TAX MAN: Hike traffic fines for profit

The Honolulu City Council wants to raise money for the Honolulu Police Department by adding a surcharge to traffic fines. As KHON2 reports, they say that the money can and should be used to recruit, retain, and equip police officers. It’s definitely a creative idea to raise additional revenue without hiking the property tax.

There is a small problem, however. All traffic fines go to the State, not the county, under current law.

The City tried to get around the problem before. In the 1990’s, the City passed an ordinance saying that anyone convicted in Honolulu would need to pay a “user fee” of $250 in addition to any monetary or other punishment that the court imposed. That fee was to pay for the costs of prosecution and law enforcement.

But our supreme court didn’t buy that story, in a case called State v. Medeiros, 89 Hawaii 361 (1999).

Counties don’t have the authority to tax anything other than real property. They can, however, impose user fees. So, if someone wants to visit the city zoo, the City can and does charge an admission fee.

Charging a criminal with the costs of law enforcement and prosecution is just and correct, the city said.

The court then wondered what kind of services are being supplied to a convicted person that would justify the fee. That would help distinguish the fee from a tax, which the City had no power to impose.

Plenty, the City argued. Prosecution and arrest assist the person convicted in preventing further harm to themselves and others, and hopefully, also helps to convince the offender to stop being a lawbreaker and become a productive member of society.

Yeah, said the court. It’d be like charging the zoo animals for the service of keeping them caged.

We all know what kind of damage a rampaging elephant can do to itself and others. This actually happened in 1994 when an elephant named Tyk got loose and caused havoc before being shot to death by police. So, the argument goes, the Dumbos of this world ought to pull his own weight in connection with the city’s costs to protect him.

The court then went on to observe that in George Orwell’s 1984 one of the characters, who had been caught and imprisoned for various crimes, wondered to his jailer whether he was brought to the jail to punish him, or to make him confess. The jailer’s reply: “No! Not merely to extract your confession, nor to punish you. Shall I tell you why we have brought you here? To cure you! To make you sane! Will you understand, Winston, that no one whom we bring to this place ever leaves our hands uncured?”

Ultimately, the court found that the $250 charge was a tax, not a user fee, and struck it down.

This time, the City Council seems to have learned from that unhappy past. The Council might pass a resolution politely asking the State Legislature to jack up traffic fines and to share the money with the county in which the infraction took place. As to how much, Council Chair Tommy Waters said, “I don’t think they like to be told by the county what they need to do. So I’m asking, I’m asking them to consider it, and we can work on a number as the process goes forward.”

State legislators to which KHON2 reached out for comment had nothing to say. Which might have something to do with the fact that all of the legislators in the square building on South Beretania Street need to run for re-election in 2022.

In a few short months, the 2022 legislative session will start, and then we will see what fate will come of the request for higher traffic fines.

In the meantime, you might want to visit the zoo. Before the admission fee gets hoisted again.

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Tom Yamachika is president of the Tax Foundation of Hawai‘i.

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