Report: Change how Michigan courts are funded, standardize fines and fees

Michigan Judicial Council rolls out proposal to change process for funding Michigan’s $1.2 billion trial court system
Sweeping proposals aim to remove potential conflicts of interest with statewide standards for court costs, centralized fee collection
Recommendations now head to state lawmakers for further review

Michigan trial court funding and fee collections would be shifted from locals to the state and courts would be subject to statewide standards for imposing fines and fees on defendants under sweeping new policy recommendations released Thursday from the Michigan Judicial Council.

The state’s trial courts, which cost an estimated $1.2 billion to run annually, are primarily funded by local units of government and revenue generated from court cases.

The council’s latest report — based on input from dozens of judges, court administrators, local governments, attorneys and law enforcement agencies — found that the reliance on local funding puts undue pressure on judges to generate revenue for daily operations and could result in unequal outcomes around the state.

Among the proposed changes: a statewide formula for determining court costs, including a standardized process for determining a defendant’s ability to pay, and a new Trial Court Fund housed in the state Department of Treasury that would collect all trial court revenue and handle collections for unpaid assessments.

The recommendations will be sent to the Michigan Legislature, which would need to sign off on the plan for it to take effect.

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Officials who worked on the proposal say the shift would ease pressures on judges and go a long way toward building trust with the public.

The reliance on locals to foot most of the bill makes existing funding sources unstable and inadequate, State Court Administrator Tom Boyd said, and can result in “real or perceived conflict of interest between the judge’s duty to impartiality and the obligation to generate revenue to operate the court.”

“The broken relationship between cops and courts and the community has got to motivate us to do better,” he continued.

So what would these changes mean for Michigan, and how would it work? Here’s a closer look:

How it currently works

Michigan’s 303 trial courts currently cost about $1.2 billion annually to run, an analysis of trial court and local government revenue and expenditures by accounting firm Maner Costerisan found.

Of that, 58% of costs are currently borne by local governments, and the state contributes about 15%, said Monroe County Administrator Michael Bosanac, who helped develop the new funding proposal.

Most of the rest comes from a smattering of federal grants for specific programming and court fines and fees levied on defendants.

The report found that courts collect about half of all assessments within the first year after they are imposed, and collection rates fall to 1% or less after four years.

Court costs imposed during trial proceedings are largely determined on a case-by-case basis and can vary widely by region, though the state has made some inroads in changing that system. In 2023, lawmakers approved sweeping juvenile court reforms that included eliminating most juvenile court fees.

What’s being proposed

The council recommended ceding the bulk of fee collection and funding responsibilities to the Michigan Department of Treasury through the creation of a new Trial Court Fund.

As proposed, all court-generated revenue would be deposited into the fund and then disbursed back to local courts based on each court’s individual staffing and funding needs. State and local governments would share the costs of new court facilities and major renovations.

Instead of courts pursuing collections for delinquent payments through bench warrants or license suspensions, the Department of Treasury would handle that task. Trial courts would still be in charge of assessing and distributing restitution to victims.

“As courts, we’re just not very good at collecting money — and why should we be? That’s not our job,” said Judge Michelle Appel, of the 45th District Court in Oak Park. “Turning it over to the professionals makes so much sense.”

Matthew Clark, director of Treasury’s Collection Services Bureau, acknowledged in a statement that collecting court debt would be a “new and challenging undertaking” for the department, but he said treasury staff are “experts on collecting debt and have numerous tools to do so effectively and efficiently.”

The report doesn’t specify how much additional state funding would be needed to pull the plan off, though its authors said the goal is to ensure locals aren’t paying into the system any more than they already are and that each court has the amount of staff needed to manage caseloads.

Another suggested change: only using court-generated revenue on trial court operations, meaning funding for forensic labs, jail reimbursement, children’s advocacy, sexual assault prevention and other programs would need funding from alternative sources.

What would change for the public

Defendants and others coming into contact with the court might have an easier time deciphering what the court might charge them for various infractions — and the recommendations include a standardized formula for determining whether a defendant is capable of paying.

Under the proposed funding model, courts would be subject to statewide standards for situations where imposing fines and fees are appropriate.

Judges would retain discretion over crime-specific court fines and restitution for victims, but other costs and court fees would only be assessed if the person was found not indigent.

The recommendations “balance the need for accountability in the court — which often takes the form of fines and restitution — with the goals of rehabilitation that are undermined by imposing fees and costs that are impossible for some people to pay,” said Paul Stutesman, a judge in St. Joseph County’s 45th Circuit Court.

Why now?

The suggestions stem from a legislative request to the judicial branch in 2024 asking for alternatives to existing methods for funding local courts, though interest in change goes back to at least 2014, said Boyd, the state court administrator.

A Michigan Supreme Court ruling limiting judicial authority to impose court costs on defendants — coupled with national scrutiny of Missouri courts’ use of court assessments in the aftermath of the 2014 police killing of Michael Brown Jr. in Ferguson — shone additional light on the possibility that using court fees to boost local budgets could compromise judicial independence, Boyd said.

“Missouri’s system of financing that court in 2014 is exactly the same as Michigan’s is today,” Boyd said. “They changed after this, and we haven’t.”

Other states, including Minnesota, Texas, California and Arizona, have similarly shifted from localized court funding to a more unified system, which the report’s authors said helped inform the plan laid out for Michigan.

California, for example, initially didn’t factor in costs of maintaining buildings into its court funding reforms. That spurred Michigan officials to recommend blended local and state responsibility for building upkeep as “our effort to learn from California’s experience,” Boyd said.

What’s next

The report and its recommendations were due to the Michigan Legislature for consideration by May 2026.

Getting it done sooner to give lawmakers more time to consider emphasizes how important the issue is to judges and other involved groups, said Bosanac, the Monroe County administrator.

“It is big, it is complex, and we want to make sure that they have plenty of time in front of them” to debate the plans’ merits in Lansing, he said.

In a statement, former Michigan Supreme Court Chief Justice Bridget Mary McCormack said the roadmap laid out has been a long time coming and will be “invaluable” if the constitutionality of court costs is legally challenged in Michigan.

“But I urge the Legislature not to wait that long to consider what a fairer, more efficient funding model could look like,” she said in a statement.