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Illegal Immigration and local government finance
The CBO has a good review of the literature on the costs of illegal immigration for state and local governments. Key grafs:
Over the past two decades, most efforts to estimate the fiscal impact of immigration in the United States have concluded that, in aggregate and over the long term, tax revenues of all types generated by immigrants—both legal and unauthorized—exceed the cost of the services they use....However, many estimates also show that the cost of providing public services to unauthorized immigrants at the state and local levels exceeds what that population pays in state and local taxes.
...The amount that state and local governments spend on services for unauthorized immigrants represents a small percentage of the total amount spent by those governments to provide such services to residents in their jurisdictions.
For example,... the Oklahoma Health Care Authority estimated ...that, since fiscal year 2003 (the first fiscal year considered), the services provided to unauthorized immigrants have accounted for less than 1 percent of the total individuals served and cost less than 1 percent of the total dollars spent for Medicaid services.
If you look, you can find some places where the costs are significant, in San Diego for example 9 percent of the law enforcement budget was associated with illegal immigration.
Posted by Alex Tabarrok on December 17, 2007 at 07:10 AM in Economics | Permalink
Comments
I suppose that another question is revenue, in addition to raw costs. I suspect that illegal immigrants generally pay sales taxes at a similar rate to most people, and even local property tax as well, whether indirectly when renting or directly (since there is little US squatting). Income taxes may be a different story, though I really can't say for sure. (My understanding is that payroll taxes tend to be paid as well, as the IRS finds it easier to impose sanctions on employers.)
If so, that's a double strike against California, where so much of the state's income is from state income tax on its wealthy, and something in favor of, e.g., Texas and Florida.
Posted by: John Thacker at Dec 17, 2007 10:07:53 AM
A true accounting of the cost of illegal immigration would also include the cost of the care and services provided to the legal children of illegal immigrants. Those costs are a direct result of illegal immigration and they are significant.
Posted by: Alex at Dec 17, 2007 11:08:40 AM
Oklahoma doesn't spend much, eh? That's good news. The article estimates the costs to California in the "tens of billions." Considering that the California state budget is $145 billions, that would mean aliens take up in the area of 10% of the state budget, more than the current budget deficit. That's not just "some places," that's the entire state. The report also cites an estimate that 25% of illegal aliens in California pay no taxes at the workplace.
Posted by: bjk at Dec 17, 2007 11:13:34 AM
Perhaps this explains why many local governments are keen to step up immigration enforcement, but the federal government, while keen to be seen as doing something, is less keen to take actions that might really result in significantly fewer illegal immigrants.
Posted by: David Wright at Dec 17, 2007 11:33:07 AM
But the costs continue as more people compete for jobs, health services, education,etc., from generation to generation. How many kids do the illegals have?
Posted by: jorod at Dec 17, 2007 11:47:26 AM
When doing this math, does anybody figure out the potential costs of lower productivity and higher prices that would exist without all that cheap labor entering the economy?
Posted by: Bartman at Dec 17, 2007 12:19:43 PM
Calculating what illegal migration has caused to the nation is a huge job . I think no government will try to burn its leg into this. Its a hot issue and no one wants to solve it
Posted by: loan calculator at Dec 17, 2007 12:36:08 PM
Alex asks the right question. Illegal immigrants themselves are (as a group) hardworking and law-abiding, and they contribute more than they cost. But their children and grand children (as a group) consume more services, are less less law-abiding, and are more prone to social dysfunctions (such as single parenthood). Does this get factored in?
Posted by: ed at Dec 17, 2007 3:32:21 PM
Looking at the report, it appears to exclude the costs of legal children of illegal immigrants.
Thus, it seems it is worse than useless for calculating the total budgetary costs of illegal immigration.
Posted by: ed at Dec 17, 2007 3:37:00 PM
How about the Los Angeles Unified School District's $24 billion school construction program?
Posted by: Steve Sailer at Dec 17, 2007 4:05:22 PM
How about the Los Angeles Unified School District's $24 billion school construction program?
