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07/08/1992
P6/b(6)
003. letter
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Services" [partial] (1 page)
07/20/1992
P6/b(6)
COLLECTION:
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Health Care Task Force
OA/Box Number:
1227
FOLDER TITLE:
The Undocumented and the Health Care Reform Plan [7]
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30
�IMPACT OF
UNDOCUMENTED PERSONS
AND OTHER IMMIGRANTS
ON COSTS, REVENUES
AND SERVICES
IN LOS ANGELES COUNTY
A Report Prepared for
Los Angeles County Board of Supervisors
November 6, 1992
LOSAHGELESCOUHIY
�IMPACT OF UNDOCUMENTED PERSONS AND
OTHER IMMIGRANTS ON COSTS, REVENUES
AND SERVICES IN LOS ANGELES COUNTY
A Report Prepared for
Los Angeles County Board of Supervisors
November 6, 1992
LOS ANGELES COUNTY
ISD
William F. Stewart
Director
Mark Qaacoigne
Acting General Manager
R. Wayne Bannister
Head, Urban Research Section
PROJECT TEAM
Manuel Moreno-Evans
Project Director
Joyce Bbder
John Hedderson, Ph.D.
Ned Levine, Ph.D.
Nancy Mfnter Bolton, Ph.D.
loannis Pteaimissis
Sundaradevan, N.
Halil Toroe, Ph.D.
�CONTENTS
TABLES
CHARTS
FIGURES
ACKNOWLEDGEMENTS
v
vii
vii
viii
Page
EXECUTIVE SUMMARY
1
Introduction and Study Purpose
1
Major Findings
3
Demographic Estimates
3
Estimated Costs and Overall Impact
on County Services
3
Estimated Costs to School Districts
5
Estimated Revenues, Taxes and Fees to Each
Level of Government
6
Estimated Costs and Revenues at the County Level
9
Revenues Generated by the Amnesty Population
'in their Initial Five Years of Legal Status
10
Review and Report on Existing Studies
10
Inventory of the Uses of Public Housing
in the County
11
Immigration and the Underground Economy
11
Impact of a Legal Work Permit System
11
Conclusions
12
Impact of Immigrants on County Population
12
Impacts on County Costs and Revenues to All
Levels of Government
12
Impact on School Districts' Costs
13
Impact on Public Housing
13
Review of Existing Studies
13
Impact of Undocumented Persons In the Underground
Economy
14
Impact of a Legal Work Permit System
14
�Chapter
I.
IMMIGRATION INTO LOS ANGELES COUNTY
Findings
,
Definitions of the Three Immigrant Groups
Population Estimation Methods
Amnesty Persons
Recent Legal Immigrants
Undocumented Persons
Socioeconomic Characteristics of the Undocumented . . . .
Citizen Children of the Undocumented
Conclusions
II.
FISCAL IMPACTS OF IMMIGRATION ON
LOS ANGELES COUNTY
Estimating the Net County Cost of Public Services
Findings
Need for Information Systems on Immigrant
Sen/ice Costs
Estimated Revenues to All Levels of Government
Findings
Background
Revenue Sent to Home Country
The Revenue Model
Revenue Summary
Revenues Generated by the Amnesty Population
in their Initial Five Years of Legal Status
Conclusions
III.
IMPACT OF IMMIGRATION ON SELECTED SERVICES
Estimate of School Districts' Costs
Findings
Background
Estimation Method
Categorical Programs
Comparisons whh Previous Studies
Conclusions
Inventory of the Uses of Public Housing
Findings
Types of Public Housing
Numbers and Characteristics of Public Housing
Residents
Conclusions
-ii
15
15
15
16
17
17
18
22
22
23
29
29
29
38
38
38
43
44
45
48
56
56
58
58
58
59
62
63
64
64
65
65
65
66
67
�IV.
V.
