WASHINGTON, D. C. (Tuesday, April 17, 2018) ––So far this fiscal year, the District government has captured more than $4 million from the city income tax refunds of city residents who didn’t pay their past-due parking citations or outstanding traffic tickets. It’s “tax day,” the deadline for the nation’s tax filing season, and the same fate may await District residents who owe the city government $61,559,809 in unpaid traffic and parking citations in the period from October 2016 through January 31, 2018. Instead of getting faster tax refunds from the District, city residents face the risk of losing a part or all of their D.C. income tax refunds (D-40) due to unpaid red-light camera tickets, overdue speed camera tickets, outstanding parking tickets, and unsettled citations for moving violations. The city is also using other means to collect ticket debt.

Motorists racked up 1.9 million unpaid tickets from October 2016 through January 31, 2018. The value of the unpaid citations is $307,097,116, according to the 2018 District Department of Motor Vehicles (DMV) Adjudication Caseload Statistics report. The District is dispatching debt collectors in hot pursuit of any motorist anywhere in arrears on old traffic and parking ticket debts. Yet the city is also going after District residents the hard way by automatically suspending driver’s licenses for unpaid parking and traffic tickets. City residents have a habit of checking their District tax refund status online, and some might have a big surprise coming. Depending upon their ticket indebtedness, District residents run the risk of tax intercepts on their city income tax returns, and could see smaller or no refunds. Other states are also using the draconian tactics.

“The District is one of a growing number of states and localities across the nation targeting and seizing residents’ state tax refunds to recoup millions of dollars in unpaid parking and traffic tickets, and other outstanding debts owed to the jurisdiction,” said John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs. “Compounding matters, fines on unpaid traffic and parking tickets double after 30 days in the District, and it is burying some motorists under a mountain of debt, forcing others to try to outrun the long arm of the law or dodge the reach of dunning debt collectors and the tax office.”

ONE AND DUN FROM FY 2016-FY 2018 (As of January 31, 2018)

To satisfy old traffic and parking ticket debt, the District Office of Tax and Revenue docked or withheld $4.4 million from the D.C. tax refunds of city residents in the first six months of Fiscal Year 2018, from October 1, 2017 through March 31, 2018. It is on pace during FY 2018 to withhold $8.8 million to $10 million in District income tax refund offsets from city  residents in arrears on their parking and traffic ticket debts, calculates AAA Mid-Atlantic. In contrast, the city’s tax office reportedly “garnished $12.9 million in offsets from the income tax refunds of 41,631 District residents in the period from February 2013 through February 2016.” During the initial phase of the tax refund offset program, the city reportedly exacted $682,320 in income tax refund offsets from “3,687 District taxpayers with tickets issued more than 120 days before.”

As Americans file 155 million tax returns, District residents with ticket debt who are filing their D-40 or D-40EZ taxable income forms with the Office of Tax and Revenue (OTR) must be mindful of the impact of the “Tax Refund Offset for Department of Motor Vehicles Liabilities Act of 2012.” Here is why. Under that law (§ 47-4431), the District Office of Tax and Revenue is intercepting unpaid ticket debts plus late fees from the District tax refunds of taxpayers with a permanent residence in the nation’s capital.  

“If you do not pay your ticket, and any fines associated with it, within the time allowed, and you are a District resident, any overdue or outstanding ticket debt may be deducted from your DC tax refund,” warns the District Department of Motor Vehicles (DMV). “Additionally, if you are a District resident, you may not be able to get a driver’s license or register a vehicle if you have outstanding ticket debt.”

Ticket revenue for the city’s coffers dropped $30 million during Fiscal Year 2017. On top of that, scofflaws racked up $133,169,945 in unpaid parking and traffic tickets during FY 2017, according to the 2018 DMV Adjudication Caseload Statistics report. Approximately 806,234 traffic camera tickets, parking tickets and sundry citations for other moving violations went unpaid in Fiscal Year 2017. In contrast, 777,224 citations went unpaid during FY16, with ticket scofflaws putting the city’s coffers $125,605,692 in the hole. 

Debt collectors brought in approximately $127 million in outstanding debts, fines and fees, including overdue parking and traffic ticket fines and ticket debt, owed to the District Department of Motor Vehicles (DMV) from Fiscal Year 2014 through Fiscal Year 2017, reports the Office of the Chief Financial Officer (OCFO). Debt collectors dunned an average of $32 million annually in outstanding debts and overdue ticket fines owed to the DMV, the Office of the Chief Financial Officer (OCFO) testified during a hearing on October 21, 2017. Millions of dollars in outstanding debts were arrogated by private sector debt collection agencies and by collectors with the city’s Central Collection Unit (CCU).

