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Friday, December 31, 2021

Does Texas spend more for services to undocumented immigrants than they yield in taxes?

This piece shows just how much of a stretch it is for Texas Attorney General Ken Paxton to foster an incorrect and pejorative view of undocumented immigrants crossing our Southern border. Were this not so, he would have included in his analysis the revenue generated by undocumented immigrants' through the sales taxes that they pay.

Against various credible sources of data, Paxton's distorted and politically self-interested conclusion is that undocumented immigrants cost Texans more than they generate in revenue.  Do read the entire article on the matter appearing below to derive the opposite conclusion that immigrants' contributions are net positive. As long as I myself have followed this question, the answer has never been otherwise. 

We should also always be mindful of the characteristic U.S. Census undercount of undocumented people and Hispanics, generally, that if done well, would bring much-needed federal dollars to our state, as well as stronger political representation which was a direct cost of the last U.S. Census undercount. Accordingly, read Gov. Abbott’s actions cost Texas an extra House seat, by Dudley L. Poston, Jr. & Rogelio Sáenz.

These machinations are nevertheless understandable from the perspective that scapegoating immigrants and stoking anti-Mexican and anti-Latino xenophobic fears in the Republican Party base—to which even a Trump-appointed federal judge didn't completely buy—is preferable to the truth that immigration and immigrants contribute positively to Texas' economy.

-Angela Valenzuela


Does Texas spend more for services to undocumented immigrants than they yield in taxes?

While Texas AG Ken Paxton casts unauthorized immigrants as costly “burden,” experts say they actually generate a net benefit for the state. The last official look – not updated – is 15 years old.


FILE -- Texas Attorney General Ken Paxton filed a lawsuit challenging President Barack Obama's transgender bathroom order in 2016. Now Paxton is leading a coalition of seven states suing the federal government to end the Deferred Action for Childhood Arrivals program, also known as DACA. It allows unauthorized immigrants -- Dreamers -- who came to the U.S. as children to legally stay and work here.(2016 File Photo / Austin American-Statesman)

By  | Dec 29, 2021 |Dallas Morning News


AUSTIN — As he celebrated an early-round win challenging one of just-inaugurated President Joe Biden’s dozen or more executive orders and policy changes on immigration earlier this year, Texas Attorney General Ken Paxton claimed to have made a big discovery: “Illegal aliens” are costing state taxpayers a bunch of money.

In his federal lawsuit challenging the Biden administration’s initial, 100-day halt to deportations of most noncitizens, “Attorney General Paxton uncovered hundreds of millions of dollars that Texas taxpayers involuntarily spent on illegal aliens every year,” Paxton said in a March 31 news release.

Texans are generous “but the cost of illegal immigration is an unconscionable burden on the taxpayers of our great state,” Paxton said, ticking off six categories of expenses.

Paxton’s depiction of undocumented immigrants as economic deadweights draws fierce disagreement from immigration advocates who brand his analysis artless and one-sided. In court last winter, his numbers were embraced in part – but partly rejected – by a sympathetic federal judge appointed by former President Donald Trump.

The episode highlighted how it’s been 15 years since Texas has made an official attempt to analyze how much undocumented immigrants add and subtract from state and local government finances.

In December 2006, one month after her bid as an independent candidate to unseat then-GOP Gov. Rick Perry fizzled, then-Comptroller Carole Keeton Strayhorn issued a special report, “Undocumented Immigrants in Texas: A Financial Analysis of the Impact to the State Budget and Economy.”

It estimated that deporting all 1.4 million unauthorized immigrants that were believed to live in Texas at the time would shrink gross state product by $17.7 billion or 2.1%. Strayhorn found undocumented immigrants produced for the state significantly more revenue than costs, a net positive of $425 million in fiscal 2005. Local governments, socked with incarceration and health care costs not reimbursed by the state, bore a net negative cost of $929 million in fiscal 2005, her report said.

Strayhorn, who as a Republican won two terms as comptroller and before that, one as state railroad commissioner, noted that her findings of positive fiscal effects at the state level conflicted with what at the time were fresh studies by a national anti-immigration group and a left-of-center Colorado think tank, “both of which identified costs exceeding revenue.”

