Wednesday, July 24, 2019
Ariel Jurow Kleiman (San Diego) presents Nonmarket Fees at Ohio State today as part of its Summer Workshop Series:
The public finance literature tells us that user fees will introduce market-like efficiency to public good provision. Meanwhile, criminal justice scholars note that criminal justice fees have run amok, causing crippling debt, undermining reentry efforts, and implicating civil rights and constitutional concerns. How can we reconcile these two literatures? This Article argues that it is precisely because criminal justice fees diverge from a traditional market-like structure that they have become so problematic. Specifically, because criminal defendants cannot consider the fee amount in their consumption of criminal justice services, consumer demand imposes no downward pressure on fee levels. The fees are thus allowed to balloon largely unfettered by the market-like restraints that apply to other fees. Absent market-like restraints, monopolistic agencies are free to pursue maximum fee revenue by increasing the fee level or the amount of services provided. Meanwhile, courts have diluted judicial fee requirements to accommodate increasingly creative user fee structures. These unbounded, nonmarket fees undermine agencies’ political legitimacy, lead to inefficient misallocation of public goods and services, cause exploitation of politically powerless groups, and impose significant human cost. The Article finishes by describing other fees that exhibit the same flawed structure, and by suggesting reforms to nonmarket fees.
While banning nonmarket fees is one possible option, where fees are inevitable, policymakers should impose meaningful limits on the fees and seek to correct perverse incentives at the agency level.