Police misconduct settlements cost taxpayers billions of dollars, with New York City paying more than $117 million in 2025, Chicago topping $300 million the same year, and the 20 largest departments spending over $2 billion between 2015 and 2019 alone.1NAACP Legal Defense Fund, Thurgood Marshall Institute The money comes almost entirely from municipal general funds, not police budgets, and the trend is accelerating rather than slowing.
What the Biggest Cities Paid in 2025
New York City resolved 1,044 lawsuits alleging NYPD misconduct in 2025 for a total above $117 million, according to a Legal Aid Society analysis. The year before, the city paid $206 million. Since 2019, New York has spent more than $796 million on such claims, and Legal Aid noted the actual totals are likely “substantially higher” because the figures don’t account for matters settled through the Comptroller’s office before formal lawsuits are filed.
Chicago’s numbers are larger still. In 2025, the city paid $204.6 million just to resolve 22 wrongful conviction lawsuits. Total misconduct payouts that year exceeded $300 million, nearly four times the $82.5 million the city had budgeted. By mid-2026, Chicago had already spent at least $225 million more resolving additional claims.
What Drives the Largest Payouts
Wrongful convictions account for a disproportionate share of settlement dollars. In New York, reversed conviction cases represented less than 1% of resolved claims in fiscal year 2023 but more than 30% of the total payout. Over the eight fiscal years ending in 2023, 77 reversed conviction claims cost the city $475.8 million.
Roughly $42 million of New York’s 2025 total went to people whose convictions had been reversed. The two largest individual payouts went to Eric Smokes ($13 million) and David Warren ($11.1 million), who were wrongfully convicted for the 1987 killing of a French tourist near Times Square. Smokes served 24 years and Warren served 20. The Manhattan District Attorney’s Post-Conviction Justice Unit moved to vacate both convictions after finding that teenage witnesses had been coerced by police. Steven Lopez, arrested alongside the Central Park Five in 1989, received $3.9 million. Another $5.2 million went to nine people framed between 2014 and 2016 by two officers later convicted of falsifying evidence.
Chicago’s single most consequential resolution was a $90 million global settlement approved by the City Council in September 2025 to resolve 176 federal lawsuits involving former CPD Sergeant Ronald Watts. Watts and his tactical team shook down residents of the Ida B. Wells Homes public housing complex and planted drugs on people who refused to cooperate. Watts and fellow officer Kallatt Mohammed were federally indicted in 2012, pleaded guilty, and served prison time. Since 2017, more than 212 convictions linked to Watts have been vacated. The $90 million settlement covered 180 people who collectively spent nearly 200 years in prison, with individual payouts ranging from $150,000 to more than $3 million. City officials called the deal “fiscally prudent,” estimating that fighting each case individually could have cost between $350 million and $500 million. Including earlier settlements and defense costs, the total Watts-related bill reached $126.8 million.
Other large Chicago cases from recent years include:
- John Fulton and Anthony Mitchell, awarded $60 million each by a federal jury in March 2025 for a wrongful conviction in a 2003 murder case. The city is appealing.
- Marcel Brown, awarded $50 million in September 2024 for a wrongful conviction in a 2008 murder.
- Da’Karia Spicer, whose family received $79.85 million in December 2024 after the 10-year-old was killed when a car fleeing police struck her family’s vehicle in September 2020. The city admitted fault.
- Robert Smith Jr., who received $15.4 million in December 2025 after serving 33 years for a 1987 double murder. Smith alleged he was tortured by detectives trained by former CPD Commander Jon Burge.
The Burge legacy continues to drive costs. Burge and his officers tortured more than 120 people, primarily Black men, between the early 1970s and 1991. Dozens of related cases remain pending, and former detective Reynaldo Guevara accounts for another 39.
Settlements Outside the Biggest Cities
The pattern extends well beyond New York and Chicago:
- A federal jury in Las Vegas awarded $34 million in December 2024 to Kirstin Blaise Lobato, who spent more than 16 years in prison after being convicted of a 2001 murder. The jury also imposed punitive damages on the individual detectives.
- Baltimore paid Gary Washington $14 million in January 2026 after he spent 30 years in prison for a 1986 murder he did not commit.
- A Meade County, Kentucky jury awarded $24.35 million in April 2026 to Jeffrey Clark, framed alongside Garr Keith Hardin for a 1992 murder. Both men spent more than 21 years in prison before their convictions were vacated in 2016.
