Texas Comptroller reports undocumented immigrants good for economy

by Duke1676

A report released this week by the Texas Comptrollers Office found that undocumented immigrants contributed $17.7 billion to that states economy and that state revenues collected from undocumented immigrants exceeded what was spent on services for them by $424.7 million.

The report found that undocumented immigrants in Texas generated more taxes and other revenue than the state spends on them. These findings run in direct contradiction to a recent report from The Federation for American Immigration Reform (FAIR), “The Cost of Illegal Immigration to Texans” which claimed that "Texas’s illegal immigrant population is costing the state’s taxpayers more than $4.7 billion per year for education, medical care and incarceration."

Comptroller, Carole Keeton Strayhorn, was quick to point out that this was the first time any state agency in the country presented "a comprehensive financial analysis of the impact of undocumented immigrants on a state’s budget and economy, looking at gross state product, revenues generated, taxes paid and the cost of state services."

The report titled "Undocumented Immigrants In Texas: A Financial Analysis of the Impact to the State Budget and Economy" found that "“the absence of the estimated 1.4 million undocumented immigrants in Texas in fiscal 2005 would have been a loss to our gross state product of $17.7 billion. Undocumented immigrants produced $1.58 billion in state revenues, which exceeded the $1.16 billion in state services they received."


Much has been written in recent months about the costs and economic benefits associated with the rising number of undocumented immigrants in Texas and the U.S. as a whole. Most reports tie the costs of the undocumented population to education, medical expenses, incarceration and the effects of low-paid workers on the salaries of legal residents. Revenue gains to governments resulting from undocumented immigrants consist primarily of taxes that cannot be avoided, such as sales taxes, various fees and user taxes on items such as gasoline and motor vehicle inspections.

This financial report focuses on the costs to the state of Texas; that is, services paid for with state revenue, including education, healthcare and incarceration. What government- sponsored services are available to undocumented immigrants is often determined by federal restrictions on spending (Exhibit 1). The report also identifies areas of costs to local governments and hospitals. Finally, it analyzes the $17.7 billion impact on the state’s economy as well as state revenues generated by undocumented immigrants.

The Comptroller’s report estimates that undocumented immigrants in Texas generate more taxes and other revenue than the state spends on them. This finding is contrary to two recent reports, FAIR’s, “The Cost of Illegal Immigration to Texans” and the Bell Policy Center’s “Costs of Federally Mandated Services to Undocumented Immigrants in Colorado”, both of which identified costs exceeding revenue.


The immigration debate has become more heated in 2006. Congressional hearings were held across the U.S. to discuss the impact of undocumented immigrants on the economy and the culture. At the same time, two distinctly different pieces of legislation were voted out of the U.S. House and Senate.

The Comptroller’s office estimates the absence of the estimated 1.4 million undocumented immigrants in Texas in fiscal 2005 would have been a loss to our Gross State Product of $17.7 billion. Also, the Comptroller’s office estimates that state revenues collected from undocumented immigrants exceed what the state spent on services, with the difference being $424.7 million (Exhibit 1Cool.

The largest cost factor was education, followed by incarceration and healthcare. Consumption taxes and fees, the largest of which is the sales tax, were the largest revenue generators from undocumented immigrants.

"Undocumented Immigrants In Texas: A Financial Analysis of the Impact to the State Budget and Economy"

The study did show that unlike the state, local governments and hospitals incur costs that are not reimbursed by the state or federal government.

While not the focus of this report, some local costs and revenues were estimated. State-paid health care costs are a small percentage of total health care spending for undocumented immigrants. The Comptroller estimates
cost to hospitals not reimbursed by state funds totaled $1.3 billion in 2004. Similarly, 2005 local costs for incarceration are estimated to be $141.9 million. The Comptroller estimates that undocumented immigrants paid more than $513 million in fiscal 2005 in local taxes, including city, county and special district sales and property taxes.

While state revenues exceed state expenditures for undocumented immigrants, local governments and hospitals experience the opposite, with the estimated difference being $928.9 million for 2005.


The $1.3 billion in uncompensated costs to local hospitals attributed to undocumented immigrants represents 14% of the total $9.2 billion in uncompensated care reported for uninsured and underinsured individuals who could not pay for the services they received. As healthcare professionals are quick to point out, the problem of uncompensated care is systemic and not limited to the undocumented. Studies show that the undocumented generally utilize health services at a much lower rates than legal residents and that the chief causes of increasing rates of uncompensated costs are the ever increasing numbers of uninsured coupled with limited payment schedules of government programs such as Medicaid and Medicare.

Source: HispanicBusiness
Original Report: PDF