About 60,000 immigrants in Colorado may benefit from amnesty, but costs are unknown

By Arthur Kane | Watchdog.org

President Obama’s immigration order could help about 60,000 illegal immigrants in Colorado, and though the costs to taxpayers are unknown, they could be substantial.

In the short-term, however, taxpayers could save money, a Heritage Foundation study says.

The key is when and if the immigrants, who can’t be deported, are provided taxpayer-funded benefits such as Social Security, Medicaid and Medicare, Affordable Care Act subsidies and welfare.

Obama said that won’t happen.

“It does not grant citizenship, or the right to stay here permanently, or offer the same benefits that citizens receive – only Congress can do that,” Obama told Americans last week. “All we’re saying is we’re not going to deport you.”

Robert Rector, senior Heritage Foundation fellow, said providing Social Security numbers to undocumented workers will lead to retirement and Medicare benefits, and congressional action could bring those people into means-tested benefits such as welfare, ACA subsidies and tax credits.

“Everyone gets that a person with a 10^th-grade education receives a lot more in benefits than the taxes that they pay, but even conservatives underestimate the magnitude of the costs,” said Rector, who conducted a study last year regarding how much taxpayers would spend if the immigrants are allowed to stay in the U.S. “Very few people understand how much income transfer occurs from the upper middle class to lower class people.”

Nationwide, the best guess is about 4 million (possibly 5 million) — or about 33 percent — of the 11 million to 12 million illegal immigrants estimated to be in the U.S. will benefit from the executive order. So considering the roughly 180,000 illegal immigrants — which a 2011 Pew Center study determined lived in Colorado — the number of people in the state benefiting from the Obama order is about 60,000.

Steven Camarota, director of Research for the Center for Immigration Studies, said exact state and national figures are difficult to ascertain because the people aren’t here legally.

“There’s no reason to believe the distribution will be different state by state from national figures,” he said, “but it’s really a ‘guestimate.’”

The real question is what all those newly protected immigrants will cost, which depends on a number of factors, including whether the immigrants benefiting from the order will also receive entitlement benefits.

Rector’s study shows that the average illegal-immigrant household, defined at 3.7 people, now get a net of about $14,000 in taxpayer-funded benefits more than the taxes they pay.

“In 2010, the average unlawful immigrant household received around $24,721 in government benefits and services while paying some $10,334 in taxes,” the study said, including public education, infrastructure and other services as taxpayer-funded benefits.

But the study shows non-deportation initially will lower net household benefits to about $11,000 per household each year; protected immigrants can get better paying jobs and pay more in taxes. The government will also begin collecting taxes on “under the table” cash.

But that equation flips if the immigrants qualify for benefits, such as welfare, ACA subsidies and tax credits, the study shows. The cost would be $28,000 a year per household — about $454 million a year in Colorado — if one multiplies the Heritage study household estimates by the average illegal immigrant households in Colorado.

Nationwide, the Heritage study said the immigrants benefiting from the executive order would receive $9.4 trillion benefits but pay only $3.1 trillion in taxes over their lives.

“These costs would have to be borne by already overburdened U.S. taxpayers,” the study says.

But state officials both in executive agencies and the Legislature have not calculated the costs to the state budge because it’s unclear what will happen with the executive order or any subsequent congressional action.

“We have not done any estimates or projections of this sort,” wrote Colorado Department of Health Care Policy and Financing spokesman Marc Williams in an email exchange. “As you might imagine, if we committed staff to doing estimates/projections every time a new political ‘what if’ arose out of Washington, it would be a significant drain on state resources and for little, if any, value.”

HCPF in September estimated 72 percent of Medicaid recipients, who are mostly not-fee-for-service beneficiaries, cost taxpayers an average of $2,700 a year for medical coverage. If all 60,000 Colorado legalized immigrants receive those benefits, costs would exceed $162 million annually.

Rector said it’s nearly impossible to imagine immigrants under the executive order won’t eventually receive additional benefits, as programs such as the ACA depend on full participation. Americans won’t allow people to suffer in poverty without some assistance.

“How can Congress say you can stay, but we’re not going to give you access to medical care, food stamps?” Rector said. “That’s just not going to happen.”