States Should be Wary of Hefty Costs for Implementation and Lost Economic Activity of State-Level legislation
As costs mount, Arizona Gov. Jan Brewer is asking a federal judge to consolidate legal challenges to the state’s “papers, please” immigration law, SB 1070. Brewer’s learning the hard way that when you attack the Constitution, civil society stands up to protect it.
Before legislators on other states follow down the Arizona path, they should do a cost/benefit analysis. Fortunately, many of their colleagues have already done the research for them. Following is a recap of studies that look at the costs to governments, businesses, and taxpayers in states that considered passing immigration crackdowns. They show that state-based immigration laws are expensive to implement, defend, and live with. What’s more, they won’t actually solve the problem, which requires a federal fix.
Instead of adopting costly, divisive, and alienating immigration reforms at the state level, state legislators should pressure Congress to do its job and pass comprehensive immigration reform. This is the only fiscally responsible and practical solution.
ECONOMIC COSTS OF STATE-BASED IMMIGRATION LAWS
Industries like tourism and agriculture stand to suffer tremendously when state-based immigration laws are considered, but a groundbreaking study out of Alabama shows the damage is not confined to certain sectors of the economy. These laws hurt businesses and consumers in various ways.
- Up to $11 billion in a single year in Alabama. University of Alabama economist Dr. Stephen Addy released a study in January 2012 showing that by driving immigrants out of the state, the state’s anti-immigration law would hurt local businesses in myriad ways. The plan would reduce consumer demand and destabilize key industries. Addy estimates that the damage could be between $2.3 billion (1.3% of state GDP) and $10.8 billion (6.2% of state GDP), in addition to costing the state up to 140,000 jobs and up to $357 million in state and local taxes. A report from the Center of American Progress provides a detailed portrait of the law’s economic impact on the state.
- $490 million to Arizona’s tourism industry in 2010. The group Arizona Employers for Immigration Reform estimated that Arizona’s tourism industry lost $490 million in revenue and 3,000 jobs in 2010 as a result of that state’s law.
- $300 million in unharvested crops alone in Georgia—ultimately taking $1 billion out of the state’s economy. The president of the Georgia Agribusiness Council estimates that labor shortages suffered by Georgia’s agriculture sector after the state’s law went into effect cost $300 million in unharvested crops—causing a “ripple effect” to state and local business that could end up resulting in $1 billion in losses.
IMPLEMENTATION COSTS OF STATE-BASED IMMIGRATION LAWS
In 2011, Kentucky, Louisiana and Tennessee abandoned “Arizona-style” bills after official fiscal notes estimated that those bills would cost state and local government agencies tens of millions of dollars to build the necessary bureaucracy and conduct training and government oversight, among other expenses related to implementation. At a time when many communities are facing budget cuts—especially to their police departments, who would bear the brunt of immigration enforcement costs—this extra expense to do a federal job just didn’t cut it. In addition to these estimated costs, there is also the certainty of extensive legal costs, as both the federal government and civil rights groups have sued the states to protect the Constitution and civil rights.
- $40 million in Kentucky—in a best-case scenario. Legislative staff in Kentucky estimated its immigration bill would have cost $89 million over several years to implement. Even assuming the state could save tens of millions in social services and would lose no tax revenues from immigrants who left (assumptions which ignore reality), the net impact of the bill would have been a $40 million loss to the state.
- $11 million each year in Louisiana. Representative Ernest Wooton abandoned his attempt to pass an Arizona-style law in 2011 once he saw the state legislature’s estimate of its price tag: $11 million in enforcement, training, and other implementation costs. “I don’t have $11 million in my pocket,” he said when he withdrew the bill.
- $5 million in year one and $2.8 million in subsequent years in Tennessee. Between the costs to the state government itself and the Tennessee constitutional requirement that the state government pick up at least some of the costs incurred by local governments, Tennessee’s 2011 anti-immigrant bill would have cost an estimated $5 million in 2011 and $2.8 million for every year after that.
- $1.5 million in legal costs in Arizona, in the first year alone. As of February 2011, only nine months after Arizona’s law was passed, the state had spent $1.5 million defending it in court. That number is certainly higher now, and by the time the first of the seven lawsuits filed against it is settled by the Supreme Court in June, it will be higher still.
THE FISCALLY RESPONSIBLE AND PRACTICAL SOLUTION? COMPREHENSIVE IMMIGRATION REFORM
States would lose millions of dollars—money they don’t have—implementing their own anti-immigration laws, and the national immigration system would be more broken than ever. We can’t restore control and order to the immigration laws with a patchwork of fifty policies in fifty states.
Studies show that even at the federal level, immigration crackdowns are extremely expensive. In fact, the only fiscally responsible, practical, and lasting solution would be enactment of comprehensive immigration reform by Congress. Instead of passing state laws to make political statements, these lawmakers should pick up the phone and pressure Congress to do its job.
- Mass deportation is extremely expensive: the government would spend $285 billion over five years…so that the economy can lose $2.5 trillion over ten. A report from the Center of American Progress calculated that the government would need to spend $285 billion in border and interior enforcement in order to deport most of the undocumented immigrants in our country today. Furthermore, as a study for the Immigration Policy Center by UCLA economist Dr. Raul Hinojosa-Ojeda found, removing those workers and consumers from the American economy would result in a $2.5 trillion drop in GDP over the next ten years.
- Earned legalization: a $1.5 trillion boost to the economy over ten years… The Hinojosa study also found that legalizing current undocumented immigrants would add $1.5 trillion to U.S. GDP over the next ten years. Both immigrant and U.S.-born workers would see their wages increase.
- …and $48-66 billion in added tax revenue. The Congressional Budget Office estimated that the comprehensive immigration reform bills considered by the Senate in 2006 and 2007 would have generated $66 billion and $48 billion in new tax revenues, respectively. In both cases, legalizing undocumented immigrants in these bills would have paid for itself, as the new revenues far exceeded the costs of implementing the legislation.
HOW TO CALCULATE THE COST OF AN ARIZONA-STYLE BILL IN YOUR STATE
The evidence is mounting that anti-immigrant state laws cost states money, rather than save taxpayer dollars. It is critical that the public know the costs regardless of whether legislators are forthright in providing a credible analysis to the public.
The American Immigration Council and the Immigration Policy Center have developed formulas to help interested parties calculate the costs of these laws to your states:
- Check list for Estimating the Cost of SB 1070-Style Legislation (Immigration Policy Center)
- Estimates of State and Local Taxes Paid by Unauthorized Immigrants, By State (Immigration Policy Center)
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