Threat of Tennessee driver's license suspension doesn't help debt collection, report finds

• The threat of license suspensions seems to have little impact on whether people pay court debt, a new ThinkTennessee analysis found.
• Last year's third stimulus check did increase collection rates, however.

Tennessee can suspend the licenses of drivers for failure to pay court debt. The threat of suspension is supposed to incentivize the payment, but the policy seems to have little impact on how much money courts are able to recoup, according to a new analysis from ThinkTennessee.

Instead of incentivizing people to pay the fees and fines they owe to local courts, the practice creates additional challenges for people who are often living in poverty, according to ThinkTennessee, a nonpartisan, nonprofit think tank. Losing a driver’s license could make it difficult to attend or find a job at the same time one is needed to pay off court debt, for example.

“By making it harder to get to work and earn the money needed to pay off court costs, driver’s license revocations risk being a counterproductive policy, potentially trapping low-income Tennesseans in a cycle of court debt and poverty,”  the report’s authors wrote. They added that the state should consider ending the practice. 

“Removing this government imposed barrier would allow greater opportunities for Tennesseans to get back on their feet, earn money, and contribute to the state’s economy,” they wrote. 

Tennessee implemented the practice of suspending driver’s licenses for failure to pay court fees older than a year in 2011. In 2018, however, a federal court halted the practice, ruling it unconstitutional. But the stop was only temporary. In 2019, Tennessee instituted payment plans for low-income debtors and the revocation of licenses started again in July 2021. 

The three-year pause on court debt-related license suspensions provided ThinkTennessee with a way to compare court debt collection rates when the state both was and was not suspending licenses. If the suspensions really did incentivize people to pay their court debts, as proponents of the law argued, then it stands to reason that people would be less likely to pay their court debt during the three-year period when there was no threat license revocation.

But the data showed there was little difference between when the state was revoking licenses and when it wasn't. The collection rate for court fees was 34% between July 2018 and June 2021, when there were no debt-related suspensions. Both before and after the three-year break, the collection rate was 36%, a slightly higher rate the report called “not statistically significant.” 

Court debt can come from fees, fines and other taxes, which can help fund local courts. Tennessee law authorizes more than 250 fees and taxes related to criminal proceedings, according to the nonprofit Sycamore Institute. 

These fees can be an outsized burden for many. Defendants with court debt typically have incomes between 39% and 69% of the federal poverty level, according to an Alabama analysis cited by ThinkTennessee. That range represents an annual income of between $5,300 and $9,377. 

ThinkTennessee used data from the Tennessee Administrative Office of the Court's General Sessions Data Repository, which was launched in 2018, the report said. But previous analyses have also called into question the effectiveness of the practice. 

For example, the federal judge who halted the suspensions in 2018 cited an analysis that showed that Tennessee revoked 146,211 driver’s licenses for failure to pay court debt between 2012 and 2016. But only 10,750 of those licenses were eventually reinstated. 

While the stopping and starting of license suspensions had little impact on collection rates, other events did demonstrate noticeable differences. Collection rates fell during the initial pandemic closures in April 2020 to around 20 percent. Likewise, collection rates increased to more than 45 percent after the third federal stimulus was distributed last year.

Josh Keefe is an investigative reporter with The Tennessean. Email him at jkeefe@tennessean.com or follow him on Twitter at @thejoshkeefe.