A year ago, it was estimated that Houston is owed $900 million in outstanding fees and fines (See here). The estimate was eventually changed to $692 million since the original estimate included millions of dollars in citations that had not yet been cleared up in court.
Although the estimated debt amount has been reduced, I have serious doubts that the city will ever collect the money. Nearly 70% of the debt is more than two years old, so odds of collecting at this point are slim to none. Also, the city is owed $295 million in unpaid ambulance rides. Most of that money came from uninsured and indigent individuals.
Even when you take away the $295 million in ambulance fees and the $25 million in red light camera fees (another fee that people are unlikely to pay), the city is still looking at $372 million. Then consider that the city hardly, if at all, goes after debt older than two years. So when you account for that, the real number is closer to $210 million. Although it is a loss of $482 million from what the city should be paid, $210 million is still a lot of money. In my opinion it is unlikely that we will see much of that money collected. Here’s why:
1. So many people know that there will be no action taken against them if they do not pay. If you don’t pay the red light camera fee, you can still renew your vehicle, and you will not be taken to court. It is similar with many other fees people owe. If you don’t pay, you can still obtain permits from the city and receive all the same benefits the city has to offer as someone who owes nothing. For the most part, the city doesn’t even report debt to credit bureaus!
2. People don’t take it seriously when the mayor or any elected official declares that it is time to “get tough” and “crack down” on debtors. Said time and time again, this concept fizzles and fades. No one will take it seriously until there is real action taken. If people don’t take it seriously, they will not pay.
3. The different databases among city departments are not integrated. So if a Houstonian has debt in one department, he or she can partake in another city function in a different department (receive a permit, for example) without anyone ever knowing.
The obvious solution here is to integrate city databases and refuse certain city services to those who owe a debt. With that being said, the city should also not penalize someone for being poor. We should make it easy (yet necessary) for people to pay their bills. Allow easy payment plans and then open city services to those who are following their payment plan.
Furthermore, I’m guessing a lot of these fees are pretty unnecessary in the first place, so taking a serious look at which ones we can do away with altogether is never a bad idea.