That's the ticket! Lessons learned from Chicago's parking ticket amnesty program.

• Author: Darst, Matt

Although indicators such as the gross domestic product and the unemployment rate appear to be signaling an improving economic picture, state and local governments continue to struggle in the wake of an economic downturn. Municipal tax revenues based on travel and sales have not fully rebounded since the tragic events of September 11, 2001. Ever since, cities have been cutting spending and looking for ways to either stimulate existing revenue streams or develop new ones, proving that necessity is indeed the mother of invention.

The most recent economic downturn spared few, if any, governments. In Chicago, city officials quickly recognized the need to generate revenues from nontraditional sources to soften the blow from languishing sales and tourism taxes. Faced with considerable budgetary constraints, the city began searching for new and unique revenue streams to stem the ebbing tide. One of the most productive alternative revenue sources was a parking ticket amnesty program that became the cornerstone of the mayor's plan to address a growing budget deficit.

Between September 3 and October 15, 2002, the City of Chicago waived the penalties on parking tickets issued prior to January 1, 2000. By paying only the face value of these tickets, motorists saved as much as 50 percent on their outstanding balances for parking tickets. Meanwhile, widespread participation in the amnesty program generated almost $9 million in new revenues for the city and significantly reduced receivables.

While Chicago and other governments have achieved remarkable results from amnesty programs, success is by no means guaranteed. This article chronicles how the City of Chicago planned and executed its parking ticket amnesty program, in the hope that governments considering similar programs will benefit from our experience and achieve success in their own right.

DOING OUR HOMEWORK

Chicago's 2002 amnesty program was its first such program since 1987. The 1987 program was a questionable success. The city learned a number of lessons from that experience, and these lessons were carefully considered as planning for the 2002 amnesty moved forward. Chicago also researched the programs of other municipalities, taking cues from their various successes and failures.

Cities have experimented with a variety of different methods for providing breaks to motorists who are delinquent in paying their parking tickets. The simplest involve waiving late fees or reducing the fine to its original value, while the most complex involve calculations based on percentages of outstanding debt and the age of the ticket. The City of Chicago ultimately combined elements of both strategies in its parking break amnesty program.

Amnesty programs are often defined in terms of collection rates. Surprisingly, city officials learned that most amnesty programs in U.S. cities have collected between just 2 and 3 percent of outstanding debt. The most successful programs--those approaching collection rates of 5 percent--were administered by cities that rarely relied on amnesty programs for revenue generation.

Chicago's program proved successful because the public had no expectation of an amnesty. The 2002 program was necessitated by a poor economy, and...