County Reports on Tax Impact of Illegal Aliens

Illegal immigrants pay about $2.8 billion in taxes here yearly--far more than they get back in such public services as police or welfare--but Los Angeles County government loses money because most of the revenue is kept by Washington, James Hankla, the county’s chief administrative officer, concluded in a report released Tuesday.

The report agrees, for the most part, with the findings of a Rand Corp. study on Mexican immigration released earlier this month. The Rand study, conducted for the chief executives of California’s biggest corporations, found that Mexican immigrants--whether legal or not--are an economic asset to the state’s economy.

The latest report, prepared by Hankla’s staff for the Board of Supervisors, complains, however, that the burden of providing routine government services to an estimated 1.1 million illegal immigrants falls unfairly on the Los Angeles County treasury.

Of the large tax contribution attributed to illegal immigrants, about 60% is paid to the federal government through income and other taxes, the county study estimated. Thirty-two percent is paid to the state and only about $110 million a year ever reaches Los Angeles County for local purposes.

Because illegal aliens are assumed to use about $272 million in local government services, the county has to pay about $162 million out of local taxpayers’ pockets, the county staff concluded.

Relying on Estimates

The report said clear and credible information on the illegal population and the government services it uses is unavailable, so such studies rely on estimates.

In this case, the study used the 1980 census count of 658,000 illegal aliens in Los Angeles County and data from other sources to estimate a current illegal alien population of 1.1 million. The study also assumed that illegal aliens pay the same proportion of their income in taxes to Washington and Sacramento as the rest of the population, Lloyd Halstead, a county financial analyst, said Tuesday.

In addition, Halstead said, the equation does not account for federal tax collections that are returned to Los Angeles County in the form of grants and funding for such large projects as highways and storm drains. If those funds were counted, the costs of providing services to illegal aliens would be somewhat reduced.

Health care is the biggest cost the county faces from illegal immigrants, Halstead said. Few illegal immigrants who are poor receive cash welfare benefits--fewer than 5% of all immigrants, legal or otherwise, according to the Rand study--but county officials estimate that $114.9 million was spent on health care for poor immigrants in Los Angeles last year.

The Rand study found that Latino immigrants pay their way in American society--and more--with the exception of public education costs. Most poor families, whether native or immigrant, receive more schooling than their direct taxes would buy.

On the other hand, the Rand study indicated, the presence of immigrants has kept wages lower and helped prevent some American companies from moving their operations abroad.