by Fred E. Foldvary, Senior Editor

The City of Berkeley, California, is about to give an Australian company an incentive to maximize traffic citations. The red-light camera system will pay the manufacturer $48 out of every fine extracted from motorists. The city will get $161 per ticket.

The National Motorist Association, a membership organization that represents the rights and interests of car owners and drivers, has taken a position against the use of camera-based law enforcement in general. Properly posted signs, enforcement by the police, and fines are sufficient for safety. Studies have concluded that red-light camera enforcement is ineffective.

Camera-based fines are that much worse when the city government and a private company profits from traffic citations. Profiteering from traffic tickets creates perverse incentives. A major premise in economics is that firms seek to maximize profits. Profit-seeking creates an efficient market economy, since this minimizes costs and avoids waste. But a market economy consists of voluntary economic acts. When people are forced to pay, then the gains are not profit, but loot extracted from victims of theft.

I don't blame the company for seeking to get loot by force. It is playing by the rules. The city is at fault for creating incentives for force and fraud. If the purpose of traffic fines is public safety, the law enforcers should not get the fine revenue. The ticket money should go to the state government, not the firm or the city. If the city gets some of the money, its incentive is to cheat.

Many of the vendors of cameras for law enforcement are switching to a flat fee to reduce the problem of corruption. This incentive problem has in fact been recognized by the California state legislature and a state audit of red-light cameras. A new state law prohibits future city contracts which give red-light camera manufacturers a portion of the ticket fines. Berkeley council members voted for the camera-enforcement just before this state law came into effect. The legislature should have simply banned this practice entirely.

So now the company has an incentive to rig the cameras so that the greatest possible number of cars are cited. Photo-enforcement is about revenue, not safety. It might seem like the cameras would catch the red-light runners, but in fact this is not the case. San Diego, California, suspended its camera-based enforcement after a judge voided 300 traffic tickets because of faulty cameras. Sacramento, California, suspended its photo-enforcement because the system did not function properly. The Sacramento Superior Court voided the red-light violations.

The City of Berkeley will face the same problems. Outraged car owners will sue the city for improper citations. Berkeley will have to pay millions of dollars in legal costs. And then the tickets will be voided. But greedy city council members don't want to learn from history.

Berkeley officials say that each citation will need to be approved by a police officer. But since the city gets a cut of the fine, the incentive of the city is to maximize approvals. Police officers have an unofficial quota for traffic citations. If an officer issues too few citations, he gets transferred off of traffic enforcement. The city motto is, if in doubt, fine them, since most folks just pay the fine rather than go to the trouble of contesting a citation.

Stronger enforcement of traffic lights perversely increases rear-end collisions as drivers screech to a halt when the light turns, making the driver behind crash into the car ahead. The conclusion of a study by the North Carolina Agricultural and State University in 2004 was that red-light cameras do not reduce crashes at intersections, and they increase rear-end accidents.

Laws often have unintended consequences as they alter behavior. The incentive of car owners is to avoid traffic fines. How does one avoid a camera-based citation? By making the license plate less readable to cameras. Sprays (www.PhotoBlocker.com) are available which make license plates more reflective and less readable by photographs. In fact, state audits show that only a quarter of the license plates photographed are readable. The rest are too grainy or overexposed to be legible.