R. Barry Ruback
Pennsylvania State University

OTHER THAN TRAFFIC offenses, economic sanctions have been used relatively infrequently in the United States, in large part because of the country's heavy reliance on incarceration. Moreover, financial penalties are considered to have no effect on wealthy defendants, for whom the amounts are assumed to be inconsequential, and to be unfair to poor defendants, for whom the additional monetary burdens are assumed to be overwhelming.

Despite these arguments for not using economic sanctions, there are three reasons why they are being imposed more frequently than in the past. First, the costs of criminal justice operations are becoming so high that offenders are now expected to pay at least part of those costs. Second, concern for victims has increased and will continue to increase, causing restitution to be awarded more frequently. Third, there are pressures for alternatives to prison because of the high cost of incarceration, the limited number of spaces available in some prison systems, and the belief of some people that long periods of incarceration are unjustifiable on grounds of just deserts and are ineffective in deterring future crime.

Purpose, Imposition, and Payment of Economic Sanctions

This study uses data from Philadelphia during the period 1994–2000 to examine the imposition of three types of economic sanctions: fines, costs, and restitution. Although research typically focuses on only one of these economic sanctions, in actual cases they are usually not used in isolation. That is, sentencing often involves multiple economic sanctions used in conjunction with probation and sometimes incarceration.

Fines. Fines are monetary penalties paid by the offender to the state. Fines have several advantages over other types of penalties (Hillsman,1990). They are obviously punitive. They can be tailored to the seriousness of the particular crime and to the specific individual's criminal history and resources. They are also flexible, since they can serve as sole penalties or can be combined with other sanctions, ranging from treatment to incarceration. Moreover, they allow the offender to remain in the community, work, and avoid the stigma and social costs of incarceration (Gordon & Glaser, 1991).

Within a jurisdiction, judges usually apply the "going rate" for fines, such that all violators of a particular offense are obligated to pay similar amounts (Hillsman & Greene, 1992). Because judges tend to use this going rate for fines, however, they do not adjust the seriousness of the penalty to the particular defendant (Hillsman & Greene, 1992). And, since this going rate is usually low (in order to accommodate the poorest offenders), fines have little penalty value for affluent offenders. Typically, judges' adjustments to fines are at the back end, rather than at the initial sentencing. That is, judges might sometimes excuse the remaining unpaid portion or simply let the probation period expire without enforcing the fine (Hillsman & Greene 1992).

Costs. Costs refer to money paid by the offender to the state to partially cover the expenses of prosecution, confinement, and community supervision. In some cases, these funds also support expenditures such as victim/witness assistance and victim compensation. Generally, the amount of costs imposed is a standard rate for each count. Thus, the only question in these courts is whether to impose costs, not how much.

Olson and Ramker (2001) found that judges in rural areas were significantly more likely than judges in urban areas to impose probation fees, probably because rural judges are likely to be more responsive than urban judges to their communities and more concerned with the imposition of justice in individual cases than with the processing of large numbers of cases (see also Weisheit, Wells, & Falcone, 1995). These researchers also found that higher amounts of probation fees were paid in rural areas, probably because judges in rural areas were concerned that offenders pay something, whereas judges in urban areas were concerned that fees should be imposed and enforced only if they were set at a level high enough to justify the time and expense of collection.

Restitution. Restitution refers to a convicted offender's court-ordered obligation to compensate victims for their losses resulting from the crime. Most often, restitution involves an offender making monthly payments to cover the costs of damaged or stolen property, although these monies may also be ordered to cover medical expenses and lost wages (Harland, 1981). Restitution is widely supported because it both addresses victims' needs for compensation and meets the criminal justice system goals of punishment and rehabilitation. Today, every state has a law addressing restitution, and 29 states mandate restitution unless the judge gives compelling reasons for not doing so (Office for Victims of Crime, 1998, p. 356), consistent with the call made by the President's Task Force on Victims of Crime (1982).

In one study of restitution, Outlaw and Ruback (1999) examined adult probation cases from Allegheny County (Pittsburgh), Pennsylvania in which restitution was or could have been a condition of probation. Results indicated that judges ordered restitution most often when damages were easy to quantify and that offenders were most likely to pay the restitution when they were able to pay and when the victim was a business. Restitution payment was negatively related to rearrest, and this effect was especially strong among married persons, who were more integrated into the community. This finding is consistent with an experimental study in which juveniles randomly assigned to formal restitution programs had lower recidivism than juveniles randomly assigned to other dispositions (Ervin & Schneider, 1990).

Restitution programs have generally not been seen as successful because 1) there is a reluctance to impose restitution on offenders who are assumed not to be able to pay it, 2) payment on restitution orders typically follows other financial obligations (e.g., costs, fines), and 3) there is often ambiguity about who is responsible for monitoring, collecting, disbursing, and enforcing restitution payments (Office for Victims of Crime, 1998, p. 358). Thus, it is not surprising that collection rates of restitution are low, ranging in two national studies from 45 percent (Smith, Davis, & Hillenbrand, 1989) to 54 percent (Cohen, 1995).

