GAO Says Illegal Migrants Cost State $2.3 Billion : Budget: Sen. Boxer uses government figure to bolster her efforts to get federal reimbursement for California and other hard-hit states.

The General Accounting Office on Wednesday released a report estimating that California will shoulder $2.3 billion in costs during the coming fiscal year to provide education, emergency Medicaid and adult incarceration for its large population of illegal immigrants.

The study, released by Sen. Barbara Boxer (D-Calif.), estimated that the state’s undocumented population generates $1.3 billion in revenues that flow back to the U.S. Treasury.

In addition, Boxer used the report’s findings to estimate that illegal immigrants produce $900 million in state and local tax revenues. She subtracted that figure from the $2.3-billion estimate to arrive at a net cost to California of $1.4 billion for education, Medicaid and incarceration.

Boxer said she will use the study to make her case that the federal government should reimburse California and other states hit hard by the costs of dealing with illegal immigration within their borders.

“I’m very excited. We’re on very firm ground here,” Boxer said in releasing the report.

She vowed that the GAO findings--particularly the federal revenue generated by illegal immigrants--will make it easier to find congressional converts to the fight for additional reimbursement to California during next year’s budget deliberations.

“I believe the appropriate use for these revenues would be a reimbursement to the state for its uncovered costs,” she said.

Boxer would not speculate on how much money, if any, the new Republican-controlled, budget-cut-minded Congress might allocate for reimbursement funds. But she said President Clinton is sympathetic to California’s plight.

“I predict he will move toward these numbers in a very big way,” Boxer said.

Boxer will not seek the entire $1.4 billion she estimates is the state’s net cost. The federal government already supplies about $300 million for various immigrant-related programs, she said, and the political reality in Washington suggests that California would get far less than full reimbursement.

As the immigration issue has heated up in California and elsewhere, controversy has arisen over conflicting studies of the fiscal costs and benefits of illegal immigrants.

Boxer requested the GAO study in March to sort out differing views about the financial impact of illegal immigrants in California. She cautioned that the GAO “wasn’t thrilled” with the accuracy of some of the data it relied on to compile the report but said she “felt good enough so that I can run with them.”

The GAO cost figures generally back up those that Gov. Pete Wilson has used in his effort to win federal reimbursement for such state outlays. But a Wilson spokeswoman criticized Boxer’s estimate of state and local revenues as “intellectually dishonest.”

“This is a victory for California,” said Leslie Goodman, “because . . . an independent group has verified Gov. Wilson’s cost figures. But we very much disagree with (Boxer’s) tax figures. The $900 million doesn’t begin to cover the state costs for all services to illegal immigrant services.”

The GAO, rather than start from scratch, examined three existing studies of the fiscal impact of illegal immigrants--two from the state of California and one from the Urban Institute, a Washington think tank with immigration expertise.

Although it questioned some of the methodology and data sources used in all three of the earlier studies, the GAO estimate of $2.3 billion in total costs for education, Medicaid and incarceration is virtually identical to the revised figure put out by the Wilson Administration in September. The state’s January estimate was $2.43 billion for the three major cost areas.

After analyzing the data, the GAO increased the state’s cost estimates for education but reduced the costs of incarcerating illegal immigrants. The GAO accepted the state estimate of its Medicaid costs.

But on the revenue side, the GAO admitted that its findings were open to question. The report noted that researchers must use indirect estimation methods that rely on varying assumptions about the illegal immigrant population.

The GAO chose to accept the Urban Institute’s data to estimate that illegal immigrants in California generate $1.3 billion in federal revenue. But that figure falls between Wilson Administration median and high estimates, which state officials argue are probably overstated.

“As a result, there is no agreement about the magnitude of federal revenues generated by this population,” the report said.

The GAO had even greater difficulty in estimating the amount of state and local taxes generated by illegal immigrants. The state of California estimates ranged from $528 million to $1.4 billion; and Urban Institute researchers arrived at an estimate of $1.1 billion. Given this wide discrepancy, the GAO was unable to reach a conclusion.

Boxer chose to use a median estimate of $900 million during her news conference releasing the report.

Similarly, Boxer took a firmer stand on the net cost of illegal immigrants than did the GAO. “For several reasons, we were unable to draw any conclusion about California’s net cost for illegal aliens,” the GAO said.