Economic Impact of Undocumented in Texas

Yesterday, Jennifer Chacon posted a piece on the effect of undocumented on the economy in Texas. Below is link to a story on the report.

Apparently, undocumented immigrants produced $1.58 billion in state fees and taxes in 2005, but local governments bore the burden of $1.44 billion in uncompensated health care costs and local law enforcement costs not paid for by the state, according to a state report.

Undocumented immigrants paid $513 million in local taxes in fiscal year 2005, according to the report, released Thursday by Texas Comptroller Carole Keeton Strayhorn. When combined with the $1.58 billion in state fees and taxes, the overall revenue that illegal immigrants produced exceeded the $1.16 billion in state services, such as education, they received, Strayhorn said.

But local governments see a negative impact on costs, the report stated.

“While state revenues exceed state expenditures for undocumented immigrants by more than an estimated $420 million, local governments experience the opposite, with the estimated difference being more than $920 million for 2005,” Strayhorn said. Click here.

Invariably, the problems with any reports of this nature are that they fail to calculate the positive effect of spending by undocumented immigrants, such as in job creation and other economic activity. Furthermore, the fact that most tax dollars paid by immigrants–documented and undocumented–goes to federal coffers apparently is ignored in this particular report.

I’ve always thought that the most helpful book on this topic is Julian Simon’s “The Economic Consequences of Immigration.”

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