Posted by: Steve Sailer at Dec 17, 2007 4:06:35 PM
Is it significant that the author is not a Ph.D.(as per the CBO blog: http://cboblog.cbo.gov/)?
Is it a signal that it's not to be taken too seriously?
Posted by: Kap Kool at Dec 17, 2007 6:36:18 PM
The real question is what would be the results of a policy comparison. It's all well and good to say that in the present state, illegal immigration costs or benefits government coffers to a certain amount versus some universe where it doesn't exist at all, but what significance does that have?
Posted by: Petrarca at Dec 17, 2007 11:29:56 PM
I still wonder how we would benefit from kicking out 4% of the nation's school children
Posted by: Robert Olson at Dec 17, 2007 11:38:19 PM
Dr. Kap Kool,
You bet it is significant! The report must be totally wrong.
So, illegal immigrants cost the feds lots of money, but not
the state or local governments. Of course. Thanks for pointing
out to us this very important point!
Posted by: Barkley Rosser at Dec 17, 2007 11:57:18 PM
"most efforts to estimate the fiscal impact of immigration in the United States have concluded that, in aggregate and over the long term, tax revenues of all types generated by immigrants—both legal and unauthorized—exceed the cost of the services they use"
So generous of those immigrants. Over long term (50 years? 100 years?) they pay more in taxes than services they use.
Terrific. But who should pay for defense, infrastructure, jails, CIA, farm subsidies, foreign aid?
Is it a job for a native citizen exclusively?
Immigrants get no value and should not pay for DoD?
What kind of study is this?
Posted by: mik at Dec 18, 2007 1:17:23 AM
How much of the expense of illegal immigrants is caused not by their immigration, but by our making it illegal?
How much of their tax evasion is caused not by their desire to shirk, and how much by their desire not to be caught?
In other words, how much of a problem is caused by illegal immigration versus the illegality of that immigration?
Posted by: Russell Nelson at Dec 18, 2007 1:48:49 AM
"it appears to exclude the costs of legal children of illegal immigrants."
Why stop there?!? Why not factor in the costs of the legal great-great-great grand children of the illegal immigrants? I'm sure some of them will turn out to be bad apples! And don't forget. Some of those great-great-great grand children will have cousins and nephews so we must include the costs of those great-great-great grand cousins and great-great-great grand nephews as well. Let's see. What else can we count? What other straws can we grasp at? What other ways can we find to make sure that the 'cost' column looks impressive enough? I know! Illegal immigrants' pets!!! Or more better yet, since we know that first generation illegal immigrants' pets are generally well behaved, and it's only the second generation illegal immigrant's pets (as well as the 5th, 6th, 9th and 13th generation, not to mention their pet cousins and nephews) which are bad doggies and bad kitties we must count those...
Folks are really starting to grasp at straws here.
Posted by: notsneaky at Dec 18, 2007 3:35:15 AM
The key question is who benefits and who pays for it. A bad recession will highlight this.
Posted by: Huggy at Dec 19, 2007 4:01:36 PM
To notsneaky,
Who’s grasping at straws? The only straw I see here is the Straw-man argument (if you don’t know what that means, google it) you’re making. Nobody on this board has made such ludicrous suggestions.
To include the cost of ONLY their minor children (NOT the grandchildren, third cousins or even adult citizen children of undocumented) is not only reasonable, but necessary for any honest discussion on the true cost of illegal immigration.
For one, the very presence of their children is a DIRECT result of the parent’s decision to come to our country. Any health and education costs are costs that WOULD NOT have occurred if their parents didn’t come here. That can’t (and shouldn’t) be said for more extended family members.
And second, while the children are still minors, it is the illegal immigrant parents who are the HEADS of their households. Who else would be accountable for the costs incurred by those children? If we’re going to count the tax money coming FROM that household, then why shouldn’t we count the tax money going in to that SAME household?
And bottom line, it shows a huge lack of integrity as a debater to simply ignore those costs just because of some legal technicality. If you want to mention their children’s legal status as a footnote to the argument, fair enough, but nevertheless, those costs should be mentioned. Intelligent people can then decide what it means to them.
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