One of the most troubling recent scenes from Sacramento came as the California state legislature reached the end of its session. A simple bill that would rein in abuses of the civil-asset forfeiture process—i.e., when police agencies take property from people, even if they've never been accused of a crime—came far short of passage after the law-enforcement lobby pulled out all the stops. The final vote was about money, not justice.

Police organizations argued they would lose a significant amount of funding if a law passed requiring that they secure a conviction before taking property. They often take homes, cars and cash from people after claiming the property was used in the commission of a crime. They need only prove the low standard of "probable cause." (For instance, one Anaheim couple almost lost a $1.5 million commercial building after an undercover cop bought $37 in marijuana from a tenant, but the feds dropped that case after bad publicity.)

Created in the early days of the nation's war on drugs, asset forfeiture was designed to grab the proceeds from drug kingpins. But most of the money now is grabbed from ordinary citizens. According to a study last year, about 80 percent of the time, seized property is taken from people who have never been charged with anything. That same study, by the Drug Policy Alliance, found wanton abuses in California cities. Police are not supposed to budget forfeiture proceeds, but they increasingly depend on the revenues to fund their operations.

The study also found "multiple instances of cash grabs by law enforcement being incentivized over deterring drug sales, wherein police wait until a drug sale concludes and then seize the cash proceeds of the sale rather than the drugs, as drugs must be destroyed and are of no monetary value to law enforcement." It also found that some Los Angeles County cities "were found to be prioritizing asset forfeiture over general public safety concerns … ." In other words, police skew their policing strategies around these lucrative takings.

California's law actually requires, in property seizures of more than $25,000, that the police agency gain a conviction and the legal standard requires proof beyond a reasonable doubt. California law-enforcement agencies don't like that higher standard, so they circumvent the state law. They participate in something called "equitable sharing"—i.e., they invite the feds into their operation, take the property using the lower federal standard, and then split the loot.

A new national study by the Institute for Justice, a Virginia-based civil-liberties group, gave California a "C+" in its civil-forfeiture laws. That leads to an obvious question: Given the terrible problems documented in California, how bad must things be in other states? Only seven states had better protections than California and the preponderance of states received "D" grades.

An economic consulting firm reported on data last week showing that the approximately $4.5 billion in annual forfeitures now exceeds the $3.9 billion Americans lose in robberies each year. The clear point: Your local police or sheriff's department is more likely to take your stuff than a robber. The Institute for Justice report found the problem getting worse. "It's exploding, despite the fact that the issue is getting a lot of attention," said Dick Carpenter, one of the study's authors. According to the report, forfeiture revenues have more than doubled between 2002 to 2013. California agencies collected approximately $280 million over the 11-year study period—and an additional $696 million by partnering with federal agencies.

These are big dollars to local police departments, which explains the arm-twisting and lobbying as that reform bill made it to the Assembly floor. Critics of asset forfeiture agree that agencies will lose money, but argue that the government is supposed to promote justice. Their agencies should be funded through general tax proceeds, not by grabbing the homes and cars of people who may not have done anything wrong.

The problem is the incentive. The agencies that do the taking get to keep lots of the money. How can we expect just results when agencies have such a strong financial incentive to take more and more property? In New Mexico, a video of a city attorney bragging that "this is a gold mine" helped build public support for wider-ranging reforms there. As a result, the Land of Enchantment received the highest grade on the Institute for Justice study.

Last year in California, SB 443 would have, among other things, prohibited "state or local law enforcement agencies from transferring seized property to a federal agency seeking adoption by the federal agency of the seized property." Expect something like it to return next year. As abuses mount, maybe legislators will be more likely to think about justice and not just money.