Those Pesky Fines

Imagine if $50 parking tickets were routinely settled for $5. Would that deter you from illegally parking your car?

Why do I bring up such foolishness? Because something similar happens regularly with our own Department of Planning and Permitting (DPP), only on a much larger scale. During the 12-month period ended March 31, 2014, DPP waived approximately $6.9 million out of $7.9 million of fines that were assessed. Yes, that’s right. More than 85% of the fines were forgiven or waived. This practice has been going on for decades.

The DPP imposes fines for about a dozen different types of violations, including commercial use of residential properties. As one might suspect, when these fines are reduced, property owners may simply consider them a cost of doing business rather than as a penalty for breaking the law.

In one case, fines of over $250,000 accumulated over a period of years, and the violators paid a mere 10%. In another, a homeowner was fined about $109,000 and ended up paying about $5,700. The fine was so insignificant compared to the massive revenue from the illegal business operations, that former employees opened up shop a couple of miles down the road operating the same business and breaking the same laws blatantly.

Some communities and neighborhood boards have expressed their concern that steeply reducing fines waters down the law intended to protect the “quiet enjoyment” of privately-owned properties in residential neighborhoods. In response, Councilmember Chang introduced Bill 50 that would require council approval of fine reductions.

The bill has met with strong resistance from the administration. “Punishment is not the main intent” of the fines.” Fines are also “not intended to be a source of revenue . . . but rather an enforcement mechanism that is intended to deter unlawful conduct . . . .”

In its testimony, the city also stated that each case is “unique” and would add overhead and complexity if the council were to review the “hundreds” of cases each year. (Note: 136 cases were presented in 2014.)

Well okay, maybe that’s not the best solution. I had suggested requiring minimum fines be imposed. That was shot down by Councilmember Chang because of an example provided by DPP involving an elderly woman whose son was operating an illegal business out of her home. In negotiating the fines, she claimed she had no control over her son. We weren’t told how much they reduced her fine.

The IRS abates less than 50% of penalties it assesses, and requires that the taxpayer show “reasonable cause” for the IRS to consider a compromise. To illustrate just how seriously the IRS pursues compliance, take the story of Al Capone. Capone was never pinned for murder, racketeering, extortion, bootlegging or vice. He did seven years for income tax evasion.

Abraham Lincoln said that “Laws without enforcement are just good advice.”

A policy of diluting penalties to a wrist slap sends a clear message that there’s no penalty for flagrantly ignoring the law. Worse, it tells those who do obey the law that there’s no reward for being good citizens. It’s time to stop this practice. Perhaps in addition to requiring minimum fines, an appeals process could be used for cases in which the owner has reasonable cause for disobeying the law.

What do you think?

To see more information on Bill 50 and related testimony, go here:  http://www4.honolulu.gov/docushare/dsweb/Get/Document-151286/BILL050%2814%29.htm