California’s Budget Problems Exacerbated by Illegal Immigration

Published on November 10th, 2008

Costs of Illegal Immigration to State Match Amount of the Budget Deficit

SANTA BARBARA – While Governor Arnold Schwarzenegger has called for increases in the sales tax and cuts in services to reduce the budget deficit of $11.2 billion, a population group has noted that the shortfall is about the same as the costs of illegal immigration to the state.

Californians for Population Stabilization (CAPS) says that a 2004 study indicated that California’s illegal alien population imposed a net cost of $9 billion per year on the state’s taxpayers just for education, medical care and incarceration. “After adjusting the figure for current costs and increases in the number of illegal aliens, it would exceed the state’s projected deficit,” according to Diana Hull, the organization’s President, “and this is a very conservative estimate.”

Other states are taking steps to reduce illegal immigration and the burdens it imposes. Arizona, for instance, passed legislation requiring that employers use the E-verify system to check the work eligibility of employees. “Unfortunately, California is going the other direction, and taxpayers get stuck with the bill,” said Hull.

The costs of illegal immigration to California are likely much higher. A 2007 study by Philip J. Romero, formerly a research economist at RAND, top economic adviser to Governor Pete Wilson and later Dean of the University of Oregon School of Business, estimated that illegal aliens in California receive somewhere between $10 and $38 billion more in state services than they pay in state taxes.

Schwarzenegger has responded to the budget crisis by ordering a special session of the state legislature to increase the sales tax by 1.5 percent, increase other taxes, and cut funds for education.

“California needs a special session of the legislature to deal with the problem of illegal immigration, beginning right now. If we don’t stop illegal immigration, the costs will continue to escalate, deficits will continue to get larger and the tax burden will finally become unbearable, causing residents and businesses to relocate,” Hull said.


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