TEXAS HOUSE PUTS COURT FEE BILL ON THE FAST TRACK
For several weeks, city officials and municipal advocates have expected to see legislation that would raise the “state traffic fine” (a state fee imposed on certain convictions in municipal court), but no one expected what occurred on Monday, March 7.
First, some background.
In 2003, the legislature imposed a “state traffic fine” of $30 on each traffic violation conviction. That fine, which is really nothing more than a state-imposed tax on municipal court convictions, was in addition to many other state fees that had previously been tacked onto municipal court fines. (Today, the numerous state fees imposed on traffic fines total more than $80.)
The state traffic fine is a way for the state to raise money by relying on some other entity (in this case, local governments) to actually generate the revenue. The fee produces approximately $90 million annually. Roughly 62 percent of the total goes to the state’s general fund, 33 percent goes to trauma centers, and five percent is kept by the cities and counties that collect the fee revenue.
Prior to the 2011 session, the Legislative Budget Board recommended a 50-percent increase in the state traffic fine: a bump from $30 to $45. This, of course, was an attractive option for lawmakers facing a huge budget-balancing problem.
And so it was that H.B. 258 was filed by Rep. Naomi Gonzalez (D-El Paso) on Wednesday, March 2; the bill was referred to the House Ways and Means Committee the next day. None of this came as a surprise. The surprise came two business days later (Monday, March 7) when the House voted to suspend the posting rule and have an immediate committee hearing on H.B. 258.
The proponents of the bill (representatives of trauma centers) had clearly been informed in advance and were present at the hearing with prepared testimony. The TML staff was, as always, monitoring House actions, had learned of the rules suspension, and rushed over to the hearing to oppose the bill.
Why would TML oppose? Again, some background.
The fiscal note on H.B. 258 indicates that the bill will generate roughly $28.5 million in additional annual revenue for the state general fund, $14 million for trauma centers, and $2.4 million for local governments: the cities and counties that must impose and collect the fee.
But that fiscal note is very misleading. City officials know that as the state imposes more and more fees on municipal fines, the revenues generated for the city from the fines themselves will decrease. If a municipal judge normally imposes a total charge of $250 for a traffic conviction, each dollar that goes to the state is a dollar that won’t go into municipal coffers. And as the state share goes up, the local share goes down. Thus, contrary to what the H.B. 258 fiscal note says, it is most likely that the bill will reduce municipal revenue.
That’s why city officials should have been given fair and ample notice of the committee hearing on H.B. 258. The League released the following press release on the issue on March 8, the day after the hearing:
State tax on cities is highway robbery
- AUSTIN – The State of Texas takes the first $82 from every municipal traffic fine collected by cities, which amounted to $235 million in 2010. Monday, the House Ways and Means Committee considered a bill to increase the state’s take from every city traffic ticket, skimming off an additional $42 million per year from city traffic fines.
H.B. 258 by Rep. Naomi Gonzalez would increase the amount the state siphons off of every municipal traffic violation by $15 – from $82 to $97 – an 18-percent increase. Two-thirds of the revenue from the increase would go to the state’s general fund, and one-third would go to a fund for trauma care and emergency medical services.
“Trauma care is certainly an important and worthy service but if the state wants to increase funding for trauma care by $14 million a year, the legislature should do what every city council has to do: cut somewhere else or vote to raise taxes,” said Texas Municipal League President Robert Cluck, Mayor of Arlington. “Taking money out of city treasuries to pay for state services is simply highway robbery that forces cities to cut services or raise property taxes.”
Since 2002, the state tax on every municipal traffic violation has risen from $40 to $82. Regardless of the amount a city is able to collect on a traffic violation, the state gets $82 before the city gets any fine money.
“In defense of city taxpayers, we have to draw the line and strongly oppose any further increases in this state money grab,” Mayor Cluck said.
“It wouldn’t be so bad if the state helped pay for the cost of enforcing municipal traffic laws by providing cities with funding for police salaries, health insurance and retirement benefits or helped pay for the cost of municipal courts. But that’s never going to happen in Texas.”