That falls under the "excessive" fine classification which is prohibited by the eighth amendment. Late fees and penalties imposed by state and local governments must be "reasonable" and proportionate to the actual damages or administrative costs incurred due to the late payment. A $200 fee for a $5 debt is vastly disproportionate (4000% of the original amount) and would likely be challenged successfully in court. Challenging it in court however, would cost you tens of thousands of dollars out of pocket, which is how they continue to get away with it. Anyone challenging it would likely be driven to bankruptcy, since the government pretty much has unlimited resources to fight with.
The U.S. Supreme Court has ruled that the Eighth Amendment's protection against excessive fines applies to state and local governments. This means that fines cannot be grossly disproportional to the seriousness of the offense or the amount owed.
The situation you described is likely punitive rather than compensatory, which is a violation.