The High Cost of Being Poor: Financial Justice for All

The issue of fines and fees has, until recently, not been one that claimed too much of my attention. I got hit with my share when I was younger, of course — and they hurt — but I found a way to pay and put them behind me.

More recently, I returned to my car just in time to watch it get towed away. I had parked in a yellow zone for five minutes while dropping my son off at daycare. I reclaimed it from the impound yard almost immediately, but parking in the wrong place at the wrong time cost me nearly $500.

Again, as angry as I was, I could and did pay the fine — but what if I didn’t have $500 to spare?

What if I needed my car to get to work and couldn’t afford to retrieve it from impound? I’d not only lose my job for lack of transportation but also watch helplessly as the impound fees compounded. Costs for which I would remain responsible, even if they exceeded any ability of mine to ever repay.

Situations like these come about every day, in every city in America. While many people will grumble and pay the fine, others — many, many others — simply can’t. And because they can’t, they end up owing more, not less.

That’s the way our world works, even though it makes no economic sense.

The Weight of Unpaid Debt

Fines and fees can be particularly devastating for those caught up in the criminal justice system. Booking fees, probation fees, ankle monitor charges — these all add up. If you can’t pay, then they trigger more fines. Maybe you lose your driver’s license or right to vote. Your wages may be garnished up to 65%. Maybe you can’t pay bail, so you lose your job.

Compounding all this is the sense of shame. Consider the example of child support payments. If you’re a non-custodial father paying child support, and your ex-partner qualifies for and receives government benefits, your child support payments don’t even go to your child. They, instead, go to the government to repay your ex-spouses benefit debt.

Your contributions become practically worthless to your own children. In California, more than 70% of child support debt is owed to the government, not to the child or their family.

One woman told me her father was struggling to pay for his cancer treatment, but couldn’t make ends meet because he was still making child support payments for her — payments which went directly to the government. She told me “He’s going to die with this debt.”

If you can’t support your kids, you’re more likely to withdraw from their lives. Then, if your kids don’t have your financial support, they’re less likely to have what they need to get ahead. All because of fines and fees that the government will never recoup anyway.

The government holds on to an endless negative balance sheet of debt. In San Francisco, a study showed of the $15 million in criminal justice fees accumulated over six years only about 17% ever got collected — even with six-years of wage garnishment and attempted collections. In some other counties, studies have shown these fees can actually cost more to collect than they generate in revenue. They are primarily charged to low-income people who cannot afford to pay, keeping them from getting back on their feet.

We’re ruining lives demanding money we know we won’t — and can’t — collect.

It is time for this to change.

Introducing the Financial Justice Project

San Francisco’s Financial Justice Project — the first of its kind in the country — assesses and reforms how fees and fines unintentionally push people into poverty and make government a driver of inequality.

The Project began as a declaration of intent, published as an op-ed in the San Francisco Chronicle, as written by San Francisco Treasurer José Cisneros in 2016.

Treasurer Cisneros acknowledged that solutions exist that would work better for both government and for low-income people. He said:

“I know San Francisco can do better. We need to hold people accountable, but do so in a way that is fair and just, and does no lasting harm.”

We knew he was right.

The Walter & Elise Haas Fund stepped forward to support the Financial Justice Project’s launch in 2016. Then, we joined Tipping Point Community in funding the Project’s first pilot study, which is investigating the results of forgiving fathers’ child support debt to the government, so that all future payments go to support the child. This study looks at how forgiving child support debt actually benefits children’s’ wellbeing and increases parental employment earnings — which ironically ends up saving the government money.

Today, the Financial Justice Project — housed in the Office of the San Francisco Treasurer and led by Director Anne Stuhldreher— is advancing on multiple fronts. It works with community organizations, advocates, city and county departments, and the courts to enact reforms that result in meaningful change for low-income San Franciscans.

In May, the San Francisco Board of Supervisors voted unanimously to eliminate all local administrative fees charged to people exiting the criminal justice system. Last week, those fees were also waived retroactively, forgiving the debt of about 21,000 people. The SFMTA Board also voted to reduce towing fees for those earning below 200% of Federal Poverty Line. These were all initiatives of the Financial Justice Project brought to fruition in collaboration with community and government partners.

These only-in-San Francisco changes are catching on, too. A statewide coalition looks to spread the elimination of criminal justice administrative fees across California. And the Harvard Kennedy School named the San Francisco Financial Justice Project as one of seven finalists for its prestigious — and influential — Innovation in American Government Award.

Where We Go from Here

The changes that have already taken place in San Francisco — and which are spreading nationally — are significant. They’re going to change the course of lives. But this process and this work is only getting started.

The philanthropic community and the community at large can both help amplify the work of the Financial Justice Project. Awareness of policy changes is spreading, but community outreach helps to ensure low-income people know about, and take advantage of, the reforms that have recently passed.

Across California, coalitions are coming together to reform the way fines and fees get assessed. These coalitions need our support, too. In your local community, reporting in on what fines and fees cause the most suffering helps the Financial Justice Project focus its energy where it’s most needed.

To learn more and get involved, contact the Financial Justice Project or read its Fines and Fees Task Force Report. Once you know about the detrimental spiral these fines and fees inflict upon our low-income neighbors and realize the futility of assessing them in the first place, it’s hard to understand why anyone — or any city — would operate this way.

San Francisco is changing. We hope we can help spread that change across the state and country, bringing opportunity and access to all.

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