Immigration costs more than thought

Peter A. Brown:

In the emotional debate over immigrants, there has always been an ambiguity about whether they are a financial burden or bonanza.

But now, a renowned University of Florida economist who is admittedly pro-immigration in his personal politics has found that its net financial cost to taxpayers is much larger than anyone had been able to quantify previously.

UF economist David Denslow found a net cost of $1,800 per year to the state per immigrant family, which will provide ammunition for the anti-immigration folks.

Denslow's academic credentials and political track record add credibility to the finding. He is a distinguished service professor, a registered Democrat who voted for President Bush in 2000 but against him in 2004, and was an adviser to Republican Gov. Bob Martinez in the 1980s.

He crunched the numbers and found in Florida each immigrant household costs the state roughly $1,800 on a net basis. In other words, $1,800 is the total of how much more public services immigrants consume mostly Medicaid and education and how much less in taxes they pay than does the average resident.

Although his research and calculations pertain only to Florida, "We would think that would be close to the national figure" for other states, Denslow said.

The work on the cost of immigrants is a small, until now ignored, item in a much bigger report on the future of the Florida economy commissioned by Florida State University's LeRoy Collins Institute.

But, its impact on the national immigration-policy debate could be substantial.

Denslow did not calculate the net amount of federal taxes paid and federal government services consumed by immigrants compared to residents, so the impact on the U.S. Treasury is unknown.

Because he did not distinguish between legal and illegal immigrants, the $1,800 figure is the average of both.

But just taking the roughly 10 million illegal immigrants in the United States, and using Denslow's figures, that would come to a cost of about $18 billion annually, slightly more than the entire NASA budget.

In any case, the information is important to the swirling debate and should spur a serious study of the financial impact on the federal government.

Denslow guesses the federal government might get a bonus due to his belief that millions of illegal immigrants pay Social Security taxes, but are unlikely to collect benefits.

In the past, the academic estimates of the financial cost of immigration have been much less precise. There has been a general sense that there are financial pluses and minuses to immigration.

Proponents argue immigrants are vital to the U.S. economy by providing workers for jobs employers can't fill with native-born Americans, not to mention the emotional argument that virtually all of us have immigrant roots.

That is why there is such strong support from the business community for a policy like the one suggested by President Bush. It would set up a guest-worker program, but limit the ability of undocumented immigrants to become citizens.

Those who are against immigration argue that America's borders are too porous, and that the costs of allowing so many people to immigrate will eventually become excessive because they are a drain on publicly provided services.

It is this argument that gets a boost from Denslow's study.

Denslow says his estimate of the net cost of immigrants is more accurate than previous ones that showed little financial impact because he did his analysis by family, rather than by individual.

Previous studies counted the number of individual immigrants in calculating the cost of immigration.

But that method underestimates the costs of immigration, he said, because it does not take into account the fact that immigrants have children who are born in the United States.

When one calculates the cost of immigration by individual immigrant, those children, who are U.S. citizens, are not counted. But, these children use government services and will not pay taxes for many years, and if their parents had not immigrated, they would not be in the United States to begin with.

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