Multiple economic sanctions. Opposite predictions could be made about the relationship among these three different types of economic sanctions. On the one hand, one could hypothesize that they would all be positively related, in that judges might believe that if offenders can pay one, they can pay them all. On the other hand, one could hypothesize that they would all be negatively related; that is, an increase in one type of economic sanction would result in lower amounts of other types of economic sanctions. Such a pattern would be evidence that judges recognize offenders' limited financial resources and consider offenders' ability to pay in setting the amounts of economic sanctions.

A study of probation fees in Illinois found support for both hypotheses. Olson and Ramker (2001) found that probationers ordered to pay both fines and probation fees had lower average monthly fees than did probationers ordered to pay only fees. However, Olson and Ramker found that there was no trade-off between fees and other penalties when those other conditions were non-economic (e.g., treatment, community service). They also found that probation fees were more likely to be imposed and more likely to be paid if fines were also imposed, a pattern that suggests the imposition of some economic sanctions is positively related to ability to pay.

A study in Pennsylvania also suggests that there is no clear pattern to the imposition of economic sanctions. In this study of four medium-sized urban counties (Ruback, Shaffer, & Logue, 2004), the imposition of fines was negatively related to the imposition of restitution. The imposition of costs was positively related to the imposition of fines but unrelated to the imposition of restitution. When these sanctions were imposed, the amounts of fines, costs, and restitution were positively related.

In their analysis of economic sanctions in misdemeanor cases in Los Angeles, Gordon and Glaser (1991) found that the amount of financial penalties imposed (restitution, fines, cost of probation supervision) was affected by the type of crime (assaults, burglaries, drug crimes, DUI, or theft). Compared to drug offenders, offenders convicted of burglary, DUI, and theft received significantly higher financial penalties, a result that suggests judges did not believe financial penalties were appropriate for drug offenders. Finally, they found that the predictors of the different types of economic sanctions were the same, a result that suggests judges treated restitution, fines, and costs similarly.

The present research was designed to examine the relationship among costs, fines, and restitution in Philadelphia, the fifth most populous city in the United States and a city with one of the country's highest violent crime rates (Federal Bureau of Investigation, 2003, Table 6, p. 39). This research is an improvement over prior studies in that it had a large sample of both misdemeanor and felony cases and that it examined cases over a seven-year period.

Statutory Changes in Pennsylvania

Aside from looking at the relationship among three types of economic sanctions, we were also interested in looking at the effect of the 1995 statutory change making restitution mandatory. In 1995 Pennsylvania made mandatory the paying of restitution to victims whose property was stolen or damaged or who suffered personal injury as a direct result of a crime (18 Pa. C.S.A. ¤1106). Moreover, judges were to impose full restitution regardless of the offender's financial resources. Consistent with results in four medium-sized urban counties in the state, we expected an increase in the imposition of restitution after the statutory change and either no effect or a decrease in the imposition of fines and costs. In 1998, Pennsylvania enacted a second statutory change regarding restitution. Under this law, 50 percent of all payments by an offender had to be directed to restitution for victims. We expected this change to result in slightly higher rates of imposition of restitution, as judges would be more likely to believe that ordered restitution would reach victims.  

Method

Data for the years 1994–2000 were taken from computer files maintained by Philadelphia. Cases were sampled on the basis of crimes that were considered to be "restitution eligible," that is, cases with an identifiable victim (an individual, a business, or a state agency). This classification excludes DUI and drug offenses. Also excluded are cases determined to have no identifiable victim, based on crimes listed in Title 18 (Crimes and Offenses) of Pennsylvania Consolidated Statutes Annotated.

Description of the Sample  

For each case there were 20 items of information. The first, the variable on which cases were selected for inclusion in the study, was the major charge. Under this selection procedure, there were 108 crimes for the years 1994 through 2000. Of the 84,970 cases in the data set, 84,185 (99 percent) were accounted for by 33 crimes with at least 50 cases.1 The remaining 75 types of crime accounted for 778 cases, and 13 cases were missing this information. Across crime types, three dummy variables were created to capture the nature of these crimes: a) attempted vs. completed, b) conspiracy vs. no conspiracy, and c) violent vs. property.

The data contained information about whether or not there was a private criminal complaint, whether the court was a municipal court (which handles misdemeanors) or Court of Common Pleas (which is a court of general jurisdiction), the date of arrest, the type of attorney (coded as public defender or court-appointed attorney versus a private attorney), the date of sentencing, the amount of fines imposed, the amount of restitution imposed, whether costs were imposed, whether probation was imposed, the starting date of probation, the expiration date of probation, the actual termination date of probation if it were different from the expiration date, the gender of the offender, the race/ethnicity of the offender, the method of case termination, the reason a case would still be open after the expiration date, the date of rearrest (if any), and the number of days between the date of sentencing and rearrest.

