Immigration and state/local budgets

December 6, 2007

CBO released a new report this morning on the impact of unauthorized immigrants on state and local government budgets. Most analyses have found that the fiscal impact of immigrants as a whole (both legal and unauthorized, and including all levels of government) is slightly positive -- the tax revenues generated by immigrants exceed the cost of the government services they use. This study examines the literature on a more narrow question: the fiscal impact of unauthorized (as opposed to all) immigrants at the state and local government level (excluding the federal government).

Many state and local governments incur costs for services associated with unauthorized immigrants, particularly in the areas of education, health care, and law enforcement. Some of those costs are incurred because of rules governing federal programs, court decisions, and state-level statutory or constitutional requirements. CBO's review of the literature finds that the amount of spending involved is a small share of total state and local spending on these services, but the tax revenue collected from unauthorized immigrants at the state and local level does not offset the costs involved. The result is probably a modest negative net impact on state and local budgets.

The paper was written by Melissa Merrell in our Budget Analysis Division, which is the part of CBO responsible for preparing cost estimates of legislation. Melissa covers topics including immigration, administration of justice, emergency management, and regional planning in the State and Local Government Cost Estimates Unit. Prior to joining CBO, she worked for the Association of Metropolitan Planning Organizations and the League of Women Voters. She holds a master's degree in public policy from George Washington University and a bachelor's degree in political science and sociology from St. John Fisher College in Rochester, NY.