15-6.

But Neil Volz, political director of the Florida Rights Restoration Coalition, the group that successfully petitioned to put the issue on the ballot, said its intent was to “expand democracy, not restrict democracy,” and that fines and fees were never meant to be part of “completion” of a sentence. “The expansion of democracy is what the voters voted for,” he said.