Republican consultant Mark Sanders, who was Strayhorn’s top political adviser, recounted recently that the self-styled “one tough Grandma” and her aides knew the report would stir controversy.

“For a lot of Republican primary voters, it’s a black and white issue, there is no gray: ‘Illegal immigrants, especially illegal Mexicans, are bad for the country,’” Sanders said.

“That was the general feeling and Carole wanted to get out some numbers that showed a different story, a more accurate portrayal of the economic impact that this particular group of people was having on Texas,” he said. Leaders of communities near the Texas-Mexico border “were insistent that we do the report,” to underscore how a total shut-off of illegal immigration would be “devastating” for the state economy, he recalled.

“Now, it would be too hot a potato for someone to pick up and try to update,” said Sanders, noting that immigration more recently has soared in importance and become Texas Republican voters’ top issue. “It would take a tremendous amount of political courage for someone to do that in this atmosphere.”

Former Comptroller Susan Combs, who served in the tax collecting and revenue estimating post for two terms after Strayhorn, said during her tenure that changes in state and federal laws and other constraints on her office prevented the study from getting an update.

The current comptroller, Glenn Hegar, promised in 2013 that if elected he would update the 2006 study or do “a similar one.” However, Hegar hasn’t done so. Through a spokesman, he recently pointed to the press of other business, and a lack of prodding by the Legislature.

“The agency has not been formally asked to study the economic impacts of illegal immigration,” Hegar spokesman Chris Bryan explained.

Hegar, whose family owns a ranch near Eagle Pass on the border, knows “the recent massive increase in illegal border crossings” has ratcheted up border enforcement costs for border communities as well as the state, Bryan said.

“When the health care burdens associated with caring for migrants testing positive for COVID are factored into the increased law enforcement needs, the costs associated with the federal failures on the southern border are no doubt staggering,” he said.

The Hegar spokesman was referring to how Gov. Greg Abbott and members of the GOP-controlled Legislature, with only a sprinkling of Democratic support from border lawmakers, have more than tripled state spending on border security, to $2.8 billion in the current two-year budget cycle.


Logic questioned

Alex Nowrasteh, an immigration expert with the libertarian Cato Institute, questioned such logic. He noted that Texas has no choice but to let children of illegal immigrants attend public school, which the U.S. Supreme Court required in Plyler vs. Doe in 1984.

However, “those costs that state government decides to do aren’t like baked into state law, right?” he said. “It’s very weird to me to include the costs of a short-term political decision trying to enforce federal immigration laws on the state level and to count that against immigration. If anything, you should count that cost against the immigration restrictionists who support closing the border, not against the people who are not committing other crimes.”

Nowrasteh has published several analyses of crime data showing that undocumented immigrants in Texas are far less likely to be arrested and convicted for crimes than native born Americans.

Unauthorized migrants’ main costs for taxpayers include emergency Medicaid for women needing to give birth, the federally paid Women, Infants and Children nutrition program, and education and school lunch programs, he said.

As Strayhorn noted in her study 15 years ago, though, undocumented immigrants are barred by law from participation in many of America’s best-known social programs, such as Medicare, Medicaid, the Children’s Health Insurance Program, food stamps, Supplemental Security Income, public housing assistance and federal grants creating jobs for poor people and child care.

Strayhorn said her effort was “at best an educated guess.”

“It is difficult to count a population that does not want to be counted, particularly when the law allows them access to many government services without regard to citizenship, such as those delivered by public hospitals and public schools,” she wrote.

Other government services to undocumented immigrants, beyond education and uncompensated care at emergency rooms, include the Children with Special Health Care Needs program for children with extraordinary chronic conditions and disabilities; and certain mental health, substance abuse, public health services and programs for women and children, such as the Family Violence Program, Strayhorn’s report said.

Since she issued it, three in-state economists separately have done updates showing undocumented immigrants to generate an even bigger net gain to Texas’ governmental coffers than Strayhorn found. In 2016, Waco’s Ray Perryman said their tax contributions to the state exceeded their draw-down of state social and educational services by $11.8 billion a year, and that local governments had an annual net gain of $900 million.

“Restrictive immigration policy will cause substantial economic and fiscal losses,” The Perryman Group’s study concluded.

