Immigration And The State Budget Deficit

by Lance Izumi

SACRAMENTO, CA – Hot on the heels of the controversial new law allowing illegal immigrants to obtain drivers licenses, California lawmakers have sent two more bills to Governor Davis that aim to increase government benefits for illegals. Yet as politicians in Sacramento open up the goodie chest for lawbreakers, new data show that a large part of California's budget deficit can be attributed to the negative fiscal impact of immigration.

One of the bills would waive community college tuition fees for between 1,500 and 2,000 illegal immigrants. In other words, illegals get a free two-year college education courtesy of the California taxpayer, while citizens are forced to pay their own way. The other bill would allow illegal immigrants to use Mexican consular identification cards to gain access to various local government programs. Democratic State Senator Gilbert Cedillo, a strong proponent of the bills, says that the measures represent a "watershed year for California democracy." He failed to acknowledge, however, that immigration is also partially responsible for the waterfall of red ink that is drowning the state.

Writing on VDARE.com, Ed Rubenstein, president of ESR Research Economic Consultants and a noted public policy statistician, has calculated the net cost of immigrants, both illegal and legal, on the California budget. According to Rubenstein, based on the array of state subsidy and spending programs, immigrants in California receive about $9.3 billion more in state expenditures than they pay in state taxes. He concludes that "nearly one-quarter (24.5 percent) of California's current $38 billion state budget deficit stems directly from immigration." Rubenstein's aggregate figures seem plausible when one considers the cost of immigration to specific government programs.

PRI's California Education Report Card: Index of Leading Education Indicators, Third Edition points out that 1.5 million out of California's six million students are so-called English language learners, meaning that they are immigrants or the children of immigrants. Besides the cost of hiring more teachers and purchasing more supplies, the PRI publication notes that tens of billions of dollars worth of state and local school construction bonds have been approved in order to provide facilities to accommodate the immigration-spurred increase. The state alone shells out almost a billion dollars per year in school-bond interest payments.

The illegal immigrant prison population in California is growing. From
1999-00 to 2002-03, the prison population of illegals in the state, based on inmate days in prison, grew by 31 percent. This increase resulted in a more than half-billion-dollar hit to the state budget in 2002-03.

Like the state, local governments are facing immigration-related fiscal nightmares. In May, the Los Angeles county health department estimated that it spends $340 million annually to treat illegal immigrants who seek emergency or follow-up care in county hospitals. Because of severe budget shortfalls, the county is cutting services and planning to close hospitals. County supervisor Mike Antonovich warns, "With our health-care delivery system on the verge of collapse . . . the issue of illegal immigrants impacts our ability to balance our budget." The Legislative Analyst's Office estimates that more than half a billion dollars in state General Fund money went to pay for illegal-immigrant health-care costs in 2002-03.

The immigration explosion has helped cause a massive budgetary implosion. Solving this problem should be a top priority for the governor of California.

Lance Izumi is a Senior Fellow in California Studies at the California-based Pacific Research Institute for Public Policy. He can be reached via email at lizumi@pacificresearch.org.