Traffic tickets go up significantly when local government revenue falls, says a new study by Thomas Garrett of the St. Louis Federal Reserve Bank and economist Gary Wagner of the Univeristy of Arkansas Little Rock, reports the St. Louis Post-Dispatch. Controlling for other factors, a 1 percentage point drop in local government revenue leads to a roughly .32 percentage point increase in the number of traffic tickets in the following year, a statistically significant connection.
The study, “Red Ink in the Rearview Mirror,” will be published next month in the Journal of Law and Economics. It examined 14 years of data from 96 North Carolina counties. Garrett said, local governments squeezed for money are under pressure to find new ways of raising new revenue. They cannot raise taxes in a recession. So they look to things such as lottery sales, casino gambling, and hotel occupancy taxes. These are “hidden taxes” – revenues mostly from nonvoters and nonresidents. Traffic tickets fit the bill. “It is a politically appealing way of generating revenue,” Garrett said. In 2006, 55.6 million traffic and ordinance violation cases were filed in the U.S., a 9 percent increase from 1997, says the National Center for State Courts.