NCPA - National Center for Policy Analysis


December 8, 2006

Illegal immigration is draining hundreds of millions from local governments but bolstering the Texas economy by $17.7 billion a year, the state comptroller estimates in a new report.

And when it comes to taxes, illegal immigrants are a boon:

  • They cost the state $1.16 billion in services, such as public health services and education, but they pay $1.58 billion every year in taxes and fees, according to the report, released Thursday.
  • That's a net profit to the state of $420 million.

But counties pay the price:

  • They're taking in $513 million in local taxes and revenues -- but spending $1.44 billion in indigent care and law-enforcement costs.
  • Cities and school districts suffer as well, the report said.

While the debate on the impact of illegal immigrants has roiled the state and nation, the study represents the first time Texas has comprehensively looked at the costs and financial benefits.  An estimated 1.4 million illegal immigrants live in Texas.

Advocates for immigrants and business groups said the report shows that critics' claims about damage to the economy have been overblown and false.

The report says the absence of the illegal immigrants would decrease the gross state product by $17.7 billion a year.

Those opposed to illegal immigration said that even if the costs aren't an issue, border security has become a paramount concern.

Source: Karen Brooks, "The give-and-take of illegal immigration; Study: Their taxes lift state, but services drain counties," Dallas Morning News, December 7, 2006; based upon: Carole Keeton Strayhorn, "Undocumented Immigrants in Texas: A Financial Analysis of the Impact to the State Budget and Economy," Texas Comptroller of Public Accounts, December 2006.

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