There were a total of 84,970 cases in the data set, broken down by year as follows: 12,146 in 1994; 12,210 in 1995; 12,683 in 1996; 12,445 in 1997; 12,704 in 1998; 12,017 in 1999; and 10,765 in 2000. Of these cases, 54,812 were felony cases processed in Common Pleas Court and 30,151 were misdemeanor cases processed in Municipal Court (7 cases did not have information about which court was involved).

Table 1 presents a description of the cases in the data set, by type of victim (private individual/business vs state) and overall. As can be seen there, most of the offenders were black. The remaining offenders were white (21 percent), latino (5 percent), other (2 percent), or missing (1 percent). Most offenders committed property crimes, and most did not have a private attorney.

The 5,415 cases in which the state was the victim were analyzed separately because they differed substantially from cases in which the victim was a private individual or business. Most important, there were gender differences. Women committed 14 percent of the crimes where the state was not the victim, but 83 percent of the crimes in which the state was the victim. Blacks committed 71 percent of the crimes in which private individuals or businesses were the victim, but 83 percent of the crimes in which the state was the victim. The analyses were limited to those individuals who were 16 years or older.

Results

Three types of economic sanctions were investigated: restitution, fines, and costs. The results are presented in two parts, relating first to the imposition of each sanction overall, and specifically by year. Second, there is a multivariate analysis of the imposition of each type of sanction.

Change Over Time

One of the issues we were interested in was whether the imposition and payment of restitution changed over time, and, if so, what factors might be related to this change. Although there was an increase over time in the proportion of cases in which restitution was imposed in cases in which private individuals/ businesses were the victims, there was a decrease in the proportion of cases in which costs and fines were imposed (see Table 2). Although there was a significant increase in the average amount of restitution ordered, there has not been a comparable increase in the average fine ordered. A pre/post test of the impact of the 1995 mandatory statute indicated a significant increase in the percentage of cases in which restitution was ordered, from 16 percent (for the year 1994) to 22 percent (for the years 1996–2000), X² (1, 72760) = 239.95, p < .001 (Yates' correction). A pre/post test of the impact of the 1998 statute indicated a small but significant increase in the percentage of cases in which restitution was ordered, from 21 percent (for the years 1996 and 1997) to 24 percent (for the years 1999–2000), X² (1, 47910) = 72.09, p < 0.001 (Yates' correction).

Individual and Business Victim Cases

Cases in which individuals and businesses were the victims were analyzed in terms of the imposition of economic sanctions, the payment of economic sanctions, and the effect of economic sanctions on recidivism.

Imposition of economic sanctions. Table 3 presents the results of logistic regression analyses of the imposition of restitution, fines, and costs in those cases in which the private individuals and businesses were the victims. Restitution was significantly more likely to be ordered for younger individuals, for whites, for individuals who had private attorneys, for cases in Common Pleas court, for cases after the 1995 statute was imposed, for probation cases, and for cases in which costs were imposed, and were significantly less likely to be imposed for cases in which fines were imposed. Fines were significantly more likely to be imposed for males, for older individuals, for whites, for offenders with private attorneys, in Municipal Court, when costs were also imposed and were significantly less likely to be imposed when restitution was imposed. Costs were significantly more likely to be imposed for older offenders, for black offenders, for cases after the 1995 statute, for offenders who had private attorneys, in Municipal Court, when fines were also imposed, and when restitution was also imposed. Overall, then, costs were positively related to both restitution and fines; restitution and fines were negatively related. This pattern suggests, consistent with Olsen and Ramker's finding, that judges make tradeoffs when imposing restitution and fines, requiring offenders to pay one or the other. However, if judges impose either restitution or fines, they are also likely to impose costs.  

State Victim Cases

The 5,415 cases in which the state was the victim were analyzed separately from the other cases because they differed in substantial ways from cases in which private individuals or businesses were the victims. Ten different property crimes were included in this category (e.g., tax violations, medicaid fraud, food stamp fraud), but public assistance violations accounted for 5,295 (98 percent) of the cases. As noted earlier, offenders in this category of state victim crimes were primarily female and black. Restitution was imposed in 4,494 cases (83 percent). The range of restitution orders was from $15 to more than $100,000 (M = $4,382; Mdn = $3,000; Mode = $2,500). Fines were imposed in only 53 cases (1 percent). The range of fines was from $50 to more than $100,000 (M = $6,406; Mdn = $750; Mode = $500). Costs were imposed in 1,880 cases (35 percent).

