All the other corruption and such aside, imagine how terrible this is for the urban development of your town.
The municipal government has no incentive to invest in forward-thinking policy that will lead to healthier and more economically sustainable communities. If they invest in any kind of maintenance or developments that increase road safety - and thus decrease fines - it hurts the government's ability to operate. Indeed, they have direct Financial incentive to make the roads less safe. Not to even mention that they have no incentive at all to do things that improved the city in ways that won't affect their traffic fines.
They've committed to giving up on good governance of their small town. They found a way to function by just parasitizing others. They've given up.