Sanctuary cities and states will bear the lion's share of amnesty cost
As Congress ponders an immigration reform bill that may result in amnesty, the Heritage Foundation has released the most comprehensive report to date on the long-term fiscal cost of such an amnesty. Critics of reports such as these often respond by stating that immigrants pay their own way, and that immigrants are not using up more entitlement benefits than they are receiving.
These critics are apt to say that there are other studies which prove that immigrants, once they become lawful, will not place a heavy burden on existing federal programs. However, the studies noted by these critics do not include the cost of education or the cost of publicly provided services such as roads, utilities, and numerous other expenses borne by everyone. The Heritage Foundation study does show the national costs of all of these additional programs.
The Heritage Foundation estimate of the cost of amnesty at $6.3 trillion is as accurate as can be made today for the entire country. What one must realize is that these aggregate costs are based on national data sources, while the costs will be disproportionately borne by a small number of large urban areas where illegal immigrants congregate. These are also the three largest cities in the U.S.: Chicago, Los Angeles, and New York City.
Because these cities have highly concentrated illegal immigrant populations (14 Wards in Chicago are 65% or more Hispanic), the costs are amplified for the local taxpayers. It is no coincidence that the three states with the highest illegal (Heritage Foundation calls them unlawful; the words are interchangeable) immigrants are also in the worst fiscal condition. These are New York State, California, and Illinois. California has had a number of cities, such as Stockton, Vallejo, and San Bernardino, declare bankruptcy. Since illegal immigrants are earning less money and paying less taxes, while the public expenses stay the same, fiscal shortfalls have been the result. This is particularly true of cities that have had strong public-sector union contracts. These contracts have provided for high salaries, pensions, and benefits, but as the revenues collected by these cities decline (but the expenditures increase due to retirement and annual raises), the bankruptcies will continue to follow.
There is a very strong correlation between the Democratic control of a city and the strength of the public-sector contracts. Consequently, cities and states with a long history of control by the Democratic Party have the most debt. These are also New York, Illinois, and California. The areas are all sanctuaries for illegal immigration. As I have shown here before, it is the public-sector unions and their Democratic leaders who promote illegal immigration to achieve electoral security and save public-sector union jobs. This theory is support by the fact that urban areas controlled by Democrats now have both the highest rates of illegal immigration and the highest unfunded pension liabilities. It then follows that the cost of amnesty, which comprises legacy costs of sanctuary policy, would be highest for these communities.
I have reported here in AT that the largest contributors to campaigns in Illinois are the two teacher unions; and nationwide public-sector unions are four of the 12 greatest campaign contributors. The great majority of the money they earmark for national campaigns goes to the Democratic Party. And the amount of money spent in education is not trivial: the Cato Institute found that nationwide, over one fourth of the local and state expenditures are for education. This proportion rises every day as teachers retire.
Regarding the cost of schools, it is interesting to note that while the Heritage report cites an average of $15,514 per year provided to unlawful immigrant households headed by a person without a high school degree, the Cato Institute reported in 2010 that in de facto sanctuary cities with high Hispanic populations, the cost of education is much higher. In L.A. it's $25,000 per pupil per year (20% higher than the high-income district of Beverly Hills). Chicago spends $15,875 and NYC $27,000 per year. And these figures are not for families headed by persons without a high school degree, which in the Heritage report are the highest of any group. Additionally since Mexican families average 3.5 children, these figures must be multiplied by 3.5 for each household. So a Mexican family in L.A. receives $87,500 per year from taxpayers in education benefits.
This perspective indicates that high-Hispanic population cities have the highest per-pupil cost. This proves that the fiscal cost of amnesty will be much higher for these sanctuary cities than for the rest of the country.
Since the three-largest cities have such high illegal immigrant populations, they already experience shortfalls of public revenue needed to pay for state and local programs. This reinforces the Heritage report's information on the high cost of amnesty. President Obama made up for these revenue shortfalls by distributing some of the Stimulus and Recovery Act money to states and school districts. He also gave money to daycare centers in the highly segregated Hispanic neighborhoods. This pattern is also seen in New York and Los Angeles.
It would be very useful, then, to calculate the fiscal cost of amnesty for each major city. There are some figures that indicate how high these will be. Chicago, for example, now has a public school population that is 44% Hispanic. And the majority of illegal immigrants (80%) are Hispanic. Because Hispanics now have a high school dropout rate nearly twice that of blacks, and sanctuary cities already have the highest per-pupil cost, the fiscal cost of amnesty will be much more devastating to the economies of these cities.
Traditionally, cities have been the engines of job growth. Since so much disposable income is already being swallowed up by the cost of illegal immigrant programs, hidden in higher property and other taxes, we don't have to wait for amnesty for the public costs of illegal immigration to have an effect on consumer spending and job growth.
An additional cost, which the Heritage report omitted, is the cost of service of public debt. Because the Stimulus and Recovery Acts provided borrowed funds to pay for the teacher unions and other public services provided to illegal immigrants, there is no doubt that illegal immigration has already made a significant contribution to debt on the local, state, and national levels. This is revealed by the public-sector unfunded pensions, since in the large cities and nationally only the Hispanic part of the population of school-age children is growing.
One need not wait for amnesty for illegal immigration to have a powerful impact on the economy; it's already happened. In a remarkably short time, just 25 years, illegal immigration, since it encourages the low-skilled and poorly educated to settle in the biggest cities with the highest public-sector costs, has already lowered the standard of living for all Americans and established anti-growth levels of debt for both the states that promote sanctuary and the nation.