Budgeting and Forecasting

Segmented Pricing for Fines and Fees

Cover of Report.

Cities and counties across the U.S. increasingly rely on fines and fees to balance their budgets. However, fines and fees disproportionally fall on low-income residents who often are strained to pay.  Therefore, local governments must become savvier about how they manage fines and fees. This paper contends that a pricing strategy called “segmented pricing” actually increase the revenues local  governments can raise from fines and fees while also reducing the hardships that fines and fees can place on low-income citizens. The essence of segmented pricing is to charge the citizen the price they can afford—no more, no less.