New York City Looks To Eliminate Hidden Bail Fees

New York City may soon take an important step toward reducing the burden placed on people entangled in the criminal legal system.

This month, the City Council is expected to vote on a bill that would do away with fees levied on people paying bail with credit cards. After creating an online bail payment system last year, the city has passed on the cost of processing those transactions to people trying to get out of jail and those who help them. Anyone using a card online must pay an additional 2 percent fee, while those paying at jail face a 7.9 percent fee charged by private firm JPay.

The 7.9 percent fee collected by JPay is “outrageous,” said Joanna Weiss, co-director of the Fines & Fees Justice Center. Many families have to stretch their resources to afford the average $5,000 felony bail amount, forgoing bills like rent or utilities, cutting back on necessities like groceries and gas, or dipping into savings and borrowing money. “To then charge extra is of course extra hardship.”

But even the city passing its own cost on to people through the 2 percent fee is “problematic,” she added. “It’s like a tax on the very poorest members of our community, people who have not been found guilty of anything.”

And while the percentage may sound small, it can amount to hundreds of dollars, an impossible sum for many people. “The money we’re talking about is meaningful to people and it does have an impact,” noted Councilmember Keith Powers, who introduced the legislation along with Councilmember Rory Lancman. “We should be looking at reducing the cost … rather than adding in fees.”

Mayor Bill de Blasio supports the legislation, said his deputy press secretary, Raul Contreras, “but our goal is ultimately to eliminate cash bail completely.”

Powers is now determining how best to implement the policy change outlined in his legislation. The city could simply pay the credit card fees or renegotiate its existing contract with JPay to eliminate fees. The bill would also require the Department of Correction to add an option to make online bail payments by direct deposit or electronic check.

We should be looking at reducing the cost … rather than adding in fees.

Keith Powers New York City Councilmember

The legislation is one piece of a larger plan by city lawmakers to reduce the burden of fines and fees on families interacting with the criminal legal system. The credit card fee represents “the last remnants,” Weiss said. In 2016, the City Council voted to get rid of a 3 percent fee that had been automatically attached to every bail (which was put into force in February 2018 by the city’s Department of Finance).

An investigation by City & State New York found that the city received $2.49 million in 2015 from a combination of bail fees and bail forfeitures—a huge amount for families to bear but a fraction of the city’s overall $80 billion budget. That revenue is dwarfed by the cost of incarcerating people who can’t afford their bail amounts: $100 million annually, according to a 2018 city comptroller report.

The city recognized “this is not worth the money to us and it just feels like that 3 percent to people who are putting up bail is far more valuable to them,” said Insha Rahman, program director at the Vera Institute of Justice.

Legislation like eliminating credit card fees is one of the tools lawmakers can wield to “reduce the burden on people,” Powers noted. But the City Council is limited in what it can do without statewide bail reform by the legislature.

That reform may be on the horizon. In his recent budget plan, Governor Andrew Cuomo included a proposal to eliminate cash bail, among other criminal justice reforms, and state lawmakers have put forth their own proposals. “Albany has shown us there is momentum” for getting rid of money bail and the resulting fees, Rahman said.

Eliminating money bail would have a significant effect in the rest of New York, which has a long way to go to catch up to New York City’s recent moves to address fines and fees. The state’s  courts outside New York City charge a “poundage fee” of about 3 percent for every bail amount. That means that if someone in Syracuse or Schenectady is facing a $5,000 bail, she has to either come up with that money or pay a portion to a bail bondsman in order to go free before her trial. If she returns to court, she’s supposed to get all of that money back. But if she’s convicted, the court keeps $150 for the poundage fee. (If the charges are dismissed, she gets the $150 back.)

That’s a huge amount of money for most people. “They’re borrowing from family members, going into debt, not paying rent,” Rahman noted. That $150 represents “a couple of grocery bills, that’s the electricity bill, that’s any number of very basic costs that people often forego because they simply are doing everything they can to scrape together money for bail.”

