Stateline Story

States Want Cash for Costs of Illegals

  • June 06, 2006
  • By John Gramlich

States are raising their voices in the Capitol Hill debate over immigration reform, telling Congress they have a financial stake in how the United States deals with those here illegally.

States specifically are lobbying for two sources of federal funding that would help them cover the cost of services they provide to the estimated 12 million illegal immigrants in the country.

The U.S. Senate-passed immigration bill contains a provision that would raise an estimated $7.5 billion from fees imposed on immigrants seeking legalization to reimburse states for emergency health care and education costs. Separately, states are pressing Congress to continue a program zeroed out in President Bush's fiscal 2007 budget proposal that allots hundreds of millions of dollars for law enforcement costs generated by illegal border crossers.

Any immigration reform plan that emerges from Congress "must include a funding stream to address the fiscal impacts on state and local governments," Georgia state Sen. Don Balfour (R) wrote in a recent letter to the U.S. Senate. Balfour sits on an immigration task force with the National Conference of State Legislatures, a bipartisan organization that lobbies the federal government on behalf of the nation's 7,382 state lawmakers.

NCSL has endorsed the creation of temporary worker and earned legalization programs for illegal immigrants, both of which are included in the Senate bill but not in the immigration reform measure that passed the House.

The overall cost to states from illegal immigration is hard to gauge because there is a shortage of reliable nationwide data. Recent studies have painted different pictures.

A report issued May 25 by New Mexico Voices for Children , an organization that promotes the elimination of child poverty, found that taxes paid by illegal immigrants in the state - including sales and property taxes - easily cover the costs of public education for their children. "They pay for the services they receive, and then some," the report found. But the study focused only on education, not on health care or law enforcement costs.

A more comprehensive January study by the University of North Carolina found the state's combined legal and illegal Hispanic population contributes $9 billion annually to North Carolina's economy. The net cost to taxpayers, after health care, education and law enforcement costs, is $61 million - or $102 per Hispanic resident - according to the report. In Florida, meanwhile, the costs are much higher, according to an October 2005 report by the Federation for American Immigration Reform (FAIR), which supports stricter immigration policies. "Even if the estimated taxes collected from illegal immigrant workers are subtracted, net outlays still amount to nearly one billion dollars per year," the study said.

On May 18, the U.S. Senate added an amendment to its immigration reform bill, which tightens border security but would create a temporary guest-worker program, that could direct money to states.

The amendment, sponsored by Sen. John Cornyn (R-Texas), would require immigrants who seek legal status to pay a $750 application fee - plus $100 for each dependent - that would be channeled into state and local government coffers.

The plan would establish a revenue stream that states must spend on health care and education costs. The money would be allocated based on the U.S. Census Bureau's tally of each state's current immigrant population and its expected growth, with at least 30 percent of the funds reserved for local governments.

"One of the greatest scams the federal government has ever imposed upon taxpayers across the country is unfunded federal mandates, and education costs and health care costs imposed by the federal government on local taxpayers without reimbursement is not only unfair, it is a scandal," Cornyn said in floor debate on the amendment.

Cornyn said the plan could raise as much as $7.5 billion for states based on estimates of possible enrollees. But Sheri Steisel, an NCSL analyst who is working with state lawmakers to lobby the federal government, said that "how many people would be legalized is still very much a question that has not been resolved by Congress."

Meanwhile, the Cornyn amendment would create new funding only for health care and education costs of illegal immigrants. It would not assist with another key complaint by states - law enforcement costs, such as the incarceration of undocumented immigrants. Though the federal government provides funding in the form of the State Criminal Alien Assistance Program (SCAAP), state advocates say the money is far from enough. "

SCAAP has been a long-time concern for all of the national organizations that represent state and local governments," Steisel said. "Every year it gets zeroed out, and we have to fight just to get funding back in the program."

President Bush's federal budget for the 2007 fiscal year, proposed in January, included no funding for SCAAP. But Steisel said that lawmakers likely will earmark about $400 million, which doesn't come close to covering states' costs.

The federal government significantly underfunds state expenses for incarcerating illegal immigrants, according to an April 2005 Government Accountability Office report. California, Arizona, Florida and New York - with some of the largest estimated immigrant populations - received only a quarter of the necessary funding to cover those costs, according to the GAO report.

While incarceration costs remain high for states, Texas state Rep. Leo Berman (R) said cash for health care and education costs takes precedence as the current national debate unfolds.

"I think the two major streams need to be covered first," Berman told Stateline.org . "If we can get funding for them, we can continue to exist."

Tags: Immigration