Loss Of Undocumented Workers Would Cost Texas Billions

Leave it to Texas Comptroller of Public Accounts (and defeated candidate for Texas Governor) Carole Keeton Strayhorn, Austin’s favorite chameleon, for belting out a swan song that is not only reasonable and important but also something that earns her national attention.

That swan song, of course, is her new, 21-page report, “UNDOCUMENTED IMMIGRANTS IN TEXAS: A Financial Analysis of the Impact to the State Budget and Economy.”

How important is this report to the state and national debate on immigration? Since I’m always one to give credit where credit is due (even to a Republican), I don’t think it is being too dramatic to say it’s kind of like Martin Luther’s 95 Thesis or, in more recent times, the Iraq Study Group Report.

It’s already proved to be like both in that it seems to have changed Governor Perry’s opinion on immigration almost overnight.

If you wonder why, consider the first paragraph of Strayhorn’s commentary. Warning: Grab your socks and hose and pull, because it may blow them off:

“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. However, local governments bore the burden of $1.44 billion in uncompensated health care costs and local law enforcement costs not paid for by the state.”

As Matt Glazer said at Burnt Orange Report, “that’s right, billion with a ‘b.’”

You’re probably wondering, “how.” First of all, we’re not just talking about pregnant power washing nannies here. Those 1.4 million undocumented workers are doing a lot of work, and spending a lot of money in our economy.

Of course, there is a cost to this boon, as Strayhorn notes. I’ll address that later because I want to take issue with part of her statement. First, though, more from the report.

I took a look at those totals when I initially saw the report and was wondering how many psychics the Comptroller’s Office had to hire to determine this since the tracking of undocumented workers and their money is something that would be seemingly difficult even for One Tough Grandma.

However, the report lucidly discusses that and, it turns out, no psychics were required [emphasis mine]:

Consumption taxes make up a greater percentage of total state revenue in Texas than in most other states. Since undocumented immigrants are more likely to work in the underground economy from which income taxes may not get collected, the Texas tax system, compared to other states, may capture a greater percentage of all the taxes that should be paid from the economic activity of undocumented immigrants.
As this report shows, calculating the impact of undocumented immigrants on the Texas economy and state budget is at best an educated guess. This is a result of the difficulty in calculating the number of undocumented immigrants in the state and the number who access state paid services. It is difficult to count a population that does not want to be counted, particularly when the law allows them access to many government services without regard to citizenship, such as those delivered by public hospitals and public schools.

This is about where I start to take issue with Strayhorn’s report. And, by “take issue,” I don’t mean I doubt the economic impact, but that the burden on some state services is overplayed and overcalculated.

“Exhibit 5″ was one of the things in the report that I looked at and immediately found fault with. To Strayhorn’s credit, though, the fault is pointed out in the report.

Exhibit 5 is a table that shows that Texas’ institutions of higher learning have been forced to bear a cost of about $11 million last fiscal year because of non-citizen college students.

Looking at that, I immediately knew there was no way, given the massive number of international students from other countries who can, after a year, claim Texas residency and get in-state tuition rates, that these calculations could be blamed on illegal immigrant college students.

While Strayhorn’s report addresses my concern, it also seems to downplay the impact of international students on this total by essentially indicating that only the children of ambassadors and diplomats get in-state tuition:

It should be noted that these numbers are for all students who established residency for in-state rates under Section 54.052(j), regardless of their immigration status; not all were undocumented immigrants, despite the fact that the media often describes them as such. There are many types of visas for non-immigrants that could allow a foreign student to fulfill the residency requirements for in-state tuition; for example, the children of ambassadors and diplomats, or their employees. The Comptroller’s office cannot determine the share of Section 54.052(j) students representing undocumented immigrants. If all these students were undocumented, the cost to the state in fiscal 2005 would have been $11.2 million.

I really thought I was about to be upset, though, when I saw the heading “immunizations,” thinking the Comptroller’s Office was about to overstate the burden of haveing to immunize undocumented children. For one thing, given that vaccines are terribly over-priced by drug companies and that I don’t even think the most right-wing of Republicans should lower themselves to the point of saying children of illegal aliens should not be vaccinated (for various reasons), I was ready to pounce on whatever estimate spewed out.

