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Governments should not operate fiscally like corporations. A financial institution will budget around fees because it's in their benefit for their customers to incur fees. A government should not budget around fines because they want the behavior which was fined to not occur at all.

I think one way to prevent bad incentives is to ensure that the organizational units that create and enforce policies are not the ones that benefit from any fines collected.

On the surface this sounds great, but governmental organizational units are still able to pressure one another, or have third parties apply pressure.

Maybe a uniform tax credit/refund for each citizen that is covered by that level of government. We the citizens can then decide if we fix the issue or continue to generate fines, but at least the budget isn't expecting revenue that could disappear (like the lack of traffic tickets during the beginning of COVID).

How about fines go into a sovereign wealth fund (but not be seen as major source for the fund- more a bonus) so there is no short term budget planning based on fine revenue.