The Three Percent Fee on Bail

How one small fee tells a big story about New York’s criminal justice system.

A receipt for bail showing the 3% fee (acquired by Betterbail)

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Big Little News

“13 Russians Indicted as Mueller Reveals Effort to Aid Trump Campaign,” read the New York Times’ front page story this past Saturday, February 17. Given the news of the day, it’s no shock that a decision by the New York City Department of Finance (DOF) to end an obscure, century-old administrative fee garnered little fanfare. But this fee — a three percent surcharge on bail refunds for defendants who are convicted or plead guilty — represented a significant, though rarely discussed, injustice. Bail refunds were docked by hundreds and sometimes thousands of dollars for defendants who made every court appearance and met every condition of bail. In total, New York City defendants and their families — a disproportionately low-income group — were charged millions of dollars, with no supportable justification.

This seemingly trivial legislative shift, nearly a year and a half in the making, says a great deal about the state of criminal justice reform in New York. From the slow, sporadic journey that the bill took through New York City’s bureaucracy to the problematic role of fines and fees throughout the criminal justice system to the shortcomings of the legislation itself — and politicians’ tendency to gloss over such pesky details — the elimination of this fee is indicative of the many obstacles that hamstring criminal justice reform in New York.

A Terrible Idea

This fee, known as “poundage,” is nothing new. Originally instituted to allow sheriffs to collect an administrative fee for property they seized or held, it has been a little-known feature of New York’s criminal justice system since at least 1891, according to the New York State Unified Court System, though there are references to poundage in The New York Times (then The New-York Daily Times) as early as 1855. Regardless, the law that today docks convicted defendants’ bail refunds by three percent stems from a law written in the days when buffalo roamed and Butch Cassidy and his bank-robbing Wild Bunch terrorized the American West.

Today, the fee is formally known as GMU § 99-m. Two percent goes toward administrative costs of holding bail proceeds — in other words, the costs of running the bail system itself. Even setting aside the fact that many innocent people plead guilty just to avoid jail time, and that it is often a defendant’s friends and family who post bail, the idea that convicted people should foot the bill for the bail system is hard to swallow. “The evil here, it seems to me, is the whole notion that we should fund the criminal justice system off the backs of offenders,” said Mark Kleiman, Professor of Public Policy and head of the Crime and Justice program at NYU’s Marron Institute. “That’s just a terrible idea.”

Around 1961, New York’s legislature tacked on an additional one percent to go toward Alternative to Incarceration (ATI) programs. Though a worthy cause, charging offenders to fund them is, again, questionable. Equally troubling are the findings of a 2014 audit by the Office of the State Comptroller, which showed the Department of Finance’s Court Assets Department with an unaccounted-for surplus of over $2.4 million in its accounts — a discrepancy that DOF attributed to the fees it had collected for ATI programs. Yet the audit found that DOF should have collected over $3.3 million for these programs. Worse still, DOF was apparently not distributing the funds to ATI programs at all, holding the money in its financial accounts instead.

Bookkeeping issues aside, this fee is just one of many sprinkled throughout the criminal justice system, adding up to a machine that exacerbates the destitution of already impoverished communities. “A large fraction of offenders are poor and their poverty contributes to their crime problem,” said Kleiman. “It’s insane to handle them by taking their money.”

Of the initial proposal to eliminate the fee, Tina Luongo of New York’s Legal Aid Society said, “For years, many of our poorest clients have not only been forced to pay bail to buy their release from jail, but they have also been hit with a three percent fee for posting bail that is not returned. For those living paycheck to paycheck, or for those out of work, losing money for an administrative fee is simply an additional hardship that effectively criminalizes their poverty.”

Kleiman echoed this sentiment. “Much of the damage the criminal justice system does is to impoverish people — and in particular, saddling them with obligations that make it harder for them to live law-abiding lives.”

422 Days

Given its many failings, it is no surprise that former New York City Council Speaker Melissa Mark-Viverito, an advocate for criminal justice reform, proposed eliminating the fee. On September 12, 2016, Mark-Viverito announced the proposal as part of a Department of Correction reform package, saying that it would stop family members from being “needlessly taxed for posting bail when a defendant makes all their court appearances.”

Though the announcement attracted only passing mentions in local news, many hoped it would go into effect in short order. But the actual legislation introduced to the City Council, and then signed into law by Mayor Bill de Blasio on December 22, lacked the teeth of the initial announcement; not eliminating the fee, the bill simply gave DOF the authority to waive the fee “after consideration of the budgetary impact on the city of such a waiver, the purpose of orders of bail and the equitable administration of justice.”

