How do federal and state/local cost estimates of unauthorized immigration differ and why?
Executive summary
Federal and state/local cost estimates of unauthorized immigration differ because they measure different baskets of spending, use distinct time horizons and counterfactuals, and apply divergent assumptions about taxes, benefits, and who counts as “unauthorized,” producing widely varying headline figures from nonpartisan agencies like the Congressional Budget Office to advocacy groups such as FAIR [1] [2] [3]. Nonpartisan work typically finds net federal benefits or small net federal costs over long horizons while showing concentrated short‑term burdens on state and local budgets; advocacy reports emphasize near‑term gross expenditures and criminal justice or welfare line items to produce large net costs [1] [4] [3].
1. Different scopes: what “costs” are counted and at which government level
Federal estimates and nonpartisan studies usually take a broad, multi‑year view that includes federal revenue effects, longer‑term contributions to Social Security and taxes, and federal grants to states, whereas many state/local estimates—and some advocacy tallies—focus narrowly on immediate spending categories that states and localities actually pay for, such as public education, emergency health care, and local law enforcement [1] [2] [4]. Advocacy pieces like FAIR’s recent study sum program outlays and criminal‑justice expenses accessible to or associated with unauthorized immigrants to arrive at a large annual net cost after subtracting an estimated tax offset [3] [5]. By contrast, CBO papers explicitly target state and local budget impacts for specific services and separately analyze federal budget and macroeconomic effects, which can produce smaller or even opposite net effects at the federal level [2] [1].
2. Methodology: time horizon, counterfactuals and population definitions
CBO’s work highlights that results depend on whether analysts count only recent arrivals or the lifetime fiscal impact of newcomers, whether children born in the U.S. to unauthorized parents are included, and whether immigrants are treated as renters or homeowners for tax purposes—choices that materially change tax and spending estimates [4] [1]. Advocacy and think‑tank reports often use snapshots (annual fiscal years) and sometimes broader population tallies—FAIR’s calculations, for example, produce an annual net cost by comparing gross program expenditures to estimated taxes paid in a single year [3] [5]. Academic lifetime‑impact approaches can show federal fiscal gains over immigrants’ lives even if short‑term federal enforcement and emergency care costs rise, a distinction stressed in CBO and Manhattan Institute analyses [1] [6].
3. Revenue offsets: taxes paid and federal transfers
Estimates diverge sharply on how much unauthorized immigrants pay in taxes and how much federal aid offsets state/local burdens; EPI and other researchers find unauthorized workers pay substantial federal, state, and local taxes—nearly $100 billion in a recent study—while nonpartisan reviews emphasize that federal grants partially compensate states but do not fully cover local costs [7] [2]. FAIR subtracts an estimated ~$31 billion in taxes from its gross cost figure to reach a $150.7 billion net annual cost, a methodology point that critics say depends heavily on disputed assumptions about program eligibility and tax flows [5] [3]. CBO explicitly models how federal revenues and grants are distributed and notes that federal fiscal effects are spread nationally while state and local impacts concentrate where immigrants settle [1] [2].
4. Enforcement, detention and criminal‑justice accounting
Some high headline figures give large weight to enforcement and detention spending—federal increases in immigration enforcement budgets and ICE detention capacity are central in recent critiques of federal spending—but these enforcement costs are budgeted at the federal level and can dwarf some non‑enforcement federal law‑enforcement budgets, complicating apples‑to‑apples comparisons with state and local service costs [8]. FAIR and congressional Republicans have emphasized criminal‑justice costs charged to local systems as a major component of net fiscal burdens, whereas nonpartisan analysts caution that attributing local criminal‑justice costs solely to unauthorized status requires careful case‑level data and counterfactuals [3] [9] [2].
5. Political framing and methodological critiques
The choice of methodology often reflects implicit agendas: advocacy groups like FAIR and some House committees frame costs to argue for stricter enforcement and to highlight fiscal strain on localities, while CBO and academic centers aim to illuminate tradeoffs across time and levels of government; independent critiques (for example, Cato’s appraisal of FAIR’s study) have called some advocacy methods “fatally flawed,” underscoring how political objectives shape what gets counted and how [5] [10] [9]. Nonpartisan sources note the consistent pattern that immigration tends to be net positive or neutral for the federal budget over the long run but more likely to impose short‑run fiscal pressures on states and localities that receive large inflows [1] [7].