The Fiscal Cost of Low-Skill Immigrants to State and Local Taxpayers

Source: Robert E. Rector, The Heritage Foundation, Testimony Before the Subcommittee on Immigration of the Committee on the Judiciary of the United States House of Representatives, Delivered May 17, 2007

In FY 2004 there were around 4.5 million low-skill immigrant households in the U.S. containing 15.9 million persons. About 60 percent of these low-skill immigrant households were headed by legal immigrants and 40 percent by illegal immigrants. The analysis presented here measures the total benefits and services received by these “low- skill immigrant households” compared to the total taxes paid.

In FY 2004, the average low skill immigrant household received $30,160 in direct benefits, means-tested benefits, education, and population-based services from all levels of government. By contrast, low-skill immigrant households paid only $10,573 in taxes in FY 2004. A household’s net fiscal deficit equals the cost of benefits and services received minus taxes paid. The average low-skill household had a fiscal deficit of $19,588 (expenditures of $30,160 minus $10,573 in taxes).

At the state and local level, the average low skill immigrant household received $14,145 in benefits and services and paid only $5,309 in taxes. The average low skill immigrant households imposed a net fiscal burden on state and local government of $8,836 per year.

The fiscal burden imposed by low skill immigrant households is slightly greater at the state and local level than at the federal level. The annual fiscal deficit for all 4.54 million low skill immigrant households at the state and local level in 2004 was $49.1 billion. Over the next ten years the state and local fiscal deficit caused by low skill immigrants on state and local governments will approach a half trillion dollars.

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