Table 4 presents the results of logistic regression analyses of the imposition of restitution, fines, and costs in those cases in which the state was the victim. Restitution was significantly more likely to be ordered for welfare cases, for individuals who had private attorneys, and for cases after the 1995 statute was imposed and was significantly less likely for male offenders, for cases in which fines were imposed, and for cases in which costs were imposed. Fines were significantly more likely to be imposed when costs were also imposed and were significantly less likely to be imposed when the offender was black, for welfare cases, in Common Pleas Court, and when restitution was imposed. Costs were significantly more likely to be imposed for male offenders, for offenders who had private attorneys, in Common Pleas Court, and when fines were also imposed, and were significantly less likely after the mandatory statute and for welfare fraud cases. Overall, then, fines and costs were positively related; restitution was negatively related to both fines and costs.

Discussion

This study examined three types of economic sanctions—costs, fines, and restitution—for both misdemeanors and felonies and for both private individual/business victims and the State as victim.

Summary of the Findings

Overall we found that restitution was more likely to be imposed for property crime whereas fines and costs were more likely to be imposed for nonproperty crimes (most of which were violent). One of the clear findings from this study was that the 1995 statute making restitution mandatory had an effect: both restitution imposition rates and restitution amounts ordered were higher after the statute than before.2 Contrary to our expectation, restitution was awarded to the State at a higher rate than to private victims, and this difference was even more pronounced after the statutory change making restitution mandatory.

The increase in imposition rates for crimes against private individuals and businesses after the statute was probably not greater for three reasons. First, despite the mandatory nature of the statute, it may be that in practice restitution is ordered only if the victims request it. It is likely that victims are not aware that they must make this request. Second, most of the offenders are probably poor and the odds are low that they would be able to make payments. Third, the amounts of money involved are relatively small, and judges, prosecutors, and probation officers may not believe that the money that could be recovered is worth their involvement.

In contrast to private victims, offenders of most crimes in which the State is the victim were ordered to pay restitution, and the increase after the statutory change was even more dramatic. This effect of greater benefit to the State than to private individuals and businesses probably represents an unintended consequence, in which the State was simply better able to meet the legal and practical requirements of receiving restitution. Specifically, with the State, there was no possibility of victim precipitation or victim responsibility, the state agencies involved asked for restitution, the exact amounts of loss were known and easily quantified (see Outlaw and Ruback 1999), the offenders in the non-welfare fraud cases probably did have money (since they were relatively more likely to have private attorneys) and therefore there was a greater probability of payment, and the average amounts of money involved were relatively large.

This study also found no simple relationship among the three different types of economic sanctions examined here. On the one hand, judges appeared to make tradeoffs between restitution and fines for both individual/business victims and the State as victim. Thus, when the statute required higher rates of restitution, judges appeared to balance that increase with a decrease in the imposition of fines. On the other hand, however, the relationship between fines and costs was positive for both individual/business victims and the State as victim. That is, if judges imposed fines, they were also likely to impose costs.

Taken together, these patterns suggest that judges might be looking at offenders' ability to pay these sanctions. When the choice lies between restitution to victims and fines paid to the government, judges follow the mandatory law and impose restitution. However, when payments are due to the State and County governments through fines and fees, judges impose both or do not impose either.

This explanation is consistent with results from an anonymous statewide survey concerning the imposition of restitution, which was sent to all criminal court judges in the State in September 2001. Of the 147 judges responding, 17 identified their county as Philadelphia. Typical of these judges' views of restitution was the statement of one: "Except in fraud and theft/burglary cases, we rarely see requests for restitution. Most of our offenders are too poor to pay anything substantial." Another judge wrote, "You can't get blood out of a stone. When you have rapes, aggravated assaults, gun-point robberies of those with no skills who have never held a job, what good is restitution? They will be in jail for five to ten years and have no assets. It's the exception, not the rule, in the major cases in a large city."

More quantitative responses were also consistent with the view that most offenders in Philadelphia could not afford to pay restitution. A set of t-tests comparing the responses of these 17 judges from Philadelphia to the remaining judges indicated several significant differences.3 Compared to the judges in the rest of the state, Philadelphia judges were more likely to take type of offense into account, more likely to lower fines in order to reduce the total economic sanctions, less likely to say they impose restitution for violent victims, more likely to say collecting restitution is a problem, more likely to impose indirect criminal contempt charges for failing to pay, more likely to believe that too much time elapses before payment is made, more likely to believe that there is inadequate contact with offenders, more likely to believe that inadequate priority is given to warrants, and more likely to believe that offenders think nothing serious will happen to them.

These responses suggest that judges in large cities impose economic sanctions differently than do judges in suburban and rural areas. Future research should examine how tradeoffs in economic sanctions are made in different types of counties for different types of crime, and whether the tradeoffs between economic sanctions and incarceration differ in urban and rural counties.

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