Why Court Fees Kill Black Wealth and Economic Mobility
By Darius Spearman (africanelements)
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The Hidden Cost of the Legal System
The Urban Institute recently released a critical brief that highlights a major problem for Black families. This report explains how administrative fines and fees in the criminal legal system stop people from building wealth. Many people call this a shadow tax because it targets those with the least money (urban.org). This financial burden is a modern version of old systems that took wealth away from Black communities. It prevents families from buying homes or saving for the future. Instead of a path to justice, the system often creates a cycle of debt that lasts for years.
The report shows that these fees are more than a small nuisance. They are a structural barrier that keeps the racial wealth gap wide. When a person cannot pay a court fee, the debt grows with interest and late penalties. This often leads to more legal trouble, even if the original offense was minor. This system does not just affect individuals. It hurts entire neighborhoods and keeps money from circulating in the Black community. Understanding this issue requires looking back at the history of labor in the United States and how it has always been tied to the legal system.
The Racial Wealth Gap and Legal Debt
Source: Urban Institute Data (urban.org)
From Black Codes to Convict Leasing
The history of using the law to extract wealth from Black people began right after the Civil War. When slavery ended, Southern states wanted to keep control over Black labor. They passed laws known as Black Codes to criminalize everyday life (wikipedia.org, wikipedia.org). These codes made it a crime to be unemployed or to change jobs without a permit. If a person was arrested for vagrancy, they were fined heavily. When they could not pay, the state would lease them to private companies. This was known as involuntary servitude by another name (wikipedia.org).
This system was highly profitable for the government. By the year 1898, convict leasing provided 73 percent of the total state revenue for Alabama (wikipedia.org). This created a reason for police to arrest as many Black men as possible. The more people they arrested, the more money the state made. While convict leasing eventually ended due to public outcry, the goal of using the courts to make money did not disappear. The practice shifted into the chain gang system and later into the modern fine and fee structure we see today (uab.edu). The target remains the same: the economic mobility of Black citizens.
The Rise of User-Funded Justice
In the 1980s, the way cities and states paid for their courts changed. Federal funding for local governments dropped significantly during this time. In 1980, federal money made up about 22 percent of city budgets. By the end of that decade, it fell to only 6 percent (urban.org). This change happened because of a shift in national policy often called Reaganomics. Local governments had to find new ways to pay for their police and judges. They chose to move the cost onto the people moving through the system. This is known as user-funded justice (brennancenter.org).
This model treats the legal system like a business. Instead of being a public service paid for by taxes, the courts charge fees for almost everything. There are fees for filing paperwork, fees for DNA tests, and even fees for staying in jail (publiccounsel.org, wicourts.gov). Under the current administration of President Donald Trump, these fiscal structures continue to place a heavy burden on low-income communities. By 1987, about 86 percent of lower court cases across the nation involved a fine (urban.org). This shift turned the pursuit of justice into a search for revenue. It specifically harms Black communities because they are more likely to be policed and prosecuted.
The Drop in Federal Funding for Cities
Percentage of City Budgets from Federal Funds (urban.org)
The Legal Struggle for Equal Protection
The United States Supreme Court has tried to limit how much the government can punish people for being poor. In the case of Williams v. Illinois in 1970, the court ruled that a person cannot stay in prison longer just because they cannot pay a fine (justia.com). Another important case was Tate v. Short in 1971. In that case, the court said it is unconstitutional to send someone to jail for a fine if they are indigent, or too poor to pay (oyez.org). These rulings were supposed to protect the political experience of Black people by ensuring equal protection under the law.
However, many courts find ways around these rules. In 1983, the case of Bearden v. Georgia required judges to hold a hearing to see if a person has the ability to pay (casemine.com). If the person truly cannot afford the fine, the judge is not supposed to jail them. In reality, these hearings are often very short or do not happen at all. Judges may decide a person is being willful in their non-payment even if they are struggling to survive. This allows the cycle of incarceration for debt to continue. Administrative surcharges and late fees are often added on top of the original fine, making it impossible to ever finish paying (publiccounsel.org).
