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National Data | Illegal Immigration Pays—For Them, Not Us
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January 23, 2007, 04:00 AM
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Illegals pay more in taxes than they receive in benefits.

(Oh really?)

Well, at least that`s the conclusion of a report issued by outgoing Texas state comptroller Carole Strayhorn. [Undocumented Immigrants in Texas, Special Report, Texas Comptroller, December 2006. PDF]

Trumpeted as "…the first time any state has done a comprehensive financial analysis of the impact of undocumented immigrants on a state`s budget and economy…", Ms. Strayhorn`s report claims that illegals pay $1.58 billion in state taxes while receiving $1.16 billion in state services.

This implies a $420 million net transfer from illegal immigrants to the state of Texas.

Not surprisingly, this happy result is achieved by ignoring several large fiscal negatives:

  • K-12 education—headcount. The Texas study estimates there are "about 135,000 undocumented children in Texas public schools, or about 3 percent of total public school enrollment."

Not only is this figure low (a FAIR study puts  enrollment of undocumented children in Texas at 225,000), it excludes U.S.-born children of illegals, who are estimated to be about twice as numerous as their foreign-born children. FAIR estimates the combined (U.S.- and foreign-born) undocumented K-12 enrollment to be 530,000—or 395,000 more than the figure used by Ms. Strayhorn. Instead of a mere 3 percent, children of illegal aliens account for about 12 percent of total public school enrollment in Texas. (Ironically, Plyler vs. Doe, the Supreme Court decision that made free K-12 education a civil right for illegals, was a Texas case.)

If, say, one-quarter of the children of immigrants are in ESL, and ESL costs are 25 percent above the per-pupil average, the average cost of educating an illegal alien`s child in Texas would be $7,528—or $443 more than the statewide average.

Our conclusion: Comptroller Strayhorn underestimates the cost of educating children of illegal immigrants by about $3.1 billion. This amount reflects her low-balling the costs of educating foreign-born students ($443 times 135,000) plus her much larger gaffe of ignoring the costs of educating U.S.-born children of illegals ($7,528 times 395,000).

Bottom line: After accounting for all K-12 expenses, the $420 million subsidy allegedly paid by illegal aliens to the state of Texas becomes a $2.7 billion subsidy from Texas taxpayers to the illegals.

And we haven`t even discussed Medicaid.

Texas is not the first state to low-ball immigration costs. In his analysis of the fiscal impact of immigration in Florida released in 2005, David Denslow—an economist at the University of Florida`s Bureau of Economic and Business Research— critiques an earlier study on the subject:

"The short run effects of immigration on Florida`s public finances have been addressed in a thorough study by Thomas Boswell and others. Published in 2001, the Boswell Report quantifies the contribution of immigrants to taxes and their use of welfare and public education. With respect to revenue, the report concludes `There is no question that immigrants are carrying their fair share of the tax burdens in Florida and Miami.` It also finds that per capita spending on public services is about the same for immigrants as for natives."

By contrast, Denslow estimates that immigrant households receive $1,800 more in state services (mainly education and Medicaid) than they pay in taxes. He explains the discrepancy between his results and those of the earlier study:

"Because the Boswell Report is professional and methodical, we wish we could use its results off the rack, with minor updating, for the short-run section of this chapter. But the authors choose the individual immigrant, not the household, as their unit of analysis. They are well aware that most studies focus on households because `the household is a functioning socioeconomic unit.` But they use the individual instead, saying `the basic problem with using households is that they tend to overestimate the costs of providing social services to immigrants because many immigrant households include native U.S. born children.`"

"By the Boswell Report`s definition, immigrants were 16% of Florida`s population in the 1996–99 data but only 7% of its K–12 students. In view of the high fertility and relative youth of immigrant families, counting children in immigrant households raises the K–12 share above the household share. Using data for the years 2000 through 2004, we find that the immigrant share of households in Florida is 20% and the immigrant share of children is 26%. Since K–12 education takes the largest share of state-and-local spending, the difference matters."

In Florida, as in Texas, immigrants pay their "fair share" only when their U.S.-born children are left out of the calculation.

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.