This issue surfaces periodically during immigration debates, usually brought up by self-interested politicians or talk-show hosts trying to drum up support for anti-immigrant legislation. The issue reared its ugly head again in Utah after the Legislative Auditor General's Office released an estimate of the costs of educating undocumented immigrants in Utah's public schools.
The price tag for state and local governments is between $54.9 million and $85.4 million, according to the audit. This report has been justly criticized for ignoring the contributions undocumented immigrants make to state tax revenues.
No one with any sense would make a policy decision without considering its costs and benefits, so as a policy document the audit is meaningless.
Since state leaders seem unwilling to measure the revenue contributions made by undocumented immigrants, and since it is important that someone do so, I decided to put pen to paper and come up with an estimate.
When thinking about whether immigrants who enter the country illegally pay taxes, it is worth remembering the old truism about death and taxes. Though it might be relatively easy to shirk on income taxes, other taxes like sales taxes, taxes on alcohol, fuel and cigarettes, and motor vehicle registration fees, are impossible to avoid because they are collected automatically the moment the economic transaction is carried out.
Property taxes, which are a major source of funding for public schools, are also hard to avoid. Granted, undocumented immigrants are unlikely to be homeowners, but they still pay property taxes indirectly as renters. Together, sales taxes, excise taxes, income taxes and property taxes account for the bulk of the revenues used to fund Utah's $3.5 billion public education budget.
By using the legislative auditor's estimates of the undocumented population in Utah (somewhere between 75,000 and 100,000), and by making some simple, justifiable and conservative assumptions about the rate at which low-income workers and undocumented immigrants pay taxes (based on methodologies used by other studies in Utah, Missouri and Oregon), I estimate that undocumented workers pay between $95 million and $127 million in state and local taxes each year.
My estimate assumes that undocumented immigrants pay sales and excise taxes, comply with 50 percent of their share of property taxes, but pay no other taxes or fees at all. I also used other methods and other assumptions to gauge the accuracy of my estimate.
Assuming that undocumented immigrants pay only sales taxes yields a low range of about $80 million to $110 million. Assuming they comply with 50 percent of property and income taxes yields a high estimate of $108 million to $144 million.
Of course, these numbers are only approximations, but if anyone doubts my numbers, they should request that the governor's office conduct an audit of the state and local taxes that undocumented immigrants pay. I would welcome such a study.
If my numbers are even remotely correct, this means not only that undocumented immigrants pay their fair share of educational expenses, but that their tax contributions help offset the costs of public education for all of Utah's children.
Indeed, the bigger the size of the undocumented population, the bigger the surplus revenue they generate. This may seem counterintuitive at first, but makes sense given that the ratio of working-age adults to children is much higher among immigrants than among the general population.
Far from being an unfunded mandate or requiring a tax increase, the presence of hard-working undocumented workers helps fund schools and social services, ensuring a better education (and perhaps even bigger tax cuts) for all.
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* CLAUDIO HOLZNER is an assistant professor in political science at the University of Utah. He co-authored a study of the economic impact of the Utah-Mexico relationship with Kenneth Jameson and Thomas Maloney in 2006.