- Los Angeles County settled Alexander Torres’s wrongful conviction suit for $14 million in July 2025.
- Bridgeport, Connecticut approved $1.78 million in settlements in June 2026, including $1.75 million to the estate of Jonathan Bell, an unarmed 41-year-old shot and killed by police after a 2024 vehicle pursuit.
Where the Money Actually Comes From
Police misconduct settlements overwhelmingly come from municipal general funds, the same pool of tax revenue that pays for schools, parks, and infrastructure. Police department budgets are rarely affected directly, which critics say insulates departments from the financial consequences of misconduct.
When settlements exceed what cities budget, the gap gets filled with borrowing. Chicago’s 2026 budget authorized $283.3 million in borrowing to cover its settlement deficit, part of a larger $1.8 billion debt authorization package the City Council passed in December 2025. The Civic Federation, a nonpartisan fiscal watchdog, warned the borrowing relies on unsustainable practices and could trigger credit rating downgrades.
Some cities issue what researchers have called “police brutality bonds,” municipal bonds whose proceeds cover settlement payouts. Los Angeles issued $71.4 million in such bonds in 2009 and 2010 to cover settlements including $20.5 million for the Rampart police corruption scandal. Taxpayers are projected to pay over $18 million in interest before those bonds are retired. Because interest on municipal bonds is federally tax-exempt, wealthy investors who purchase them effectively receive a subsidy underwritten by the same taxpayers who funded the misconduct payouts in the first place.
Smaller jurisdictions sometimes face starker consequences. Insurance providers have forced departments to address systemic problems as a condition of continued coverage, and the Maywood, California, police department closed entirely in 2010 after losing its coverage due to high settlement costs.
Defense costs compound the problem. Chicago spent $25 million on private defense attorneys for the Watts-related cases between 2016 and 2024, on top of the $126.8 million in settlements. The city spent $2.4 million defending a single Burge-related case before it even reached trial. In many instances, legal bills to fight these claims approach or exceed what it would have cost to settle them years earlier.
Reform Proposals Aimed at the Cost
A recurring theme in reform discussions is that police departments should bear some direct financial responsibility for payouts. New York City Comptroller Mark Levine’s September 2025 report recommended requiring the NYPD to absorb a portion of its settlement costs from its own operating budget, modeled on how the city’s public hospital system handles its liability. If a department feels the budget pinch from misconduct, the theory goes, it has a stronger incentive to prevent it.
The Comptroller’s report also called for precinct-level analysis of complaints and settlements, noting that excessive force complaints to the Civilian Complaint Review Board surged 49% between 2022 and 2023, reaching their highest levels since 2013. The NYPD’s Inspector General had recommended similar department-wide analyses in 2018, but the NYPD formally rejected those recommendations, according to the OIG’s 2025 annual report.
At the state level, the New York Attorney General’s Law Enforcement Misconduct Investigative Office recommended in its 2025 annual report that agencies be required to publicly disclose settlement spending, along with broader reforms including banning bias-based profiling, mandating data collection on stops and use-of-force incidents, expanding civilian oversight of police disciplinary hearings, and funding non-police crisis response programs.
Other proposals go further. Legal scholars and advocacy groups have pushed for abolishing qualified immunity, the doctrine that shields individual officers from most civil liability. Some have proposed requiring officers to carry their own professional liability insurance, creating market pressure where high-risk officers could become uninsurable. Minneapolis has explored a combined model where the department carries insurance and individual officers cover any premium increases their conduct triggers.
The Cumulative Picture
The totals keep climbing. The NAACP Legal Defense Fund’s Thurgood Marshall Institute has documented more than $3.9 billion in publicly reported settlements, with 403 of those settlements resulting in some form of policy change by the involved law enforcement agency.
New York City’s Comptroller reported that in fiscal year 2024, the city resolved 13,397 claims and paid out $1.94 billion in total settlements, the highest single-year total on record. NYPD-related claims alone accounted for $266.7 million in fiscal year 2023. Chicago taxpayers spent $200 million on wrongful conviction cases between January 2019 and June 2024, then $204.6 million more in 2025 alone. The city still faces at least 193 pending cases naming Ronald Watts and dozens more tied to Burge and Guevara, meaning the bills already paid are a floor rather than a ceiling.