And while the criminal legal system levies many fines and fees, pretrial fees “are particularly concerning because they are all being imposed on people who are innocent,” Weiss said.

They’re borrowing from family members, going into debt, not paying rent.

Insha Rahman program director at the Vera Institute of Justice

In 2017, all city courts across New York State under the purview of the state Office of Court Administration received a combined $245,387 through poundage fees, with one portion flowing to county budgets and the rest to state coffers, according to data obtained by the Vera Institute of Justice and shared with The Appeal. That comes to an average of around $4,000 charged by each city court per year. (In response to a request for comment on the poundage fees, Lucian Chalfen, director of public information for the New York State Unified Court System, said, “We didn’t promulgate it or profit from it. And any change would have to come from the New York State Legislature.”)

“This is taxation to support government,” Weiss said, “an easy way of adding taxes without facing pressure.”

It’s a common tactic nationwide. As municipal and state budgets have decreased since the 2008 financial crisis, courts have increasingly relied on fines and fees to fund operations or pad general funds. Bail fees are part of “a broader pattern across the country of shrinking court budgets or neglecting to raise taxes in states,” said Mitali Nagrecha, director of Harvard Law School’s Criminal Justice Debt Initiative. “This becomes a really easy way to fill gaps in the budget.”

“I don’t know a single money bail system across the country that doesn’t have some variation on bail fees or surcharges,” Rahman said.

Many bail surcharges are buried in administrative rules and regulations that outline when and how people should be assessed with fines and fees. Alabama charges either a $35 fee plus 3.5 percent of each bail bond, or $100, whichever is greater. Mississippi charges a $25 flat fee with an additional $20 or 2 percent, whichever is greater. Pennsylvania lets courts set bail fees to fund their criminal legal systems. Clerks in West Virginia can charge $25 for each bail bond plus $10 for any services in processing it. Louisiana courts get a 1.8 percent cut of every bail amount set, an arrangement that a federal judge ruled was unconstitutional in New Orleans in August.

Many of these fees appear to create a conflict of interest, especially when they are funneled directly to fund court operations as in Louisiana: The higher judges set bail amounts, the more revenue is generated through the nonrefundable fees. Even if the revenue isn’t as significant as some judges or lawmakers may perceive it to be, “there’s a really clear incentive for the courts to impose bail fines and fees,” Rahman noted.

In some places, like New York, the fee won’t be taken from a bail amount if the charges are eventually dismissed. But that’s not true everywhere. Many courts pocket the extra money even after an acquittal.

In one case in Illinois, Curtis Lovelace managed to come up with $350,000 for a bail bond, showed up to court, and was acquitted. But the state kept $35,000 as a nonrefundable fee. The trial court denied his motion to return the money, noting that circuit clerks used the revenue to fund their office.  

The challenge is getting courts and lawmakers to recognize that these fees do not actually generate a significant source of revenue compared to the cost of putting someone in jail. “The cost benefit argument [in favor of bail revenue] is not there,” Rahman said, “because they’re going to have fewer people in jail.”

But the money saved by jailing fewer people, which bail reform advocates say in the long run will dwarf the revenue from bail fees, is still intangible in the near term. “The problem is that there isn’t an immediate replacement of that revenue source,” pointed out Cherise Fanno Burdeen, CEO of the Pretrial Justice Institute. The savings won’t manifest until, for example, so many fewer people are jailed that an entire wing or facility is shut down. So lawmakers need to take a long view and be patient.

Powers sees his legislation as part of a larger project: to make sure “that people who are incarcerated don’t have additional costs being added to their incarceration and that we have a system that is not about penalizing people through fines and fees.”

It’s meant to set a larger example to the rest of the state and the country. “New York City and states across the country should not be profiting off of people’s misery,” he said. The movement to reform bail isn’t just about changing how it’s used, he said, but also “trying to reduce the cost and impact on the families that are forced to pay bail.”

“Even while we wait to get the big reforms at the federal and state level, we’re going to try to reduce the financial impact on people,” he added.