CHICAGO -- The Missouri Senate will vote Thursday on legislation that would tighten limits how much local governments can rely on court-related fines to prop up their operating budgets.
The final version of the bill as amended was approved on Tuesday and the Senate will vote on it Thursday, said an aide to its sponsor Sen. Eric Schmitt, R-Glendale. If approved, the bill would head to the House.
The legislation comes in response to concerns over local governments' dependence on court fines, an issue that surfaced after the widespread protests following the August police shooting to death of Michael Brown, who is black and was unarmed, by a white police officer.
Some believe that stiff court fines imposed by local governments like Ferguson's result in aggressive policing tactics that disproportionally target low-income residents. Gov. Jay Nixon in his State of the State speech endorsed the need for municipal court reforms.
Current state rules in legislation that's referred to as Mack's Creek Law cap traffic ticket income at 30% of a municipality's general operating revenue. The city must send any excess income to the state.
"Unfortunately, the municipal court system, especially in the St. Louis region, has created a system of traffic ticket tricks and schemes designed to extract more and more from our citizens," Schmitt said in a statement when he introduced the bill.
Schmitt's measure lowers the threshold for smaller cities, towns, or villages to 20% with larger cities facing a more stringent cut to 10%. The changes would be imposed statewide but some court systems in smaller counties would be exempt.
The excess revenue is sent to the state Department of Revenue for distribution to schools located in the county where the funds were generated. The change would take effect as soon as next January depending on the start of a municipality's fiscal year.
The act requires that all revenue above 5% of a municipality's annual general operating revenue from fines, bond forfeitures and court costs for traffic violations that occur on the interstate highway system also go to the Department of Revenue.
All cities, towns, and villages must produce an addendum to their annual financial reports submitted to the state auditor with an accounting of total revenues from fines, bond forfeitures, and court costs for traffic violations and the percent of annual general operating revenue from traffic violations. The auditor in turn must notify any city, town, or village of the need send off excess revenues within 60 days.
Annual general operating revenue would be defined as any revenue that can be used to pay any bill or obligation including certain taxes. It does not include revenue designated for a specific purpose.
Violations of the law could result in a loss of local sales tax distributions and could force an election asking whether the city, town, or village should be disincorporated.
Missouri State Auditor Tom Schweich previously announced his plans to audit 10 municipal court systems, including Ferguson's. The audits are reviewing the systems for compliance with accounting practices, racial and gender statistics on warrants, and adherence to current revenue limits.
Court-related fines generated more than $2 million for Ferguson in 2013, making them the second biggest revenue producer for the city behind sales tax receipts. A series of lawsuit have been filed challenging municipal ticketing operations by advocacy groups.
Moody's Investors Service recently shifted its outlook on Ferguson's Aa3 general obligation rating to negative over its use of reserves to paper over budget deficits. The city's credit standing has so far weathered the civil unrest that followed the shooting largely due to its flush reserves.