WASHINGTON (States Newsroom) — The unprecedented increase in immigration starting in 2021 brought extra revenue to states and local governments, but the cost of services for those newly arrived migrants was greater, leading to a net cost of $9.2 billion in 2023, according to a report the nonpartisan Congressional Budget Office published Thursday.
The roughly 4.3 million immigrants who arrived from 2021 to 2023 paid about $10.1 billion in state and local taxes in 2023, according to the report. Accounting for births and deaths, the net population gain from immigration in those years was about 4.4 million, CBO said.
Across the country, state and local governments spent about $19.3 billion in goods and services for those immigrants, with costs concentrated on providing education and shelter, CBO estimated.
The $9.2 billion direct net cost amounts to 0.3% of state and local spending, CBO said.
“State and local governments saw both their tax revenues and their spending increase in 2023 as a result of the surge in immigration,” the CBO report said. “In CBO’s estimation, the increase in spending was greater than the increase in taxes.”
In an alternative calculation, CBO estimated that when accounting for indirect effects — for example, increases in property taxes and economic activity, greater demand for government services — the surge led to a spending increase of $28.6 billion and increased revenue of $18.8 billion for state and local governments, netting a loss of roughly $9.8 billion.
More than half of newly arrived immigrants resided in six states: California, Florida, Illinois, New Jersey, New York and Texas.
CBO estimated that in 2023, about 550,000 children in public schools, or 1.1% of students, were immigrants who’d arrived since 2021.
“In CBO’s estimation, the surge in immigration directly increased spending for public primary and secondary education by $5.7 billion, or 0.7 percent, in 2023,” according to the report.
Those higher costs were “due to lower English proficiency among the surge population.”
“Because recent immigrants are often English-language learners, they tend to need additional instructional and support services,” according to the report. “CBO estimates that those services cost state and local governments $1.2 billion in 2023.”
Another high cost was shelter services, CBO found. Four states — New York, Massachusetts, Illinois, and Colorado — “spent a total of $3.3 billion to provide shelter and related services, including food and legal support, to the surge population in 2023,” according to the report.
In 2021, the Biden administration dealt with the highest levels of migration at the southern border in 20 years. In an effort to ease the increase at the U.S.-Mexico border, several programs were created to allow migrants to obtain work permits or enter the country while their asylum cases were pending before immigration court.
A nonpartisan New York think tank that studies domestic and international migration, the Center for Migration Studies, released a report that found the population of people in the United States without permanent legal status increased to by 2 million to 12.2 million by 2023, using the most recent Census Bureau American Community Survey data.