The Devastating Reality of Modern Debt
Modern data shows that these historical patterns are still very much alive. In Virginia, Black residents make up about 18 percent of the population. However, they were charged 33 percent of all traffic and criminal fines in the year 2024 (urban.org). This resulted in over 84 million dollars taken from the Black community in a single year. These numbers show that the legal system still acts as a tool for wealth extraction. This is a historical exploitation that mirrors the way debt has been used globally to control Black people.
In California, the courts are still fighting over these issues. The case of People v. Kopp in 2025 affirmed that courts must consider if a defendant can pay before adding extra costs (urban.org). This ruling is important because it acknowledges that these fees are a burden on civil rights. When the state takes money from people who are already poor, it makes it harder for them to find housing or keep a job. This creates a permanent class of people who are stuck in debt. The economic impact is clear: Black households with legal debt have 50 percent less wealth than those without it (urban.org).
National Revenue from Fines and Fees
Amount raised by state and local governments in a single year (2017).
Source: US Census Bureau (brennancenter.org)
Barriers to Mobility and the American Dream
Administrative fees act as a massive block to the American Dream for many Black families. When a person cannot pay a court debt, the state often suspends their driver’s license (westsideobserver.com). In the United States, about 86 percent of people drive to their jobs. Losing a license often means losing a job. This makes it even harder to pay the original debt. It is a trap that keeps people from moving up in the world. Instead of saving money for a house or for a child’s education, families must use their limited cash to pay off the state.
The Urban Institute brief highlights that this debt carries “poverty penalties.” These include interest, collection fees, and late charges that can make a small fine triple in size (urban.org). This takes away the seed capital that Black families need to build wealth. Two out of three families with an incarcerated member cannot meet basic needs like food and housing because of these costs. This means the economic shadow of the legal system is passed down to the next generation. Children grow up in households that are struggling because of debts their parents cannot escape.
The Lifetime Burden of Administrative Fines
The time allowed for the government to collect these debts is also a major issue. In some places, the law allows the state to collect court debt for a very long time. For example, in Virginia, the law allows for a 60-year collection window for certain court debts (urban.org). This means a mistake made in a person’s youth can follow them for their entire adult life. The state can garnish wages or seize tax refunds for decades. This is much longer than the time allowed for most other types of debt, like credit cards or medical bills.
This long timeframe creates a permanent state of economic disenfranchisement. Even if a person has turned their life around, the debt remains. Administrative surcharges like docket fees, DNA analysis fees, and even library fees add up quickly (publiccounsel.org, wicourts.gov). These fees are often mandatory, meaning a judge cannot lower them even if they want to. This takes away the power of the court to be fair and turns it into a machine for collecting money. It ensures that many Black Americans remain tied to the legal system long after their actual sentence has ended.
Breaking the Cycle for Future Generations
The Urban Institute’s report is a call to action to change these unfair systems. It reminds us that today’s fees are the descendants of the post-Civil War Black Codes. While the methods have changed from convict leasing to user-funded courtrooms, the result is the same. Wealth is being systematically taken from Black communities (urban.org). This prevents millions of people from achieving true economic mobility. To fix this, cities and states must find ways to fund their justice systems without relying on the poor.
There are some signs of progress as more people learn about this shadow tax. Some states are starting to reform their laws to stop suspending licenses for non-payment of fines. Others are looking at reducing the time debt can be collected. However, as long as the legal system is used as a revenue source, the pressure to extract wealth will remain. True mobility requires a system that prioritizes public safety and fairness over profit. Ending these predatory practices is a necessary step toward closing the racial wealth gap and ensuring that the American Dream is available to everyone.
About the Author
Darius Spearman is a professor of Black Studies at San Diego City College, where he has been teaching for over 20 years. He is the founder of African Elements, a media platform dedicated to providing educational resources on the history and culture of the African diaspora. Through his work, Spearman aims to empower and educate by bringing historical context to contemporary issues affecting the Black community.