That was the end of the story for nearly a year. Then on November 17, 2017, DOF emerged with a proposal to waive the fee in practice, which was adopted on January 18, 2018 and went into effect last Saturday. In announcing the waiver, the Department stated, “DOF has determined that the small loss in revenue is far outweighed by the benefits of reducing the cost burden on those who can least afford it.” Explaining the slow turnaround, the Department said, “DOF had to study the fiscal impact of the law and follow the City Administrative Procedure Act (CAPA) process for promulgating a new rule. This procedure requires us to publish a proposed rule; hold a public hearing; allow time for comments; if necessary, edit the rule; and then publish the final rule. It typically takes several months.” DOF’s website indicates that the process can take as little as 60 days.

Yet 422 days passed between Mayor de Blasio’s signing the legislation into law and DOF’s rule going into effect. And in the intervening time, defendants and their families continued to pay. DOF estimated that waiving the fee would cost the city about $650,000 in revenue. Some industry experts think this is likely an underestimate. Either way, it is a lot to ask of largely low-income New Yorkers and serves as an example of the tangible ramifications that criminal justice reforms, and lags in their implementation, so often have. It is one thing when a municipal agency waffles over banning news racks near taxi stands. It is something else entirely when their citizens’ lives and livelihoods are on the line.

Inconvenient Truths

The bill itself also leaves much to be desired. Like any law in New York City, there is nothing to prevent a future legislator from deciding that the financial gains are necessary and do outweigh concerns over “the purpose of orders of bail and the equitable administration of justice,” and simply repealing the new rule. Additionally, the fee remains in effect throughout the rest of the state. Governor Andrew Cuomo’s office did not respond to multiple inquiries as to whether the Governor believes that the fee is in keeping with the equitable administration of justice and the purpose of bail, or whether he intends to eliminate the fee at the state level.

But politicians are not ones to draw attention to such inconvenient truths. Inevitably, the press releases and newsletters and announcements fail to mention the hundreds of years this fee persisted without question, the decades of botched oversight and misallocated funds, the hundreds of thousands of dollars forfeited during the city’s glacial proceedings, the fees that continue to infect the criminal justice system, or the millions of people still paying the fee in the rest of New York State.

Lofty promises laced with just enough equivocation to justify unfulfilled aspirations are the bread and butter of politics. Just take Mayor de Blasio’s proposed online bail-payment system. First mentioned in MOCJ’s September 2016 newsletter, the system was originally promised for Spring 2017. Yet to be released, it is now targeted for April 2018. On the yearlong delay, MOCJ commented, “This is ultimately a complex system that marries data from different agencies and includes sensitive financial and personal information as well as very serious security considerations to make sure it functions perfectly. The City must make every consideration in order to build this right.” But New Yorkers have every right to be frustrated by the sluggish pace of such high-stakes reforms — as well as by the preemptive back-patting on the Mayor’s website (“The de Blasio administration created an online bail-payment system”). MOCJ declined to comment on whether this accurately represents the administration’s achievements.

Yet 422 days passed between Mayor de Blasio’s signing the legislation into law and DOF’s rule going into effect. And in the intervening time, defendants and their families continued to pay. DOF estimated that waiving the fee would cost the city about $650,000 in revenue. Some industry experts think this is likely an underestimate. Either way, it is a lot to ask of largely low-income New Yorkers and serves as an example of the tangible ramifications that criminal justice reforms, and lags in their implementation, so often have. It is one thing when a municipal agency waffles over banning news racks near taxi stands. It is something else entirely when their citizens’ lives and livelihoods are on the line.

Or take Governor Cuomo’s recent New York Times op-ed introducing a slate of proposed criminal justice reforms. In it, Cuomo invokes the case of Kalief Browder, whose abuse over three years awaiting trial at Rikers Island Cuomo describes as “so traumatic that Mr. Browder determined taking his life was the only way to stop his continuing pain.” Correctly classifying Browder’s story as “intolerable,” Cuomo goes on to propose that anyone facing misdemeanor or nonviolent felony charges be released without bail — a reform that would not have impacted Browder, who was charged with a violent felony and denied bail for the majority of his incarceration, before his charges were dropped. In the Governor’s defense, he also proposed a measure intended to speed up trials in New York, which might have shortened Browder’s time at Rikers, though it would not have prevented his incarceration altogether. And in Cuomo’s own words, “Some improvement is not enough. Our tolerance for any continuing injustice is repugnant to our position as a progressive government.”

Too Little Too Late

At first glance, the elimination of this fee appears a success story: a harmful, unjust fee was identified and, through the work of the city’s governance, eliminated. “DOF is pleased to be a part of the effort to alleviate some of the financial burden associated with the cash bail process by waiving the 3% fee,” a representative said. But the truth is that the problem still exists. It exists in the form of other equally unfair fees and it exists outside the bounds of New York City.

With the criminal justice system in the hot seat, ostensibly progressive leaders face immense pressure to beat the drum for criminal justice reform. But fixing a system made up of entrenched and entwined institutions requires the kind of unglamorous, nitty-gritty work that doesn’t tend to make the op-eds and the press releases. If substantive criminal justice reform — beyond the waiver of a fee here and there — stands any chance, it will be as important to scrutinize the promises our leaders don’t make as much as the ones that they do.