Turns out, though, that I didn’t have to:

In Mexico, the largest country of origin of undocumented immigrants, almost 96 percent of children under the age of five have received all their vaccinations, compared to 79 percent of U.S. children under age three. As a result, many undocumented school-aged children who arrive in Texas will have all their age-appropriate vaccinations. Students who do not have proof of their vaccinations must either provide documentation or receive another series of vaccinations. While many have documentation, the Comptroller is unable to determine the percent of those who do not.
This makes estimating the state cost of providing immunizations to undocumented children attending Texas public schools difficult to calculate, because there is no way to determine when undocumented children currently enrolled in Texas schools arrived in the U.S., or the percent who had some or all their immunizations before immigrating. Costs associated with undocumented children are miniscule, with the Comptroller’s estimate being about $33,000 in fiscal 2005. This is based on four percent of undocumented children in public schools, or 5,400, receiving immunizations. These 5,400 children account for .12 percent of total school enrollment. This figure was applied to the $26.0 million in state funds.

I’d venture to say the state and federal government paid far more than $33,000 vaccinating the children of legal residents on Medicare and Medicaid and CHIP during the same period.

There are some other things of importance to note about the conclusions concerning the cost to the state as well.

The majority of the figures in this report relating to the cost of undocumented persons on Texas government are in the millions. However, remember that state spending overall in these areas is in the billions.

Let’s look at the numbers:

In FY 2005, $19,590,860,985 ($19.6 billion) was appropriated for Health & Human Services by the Legislature [source: HB 1, General Appropriations Act, 79th Legislature (conference committee report, revised after vetos)]. According to the Comptroller’s report, the state spent $57,996,990 ($57 million) on HHS expenditures (ranging from emergency medicaid to mental health services) for undocumented immigrants.

Translated, the state spent roughly three-tenths of one percent of the entire Health and Human Services appropriation for FY 2005 on undocumented immigrants. In the big picture, that’s not a lot given that this group would cost the economy $17.7 billion dollars (or, the rough equivelant of 90.35% of the FY 2005 appropriation for Health & Human Services) if they were suddenly scooped up in the middle of the night and deported.

The bottom line with Strayhorn’s report is that it’s not bad, but, like so many of things she has done previously, it’s a good example of fence-sitting, appeasing the far-right and middle-to-left politics.

Why? It serves the purpose of the anti-fence, pro-immigration crowd by showing that the loss of the undocumented immigrants would cost the state a dollar amount equivelant to 90 percent of one of the state’s largest budget items while also doomsaying about the “burdens” the undocumented put on the state without putting it in an appropriate context.

Consider this conclusion of the report:

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.

Again, in the grand scheme of things, $424.7 million is less than ONE PERCENT (.73 percent) of the entire FY 2005 appropriation of $57,823,242,798.

I can’t really speak to the cost that Strayhorn claims immigrants have on local governments. The best figure I could pinpoint in her report was $92 million spread over 95 percent of Texas counties. Her impact on local government calculations seems to be a hodge-podge of what sheriff’s offices claim to have spent on illegal immigrants (note: probably not the most reliable reporters, especially given the tables in the report) versus other county department costs.

If $92 million is all, given that the average county budget in Texas is probably between $8-13 million, that figure would probably downplay the actual impact.

Anyway, two things are clear to me:

1.) The negative impact on Texas if undocument immigrants suddenly dissapeared (or were “walled off”) would be very, very costly.

2.) The Comptroller’s Office, in an attempt to appease right-wingers like State Rep. Leo Berman and anti-immigrant crusaders, has grossly oversimplified (and as such, overstated) the impact of undocumented workers on the Texas budget.

With regard to (2), I’m not quarreling with Strayhorn’s figures. But, I do think she could have put them in better perspective as I did above so that the public would realize that, percentage wise, the negative economic impact is practically negligable.

Related posts:

1. The Tax Plan: Will It Cost More Than Advertised?
2. United Auto Workers Will “Chase” Caterpillar Jobs To Texas
3. OTG: Plan Billions Short
4. State GLO To Invest Billions In Commercial Real Estate
5. Perry Opposes Efforts To Dump Tuition Breaks To The Undocumented