The authority to summon and “sic” debt collectors on deadbeat motorists was mandated by the Delinquent Debt Recovery Act of 2012. The District law established a Central Collection Unit (CCU) within the Office of Finance and Treasury of the Office of the Chief Financial Officer. On average, the District processes between 2.4 million and 3 million parking and traffic tickets each year. In contrast, “each year, the City of Chicago issues more than 3 million tickets for a wide range of parking, vehicle compliance, and automated traffic camera violations, from $25 citations for broken headlights to $250 tickets for parking in a disabled zone,” reports Mother Jones.

The District is no slouch when it comes to writing and dishing out tickets of all sorts. In Fiscal Year 2010, for example, the District Department of Motor Vehicles (DMV), processed, adjudicated and collected payment on 2.4 million parking and traffic tickets. The city’s ticket-writing output is staggering. The District DMV processed over 2.5 million tickets issued by various agencies in Fiscal Year 2013, as it did in FY 2014.

Not to be undone, the following budget cycle, the tally soared to more than 2.8 million tickets.

The DMV processed 2,687,539 parking, photo-enforced and moving violations tickets in Fiscal Year 2017, the 2018 DMV Adjudication Caseload Statistics report shows. In a remarkable turnabout, traffic ticket fine revenue declined by $30 million during Fiscal Year 2017, according to the Office of the Chief Financial Officer (OCFO). In fact, “traffic fines declined due to lower ticket issuances from non-photo tickets, such as parking and towing tickets,” Jeffrey S. DeWitt, the Chief Financial Officer testified before the District Council on February 5, 2018. Yet, only ten percent of the tickets are contested by motorists each year.

In February 2018, the District collected $13.9 million in revenue for its coffers from traffic fines and forfeitures, including $8 million dollars in automated enforcement fines, plus $5,094,846 in traffic fines, and $846,525 in other fines and forfeitures, according to preliminary data from the Office of the Chief Financial Officer (OCFO). That compares to $16,287,710 in revenue from traffic fines and forfeitures a year earlier in February 2017, including $10,096,100 in automated enforcement fines, coupled with $5,443,145 in traffic fines and $946,515 in other fines and forfeitures.

The District government is capturing tax refunds to force the payment of parking and traffic tickets and other delinquent debts owed to the District Department of Motor Vehicles (DMV). In addition, the Central Collection Unit (CCU) charges delinquent motorists a 20 percent collection fee on the outstanding balance due for all tickets over 90 days old. The city’s Delinquent Debt Recovery Act went into effect October 1, 2014.

What is more, the District of Columbia and 43 states “use driver’s license suspension to coerce

payment of government debts arising out of traffic or criminal convictions,” including the failure to pay court debt, according to a September 2017 study by the Legal Aid Justice Center (Driven by Dollars: A State-By-State Analysis of Driver’s License Suspension Laws For Failure To Pay Court Debt). “License-for-payment systems are ubiquitous despite widespread consensus that they are counter-productive and harmful. Forty-three states (and D.C.) suspend driver’s licenses because of unpaid court debt,” the Center reported.

In March, the Legal Aid Society of the District of Columbia took to task the District Department of Motor Vehicles (DMV) for suspending driver’s licenses as “a debt collection tool for private creditors,” such as insurance companies, “to collect on a civil judgment.” 

District Council members have introduced four bills to reduce the financial burden of traffic and parking tickets on District residents, including low-income drivers in the city. The measures include: “The Traffic and Parking Ticket Penalty Amendment Act of 2017” (B22-204); the “Parking Ticket Waiver Act of 2017” (B22-237); the “Parking and Moving Violation Amnesty Act of 2017” (B22-410); and the “Ticket Payment Plan Amendment Act of 2017” (B22-488). 

In addition, members of the District Council introduced the “Driver’s License Revocation Fairness Amendment Act of 2017” on December 5, 2017. The Legal Aid Society of the District says, if enacted, the bill would “bring an end to the DMV’s current practice of suspending driver’s licenses as punishment for failure to pay civil judgments, as well as ending automatic license suspensions for unpaid parking and traffic tickets.” 

As of January 29, 2018, the District DMV no longer revokes driver’s license due to drug convictions.  The DMV explains, “Convictions related to delinquent child support payments are federal law and must continue to result in license revocations. Judgments, usually related to insurance, require further review.”

Americans have filed “more than 94 million tax returns” as of March 30. As this tax season ends in the nation’s capital, the Office of Tax and Revenue (OTR) is sending letters to District taxpayers explaining the reason for the offset, if they have forgotten all about old or past due traffic and parking tickets stuffed in their glove compartments. The District Council passed the “Tax Refund Offset for Department of Motor Vehicles Liabilities Act” as part of “the Fiscal Year 2013 Budget Support Act.”   

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