Current Commentary: Tax Collectors In Funny Hats BY Larry M. Elkin, CPA, CFP®

On Labor Day, as I drove south on New York’s beautiful  Taconic State Parkway, I crested a hill to find a state  police cruiser stopped on the shoulder. Just beyond the trooper were three more  cruisers, each with lights flashing, each parked behind an unhappy motorist.

I had stumbled across a classic speed trap.

The Parkway is a lightly traveled road with a  speed limit throughout of 55 miles per hour, though in many sections it could safely be taken faster. Were the state troopers out in force to promote safety and make sure everyone enjoyed their Labor Day holiday?

That may have been part of the reason, but I would be willing to bet that New York’s endless state and local budget problems had more than a little to do with it, too.

Ticket quotas are always there, and their existence is always denied. A recent recording, obtained from an anonymous police supervisor in Brooklyn, created a stir by evidently proving what the public has always suspected. The officers were told that they had to issue a minimum of 20 summonses per week, for violations including double parking and driving while using a cell phone.

It is hardly a new problem. The Pittsburgh Post-Gazette ran a story in 2002 in which anonymous Pennsylvania state troopers complained about the need to meet statistical goals, sometimes at the expense of safety. Pressure to perform made many troopers feel they could no longer rely on their own best judgment. One said, “I’m writing a ticket for somebody going 74 mph, to make my quota, and a car goes whizzing past me doing 97. That’s the guy I should have been waiting for.”

There is nothing wrong with enforcing the law. But there is a lot wrong with turning law enforcement officers into tax collectors with funny hats.

By looking at traffic violations as a way to raise revenue, state and local governments compromise public service and safety. Double parking is certainly a problem, but it is hardly the most dangerous one facing most Brooklyn neighborhoods.

Quotas promote public distrust of police, or sanitation inspectors, or revenue agents, or any other public officer whose job depends upon reaching a fiscal target. These  public servants will, at best, be seen as draconian enforcers. At worst, officers under excessive pressure may resort to outright dishonesty.

Any time law enforcement has a financial stake in how and when the law is applied, there is a serious problem.

In the 1990s, the Volusia County, Fla. sheriff’s drug squad conducted raids against travelers on Interstate 95. Deputies searched motorists’ cars and seized large quantities of cash under suspicion of drug law violations. Even if no drug charges were filed against the citizens in question, almost none of this money was returned. The NAACP went to court to stop the raids, charging that the sheriff’s office specifically targeted black and Hispanic drivers.

A recent investigation by the Indianapolis Star found that money and goods seized from criminal suspects were not going to Indiana’s Common School Fund, as the state’s law apparently intended. Instead, a vaguely worded portion of the statute allowed law enforcement  agencies to direct most of that cash back into their own budget. Paul Ogden, a defense attorney from Indianapolis, said, “They’re profiting off policing with this forfeiture law.”

The best answer is for the public to demand reform. State legislatures should pass laws requiring that, beyond basic administrative costs, revenue from traffic summonses, tickets and seizures be remitted directly to the state treasury. (As Indiana’s situation illustrates, these costs should also be clearly defined.) The state should then return this money to its taxpayers in some way: either per capita, inversely to income, or through some other system.

This would remove the incentive for the state to randomly take money from passers-by, either figuratively or literally. The system can then focus on dangerous offenses, and the job of law enforcement will be to keep us safe, not to keep the public sector solvent.

State and local governments need money to operate. They should raise it the old-fashioned way, through  taxes that are imposed and enforced systematically. This sort of tax is collected by men and women in business attire – no funny hats required.

Larry M. Elkin, CPA, CFP®, is president of Palisades Hudson Financial Group which is a fee-only financial planning firm headquartered in Scarsdale, NY. The firm offers    estate planning, insurance consulting, trust planning, cross-border planning, business valuation,   family office and business management, executive financial planning, and tax services. Its sister firm, Palisades Hudson Asset Management, is an independent   investment advisor with about $950 million under management. Branch offices are in Atlanta and Ft. Lauderdale. Website: www.palisadeshudson.com.