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Citzen Outrage Over $300 Fines

March 2004

The State of Michigan is starting to send letters to thousands of motorists, telling them that their driver's licenses will be voided if they don't pay surcharges on top of the fines for various driving offenses.

Under a new law that took effect October 1, 2003, drivers convicted of serious offenses (such as drunk driving) will owe the state up to $2,000 after paying their fine. However, along with serious offenses, the new law created a $300 surcharge for failure to show proof of auto insurance. The actual fine for failure to show proof is usually waived by a court if a driver can prove that coverage was really in effect. But if the court enters a conviction, the driver owes a $300 surtax to the state which can't be reduced or waived.

Over 32,000 drivers have been notified so far of the $300 charge. An unknown fraction of those drivers were insured, but simply couldn't find the proof when police asked for it.

The surcharge notices will come on drivers' birthdays for two years following conviction, or in years when drivers have more than 6 points on their driving records. Motorists are especially incensed to receive the $150-a-year bills for failure to show proof-of-insurance.

The proof-of-insurance issue was foreseen by at least one interest group. The National Motorists Association, a motorists' rights group headquartered in Wisconsin, says the outrage over the heavy fines could have been avoided. "We saw this coming the day the bill was introduced and tried to warn legislators about it, but no one listened. They were only interested in the revenue they'd collect," says Eric Skrum, spokesman for the organization.

Circuit courts have begun changing proof-of-insurance violations to other offenses, avoiding the state surcharge. That sort of thing isn't really legal, but traffic courts do it all the time. "Courts will often do this if it lets them keep a fine they wouldn't get otherwise," says the Motorists Association's Eric Skrum.

A bill to repeal the $300 surcharge for failure to show proof of insurance has passed the Michigan House. The reform bill (House Bill 4308) repeals the $300 surcharge and all fines if a motorist proves to the court that insurance was in effect. The bill allows the court to charge $25 for the ticket. However, the bill also increases the surcharge for actually operating without insurance from $1,000 to $1,600. The surcharge is in addition to the fines and costs the court may impose, and another $40 mandatory state tax on all traffic convictions. So a driver convicted under the reform bill of driving without insurance would owe almost $2,000, and would still have to purchase insurance before resuming driving. In other words, the solution is worse than the problem it's supposed to solve.

"Many people convicted under this will simply continue to drive without insurance and without a license," says Skrum. "Repeat violators can get hopelessly in debt to the state, which is why we call this program motorist debtor's prison. Michigan still has time to avoid this situation if the legislature acts now," says Skrum.

The bill has been referred to the Senate Appropriations Committee (Senator Shirley Johnson, R-Royal Oak, chair) but the Committee has taken no action on it.