Road to Poverty: The Harms of Debt-based License Suspensions
WASHINGTON (April 18, 2022)—A new paper by R Street Institute senior fellow Christi Smith evaluates the wide-ranging negative impacts of debt-based driver’s license suspensions on individuals, families, communities and law enforcement. The paper looks at the current use of these systems, how the practice causes undue harm and its influence on recidivism and incarceration rates. Smith also assesses improved policies for debt collection and alternative strategies to improve the status quo.
Most people take their driver’s license for granted, and do not think about it unless they are at the DMV. However, millions of Americans have their license suspended, not due to dangerous driving or criminal behavior, but because of their failure to pay fees and fines. These penalties are not tied to public safety or determined by one’s ability to pay.
While the practice was designed to incentivize people to pay their debts, lack of transportation makes it near-impossible to maintain stable employment and fulfill existing financial obligations, let alone any additional debts. Minor debt from a suspended license can quickly spiral into major debt, which traps well-meaning people in a cycle of poverty, unemployment or legal violations.
“Research provides ample evidence that the high cost of enforcing license suspensions comes at the expense of the individual, the local economy and the safety of the community,” said Smith. “The policy encourages noncompliance because of the sheer impossibility of existing in a modern world without access to dependable and affordable transportation.”
Smith reviews alternative policies that could improve the collection of government debt without the counterintuitive impacts of the existing laws, including those proposed in the Driving for Opportunity Act of 2021.
Read the full report here.
3 key points
Debt-based driver’s license suspensions are an ineffective mechanism for collecting government debt.
The enforcement of debt-based driver’s license suspensions compromises public safety and detracts from legitimate uses for law enforcement.
Debt-based driver’s license suspensions disproportionately impact impoverished communities, ensnaring otherwise law-abiding people in the criminal justice system.