ACLU update of Strayhorn study

In 2017, Angelou Economics of Austin, working for the ACLU of Texas, updated Strayhorn’s study by estimating the number of undocumented immigrants in the state had increased by 250,000, to 1.65 million. They racked up $1.7 billion in K-12 and higher education costs, $99.8 million in health care costs and $224.7 million in incarceration costs, Angelou found. But that $2 billion was exceeded by the $2.7 billion in tax revenues and lottery ticket sales that flowed to the state in 2017 from unauthorized immigrants, it said.

Last year, José Iván Rodríguez-Sánchez, a postdoctoral research fellow at Rice University’s Baker Institute for Public Policy, crunched the numbers. He found that for every $1 state government spent on public services for undocumented immigrants in 2018, Texas collected $1.21 in revenue.

“They are paying more than what they are costing,” Rodríguez-Sánchez said in a recent interview.

If anything, the Strayhorn study understated the unauthorized immigrants’ economic contribution, by not looking at their home ownership rates and multiplier effects of their employment in various sectors, he said. Similarly, Strayhorn’s report “completely ignored” the chilling effect fears of deportation have on undocumented immigrants’ participation in health care, mental health and substance abuse programs, the Rice scholar wrote. During Trump’s presidency, the wariness increased, Rodríguez-Sánchez noted.

The tax and spending systems of individual states make a huge difference in whether noncitizens who are in the country without permission constitute a net cost or a net gain.

Strayhorn, noting Texas’ lack of an income tax and how it relies “heavily” on sales and other consumption taxes, said it’s more efficient at wringing out tax revenue from undocumented immigrants than other states. Cato’s Nowrasteh agreed, saying Texas’ tight-fisted social programs and “relatively flat or even slightly regressive” tax structure mean it captures more from and pays out less to undocumented immigrants than, say, California.

The Golden State’s income tax, which collects 1% from married couples making less than $18,650 but 12.3% from those making more than $1.25 million, “doesn’t capture so much the taxes paid by illegal immigrants who happen to be less skilled and make higher lower income,” he said.

Paxton lawsuit

Paxton, the Texas AG, succeeded in late February in persuading U.S. District Judge Drew Tipton of Corpus Christi to block the Biden administration from enforcing a Jan. 25 Department of Homeland Security memo that paused most deportations for 100 days.

Tipton rejected data Paxton’s office submitted on uncompensated care at safety-net hospitals such as Dallas’ Parkland Memorial Hospital, the freshest of which was 13 years old. He also waved off state taxpayer burdens that the Texas attorney general’s office put forward for emergency Medicaid, prenatal care provided in the CHIP program and family violence services.

“Considering the age and uncertainty of this evidence, the Court finds it is insufficient to support a claim to an ‘imminent’ injury that is ‘certainly impending’ from Texas’s provision of these other public services,” Tipton wrote.

But Tipton accepted Paxton’s argument that Texas faced imminent financial injury if looser deportation policies spurs more unauthorized immigration.

More migrants, with fewer being deported, could drive up the costs to state taxpayers of educating unaccompanied immigrant children and incarcerating undocumented immigrants with criminal convictions, Paxton argued. In fiscal 2017, Texas public schools taught 5,374 unaccompanied minors, at a state cost of $52.9 million, he said, recycling a Texas Education Agency official’s declaration in an earlier state lawsuit challenging the Deferred Action for Childhood Arrivals program. In the 12 months that ended June 30, 2018, the Texas Department of Criminal Justice spent $152 million housing 8,951 unauthorized immigrants with rap sheets making them eligible for $14.7 million of federal reimbursement that year, he said.

Tipton accepted those as indicators the state faced imminent harm.

Paxton did not mention the offsetting taxes that undocumented immigrants pay to the state. This week, Paxton’s spokesmen did not respond to questions on why he looked at only one side of the accounting ledger and whether he’s familiar with studies showing a net fiscal gain to the state.


Robert T. Garrett
, Austin Bureau Chief. Bob has covered state government and politics for The Dallas Morning News since 2002. Earlier, he was a statehouse reporter for three newspapers, including the Dallas Times Herald. A fifth-generation Texan, Bob earned a bachelor’s degree from Harvard University. He covers Gov. Greg Abbott, the state budget and CPS and foster care.

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