Tuesday, March 1, 2016

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Roadblock to Self-Sufficiency: The Costs of Driver’s License Suspension Policies in Indiana
by Ryan Schwier and Autumn Hempfling
(Editor's note: Resolution HR 40 authored by Reps. Dan Forestal and Ed Soliday was filed on March 1, 2016 urging the Indiana General Assembly to study the suspension and reinstatement of driver's licenses for those who are indigent.)
The recently-published Self-Sufficiency Standard for Indiana 2016 reports on the rising costs of living in the state, leaving many Hoosier families unable to stretch their wages to pay for basic necessities. In addition to other expenses, the report factors in the costs of private transportation—a vital link to job security in a state with few options for reliable public transit. Yet for many low-income adults in Indiana, the expense of owning and operating a car is not the only barrier to getting to work. State policies that authorize driver’s license suspensions for non-moving violations, combined with exorbitant reinstatement fees, prevent many from maintaining employment and becoming self-sufficient.
Majority of Driver’s Licenses Suspensions are for Non-Moving Violations
Today, a majority of Indiana’s estimated 420,000 suspended motorists have lost their licenses, not for OWIs or habitually reckless driving, but for a variety of offenses unrelated to driving safety: unpaid traffic tickets, bouncing checks, truancy, fuel theft, failure to show proof of insurance, failure to pay child support, controlled substance violations, and even graffiti.
In 2014 the the Indiana General Assembly enacted legislation eliminating certain mandatory license suspensions for non-traffic offenses. The measure, which took effect on January 1, 2015, also created a “specialized driving privilege” program.  Under this arrangement, most suspended drivers are eligible for a probationary license, allowing them to travel to and from work and other designated locations during certain hours of the day.
Rising Fees Undermine Potential For Reform, Result in Millions of Uncollected Debt
While the new law is certainly a step in the right direction, other state policies directly undermine its potential for measurable reform. With growing budget restrictions in recent years, and a persistent reluctance in raising taxes, the state increasingly relies on fines and fees to generate additional streams of revenue. Driver’s license suspensions have played a central role in this process. In early 2014, the BMV reported a total of $131 million in unpaid license reinstatement fees. Rather than analyze the underlying reasons for this uncollected debt, the legislative solution was simply to increase these fees in the hopes of recovering desperately-needed funds. Last year, reinstatement fees for persons suspended while driving without proof of insurance rose dramatically—in some cases as much as 233%. These costs are often prohibitively expensive and may prevent the restoration of driving privileges indefinitely, even for those who can secure the requisite insurance coverage.
By failing to consider an offender’s ability to pay, the system deprives itself of the very revenue it seeks to generate. The enhanced reinstatement fees were expected to bring in an additional $17,700,000 in annual revenue starting in 2015. Actual revenue generated came to only $9,788,770. Although a modest increase over the previous year, the amount fell far short of fiscal projections —nearly $8 million short.
New Report Details Extent of Problem in Indiana, Recommends Changes in Policy
A new report published by the Health and Human Rights Clinic at the Indiana University McKinney School of Law examines these issues in greater detail. Among the report’s key findings include the following:
  • Over 216,000 Hoosiers have suspended driver’s licenses for unpaid traffic fines or failure to appear in court, a number roughly proportional to the total populations of South Bend and Evansville combined.
  • More than 67,000 state residents have suspended licenses for failure to show proof of insurance.
  • Approximately 8,000 Indiana motorists have been suspended for failure to pay child support.
  • Indiana is one of only 14 states (soon to be 12) with laws that authorize driver’s license suspensions for controlled substance violations.
The report recommends that Indiana discontinue the use of license suspensions as a revenue-generating measure and tool for punishing behavior unrelated to safe driving. Instead, state motor vehicle laws should be limited to (1) establishing standards for driving competency, (2) ensuring public safety by removing dangerous drivers from the road, and (3) penalizing those found guilty of reckless or negligent driving.
To be sure, Indiana drivers must  be held accountable for violating traffic laws. However, measures that appropriately consider an offender’s ability to pay  are likely to reduce  the economic burden on the state’s most financially vulnerable residents while increasing their mobility and access to jobs. By implementing income-based payment plans, authorizing community service hours in lieu of monetary sanctions, or granting periodic fee “amnesties” to those who pay their base citation fines, the state is likely to recoup a significant portion of uncollected debt  and get drivers back behind the wheel legally.  
Such policy solutions will certainly generate a degree of resistance from an uninformed public. However, if we expect Hoosiers to take a proactive role in achieving financial independence, the path to self-sufficiency begins with removing the most obstructive of economic roadblocks.


Ryan Schwier and Autumn Hempfling are law students at the Indiana University Robert H.McKinney School of Law and co-authored the report, Roadblock to Economic Independence: How Driver’s License Suspension Policies in Indiana Impede Self-Sufficiency, Burden State Government & Tax Public Resources.

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