The Bottom Line on Illegal Imigration is Red
By Randy Alcorn
Among the many controversies involved with the issue of illegal immigration is the debate over whether it is an economic benefit or drain on public finances. The specific question is; do illegal immigrants provide more tax revenues to public treasuries than they receive from them? As with all illegal activities, the covert nature of illegal immigration makes it impossible to measure its impact with absolute accuracy.
Nevertheless, at the request of the U.S. Senate Finance Committee, which sought an answer to the cost/revenue question of illegal immigration, the Congressional Budget Office (CBO) reviewed pertinent federal data and 29 reports generated by various state and local governments that had examined the financial impact of illegal immigration on their jurisdictions. In December 2007, the CBO reported the results of its research, concluding that for most state and local governments, tax expenditures for illegal immigrants exceeded tax revenues from them.
Because federal law requires that state and local governments provide education, health care, and law enforcement services to all residents in their jurisdictions, regardless of the residents’ legal status, state and local governments shoulder virtually all the financial burden of illegal immigration. There is some token federal funding, for example education, local governments’ single largest expense, can receive up to 10% in federal funding.
The CBO report confirmed many of the realities of illegal immigration, realities that have become all too familiar to the local governments that have had to endure them. Among these are that illegal immigrants rarely have health insurance and, therefore, rely heavily on emergency health facilities and public hospitals for non-emergency illnesses and other health related problems. The cost of educating the children of immigrants who are not fluent in English increases the cost per student by as much as 40%. For many jurisdictions along the Mexican border the cost of law enforcement activities involving illegal immigrants runs into tens of millions of dollars per year and is a significant diversion of budgeted funds. Because the average household income for illegal immigrants is as much as 74% less than that of legal residents, immigrants pay significantly less in income taxes and sales taxes. Furthermore, 25% to 50% of illegal immigrants pay no federal, state or local income taxes at all, and only about 50% of them pay Social Security taxes.
Given these realities it is no surprise that the cost of illegal immigration to taxpayers will exceed the tax revenues illegal immigration generates. Nowhere are these realities more apparent than in those states suffering the largest influx of illegal immigrants; Texas, New Mexico, Arizona, and especially California.
Researchers at the Pew Hispanic Center estimate that California has absorbed 25% of the nation’s illegal immigrants (estimated to be between 20-38 million). California, therefore, provides an empirical case study of illegal immigration’s effects on public finances. The recurring state budget deficits that California has incurred over the past decade, and with which it is currently struggling, is significantly attributable to the large number of illegal immigrants who reside there.
As with all states, education is California’s single largest public expenditure and commands 42% of that state’s $150 billion budget. The State of California’s Legislative Analyst’s Office reports that of the state’s 6.4 million K through 12 public school students, one out of four is not fluent in English. Of that number, 85% are Spanish speaking. Additionally, one out of nine of these students require special education programs.
These children of Spanish speaking foreign immigrants increase California’s K-12 enrollment by 21.3%, nearly 1.4 million students. At $11,584 each, which is the state’s 2007-2008 budgeted allocation per student, the cost of educating these students is $15.8 billion. Add in the $1.3 billion for special programs to accommodate non-English speaking students, and the cost increases to $17.1 billion. The state’s current budget deficit is projected to be $16 billion.
The other significant public costs directly attributable to illegal immigration are law enforcement, health, and welfare services. In 1999, San Diego County alone spent $50 million dollars on law enforcement involving illegal immigrants. That was 9% of its total law enforcement budget. In Santa Barbara County nearly 18% of births in 2006 were to illegal immigrants and cost that county’s taxpayers $4 million dollars. Up to 20% of the inmates in Santa Barbara County jails are illegal immigrants. The county will soon be building a larger jail at a cost of over $100 million.
Such examples of public expenditures attributable to illegal immigration are found in most of California’s counties and municipalities. And, because illegal immigrants have extended their range to other parts of the country, jurisdictions across the nation will be incurring these tax expenditures as well.
Given the findings of the CBO, it is highly improbable that in California the magnitude of public expenditures attributable to illegal immigrants is being offset by tax revenues derived from them. This will, no doubt, be the case for state and local governments throughout the nation.