The Cost of Mandated Services to the Undocumented

July 2006
The Bell Policy Center released two reports (pdf) on illegal immigration yesterday. One addresses the amount of state and local taxes paid by undocumented residents and the other calculates the amounts state and local governments pay out to the undocumented in federally mandated services.
New findings from the Bell Policy Center show that undocumented immigrants in Colorado pay $159 million to $194 million in state and local taxes, an amount equal to 70 to 86 percent of their K-12 education, emergency health care and incarceration costs. ....Bell's calculations show the estimated 225,000 to 275,000 undocumented immigrants now living in Colorado cost state and local governments nearly $225 million a year for services that are mandated by federal law.
This is pretty close to the figure arrived at by the Colorado Legislative Council whicyh conducted a recent study and estimated that the amount of federally mandated services paid to the undocumented is $217 million. So why does the anti-immigrants' rights group, Defend Colorado Now, led by former Governor Dick Lamm, claim that the amount state and local governments pay to the undocumented approximates $1 billion? The Bell Study is important because it raises two points too often overlooked in the immigration debate:
"We also need to consider the other side of the equation and look at the amount of taxes undocumented immigrants pay. When revenues are considered, the net effect on state and local governments is far below the amounts being touted by some politicians and other advocates." "These calculations don't include the amount undocumented workers pay in federal income and payroll taxes for Social Security and Medicare -- benefits they will never collect," he said. "The real issue may be that the federal government should do a better job reimbursing the states for these costs."
The Bell Policy report on the amount of taxes paid by the undocumented is here (pdf). Its study on the cost of services paid to the undocumented is here (pdf). The federal mandated services included in the study are:
  • K-12 education -- $175.6 million
  • Emergency medical care -- $31.3 million
  • Incarceration -- $18 million
  • Total -- $224.9 million
The state and local taxes paid by the undocumented included in the Bell report are: Sales tax, property tax and state income tax. Amounts they pay into social security and medicare are not included. It also does not include other taxes paid by those working "on the books," estimated by the Social Security Administration to be 50% of the undocumented, through payroll deductions for unemployment insurance, even though under state law the undocumented cannot collect benefits from under the program. In other words, although the undocumented pay in, they get nothing out. Blogger Pacified at Square State has more on this. Read the comments there too, especially the one by OhWilleke who points out:
The Bell report also neglects to mention state gas taxes paid for by illegal immigrants and everyone else alike. This, along with federal gas taxes, pays for roads in Colorado....Even taking the Bell Center figure at face value, we are talking about a fiscal burden created by illegal immigration on all governments combined in Colorado on the order of $100 per illegal immigrant. This is not a crisis.
For more on why there is no immigration crisis, check out Robert Scheer at Truthdig.