NASHVILLE, TN–Tennessee law allows for the revocation of a driver’s license for court debt that is overdue, but a new report released today by nonpartisan think tank ThinkTennessee finds that the policy is of limited utility when it comes to increasing court debt collections.
In Reducing the Harms of Court Debt: Driver’s License Revocations are an Ineffective Policy for Increasing Court Collections (brief and report), ThinkTennessee researchers studied never-before-analyzed data on collection rates from the Tennessee Administrative Office of the Courts, as well as evidence from other states. The findings suggest that the harms of driver’s license revocations outweigh its benefits.
“While fines are punishments for wrongdoing and are intended to deter and discipline offenders, fees are designed solely to raise revenue and place the burden of funding and providing court services on the individuals that are least able to afford it,” said ThinkTennessee President Erin Hafkenschiel. “User fees make sense in a wide variety of scenarios, but this new data shows that is simply not the case here. By reforming this system, Tennessee can cut this government red tape and remove barriers for Tennesseans trying to get back on their feet, better their lives, and contribute to society.”
Key Findings:
- Tennessee data shows driver’s license revocations are not resulting in increased collection rates. Neither the implementation of a 2011 law allowing for driver’s license revocations nor a court-ordered injunction stopping and later restarting revocations had a meaningful effect on collection rates.
- Income appears to be a key driver for collections, as revealed by both the relatively low incomes of people with court debt and the effect of the third pandemic stimulus. Typical defendants with court debt have incomes between 39% and 69% of the federal poverty level (roughly $5,300 and $9,377 a year), indicating that they likely lack the financial resources needed to pay debts. The effect of the third pandemic stimulus strengthens this hypothesis: The April 2021 stimulus increased collection rates in Tennessee by approximately 12 percentage points.
- There is no compelling evidence that the state of the economy or unemployment rate impacts court collection rates. Working-age returning citizens face unemployment rates nearly five times higher than the typical American. By making it harder to access employment and earn an income, driver’s license revocations could further trap low-income Tennesseans in a cycle of court debt and poverty.
- Reforming suspensions for unpaid court debt would cut government red tape and allow those reentering society to do so more successfully, lowering recidivism rates and boosting economic growth. Specific policy proposals to consider include eliminating driver’s license revocations, creating more consistency in the ability-to-pay determination process, and enacting either targeted or broad fee elimination.