REVIEW AND REPORT ON EXISTING STUDIES
Findings
Previous Studies on the Fiscal Impacts
of Immigrants and Undocumented Persons
Other Economic Impacts
Other Research Issues
Conclusions
68
71
73
74
IMMIGRATION RELATED ISSUES
Immigration and the Underground Economy
Findings
Background
Measuring the Underground Economy
Tax Revenue Lost
Other Implications
Conclusions
Potential Impact of a Legal Work Permit System
Findings
Background
Description of European Work Permit Systems
Lessons for the United States
Conclusions
75
75
75
75
76
76
77
78
79
79
79
79
82
85
GLOSSARY
68
68
86
APPENDIX A
88
Sources of Demographic Data
88
Immigration and Naturalization Service
88
Bureau of the Census
89
Background Studies
90
Comprehensive Adult Student Assessment
System (CASAS) Survey
90
Chavez' Survey of Undocumented in San Diego County .. 91
Heer's Study of Mothers of Mexican Ancestry
in Los Angeles County
91
NALEO's National Latino Immigrant Survey
91
�APPENDIX B
Assumptions In Calculation of Households
and Income Distributions
Amnesty Population
Undocumented Population
Recent Legal Immigrants
Rest of the Population
Assumptions In the Calculation of Taxes
Income Taxes
Social Security Taxes
Property Taxes
Lottery and Excise Taxes
Vehicle License and Registration Fees
The PICA Tax
94
94
94
95
95
98
98
99
101
104
105
107
REFERENCES
108
ATTACHMENTS
118
IV
94
�TABLES
Estimated Total Population of Los Angeles County,
January 1,1992
Table 2. Estimated Subpopulations of Los Angeles County,
January 1, 1992
Table 3. Estimated Citizen Children of Subpopulation of Los Angeles
County, January 1, 1992
Table 4. Methods of Estimating Net County Costs for Services
Provided to Subpopulation, Fiscal Year 1991-92
Table 5. Estimated Net County Costs of Services
Provided to Subpopulation, Fiscal Year 1991-92
Table 6. Estimated Percent of Net County Costs by
Subpopulation, Fiscal Year 1991-92
Table 7. Estimated Revenues by Qovemment Agencies by
Subpopulation, Fiscal Year 1991-92
Table 8. Estimated Revenues Generated to Los Angeles County by
Subpopulation, Fiscal Year 1991-92
Table 9. Estimated Revenues Generated to the State of California by
Subpopulation, Fiscal Year 1991-92
Table 10. Estimated Revenues Generated to the Federal Government by
Subpopulation. Fiscal Year 1991-92
Table 11. Estimated Revenues Generated to Other Local Entities by
Subpopulation. Fiscal Year 1991-92
Table 12. Estimated Revenues Generated by the Amnesty Population
in Los Angeles County during their Initial Five Years
of Legal Status
Table 13. Estimated Educational Expenditures by Subpopulation,
Fiscal Year 1991-92
Table A.I. TotaJ Population of Loe Angeles County
Table A.2. Estimated Subpopulations of Los Angetos County,
April 1,1990
Table A.3. Estimated Subpopulations of Los Angeles County,
January 1,1992
Table A.4. Estimated Citizen Children of Subpopulations
of Loe Angeles County. January 1,1992
Table B.I. Assumptions of Income Distribution and Household Size
Characteristics of Recent Legal Immigrants
Table 1.
25
25
25
34
35
36
50
50
51
52
52
53
60
93
93
93
93
96
�Assumptions of Income Distribution and Household Size
Characteristics of Amnesty Population
Assumptions of Income Distribution and Household Size
Table B.3.
Characteristics of Undocumented Persons
B.4. Assumptions of Income Distribution and Household Size
Table
Characteristics of All Other Persons
Table B.5 Labor Force Participation Rates Assumed in the Model
Table B.6. Proportion of Household Income Paid to Property Tax
By Age of Household Head and Income
Table B.7. Average Value of Property Tax Paid
By Household Income
Table B.8. Estimated Revenues Collected from Los Angeles County
Subpopulations by Qovemment Agency and Revenue Source,
Fiscal Year 1991-92
Table B.9. Estimated Population and Per Capita Taxes, With and
Without PICA Contribution
Table B.2.
- vl
96
97
97
101
103
104
106
107
�CHARTS
Chart 1. Estimates of Study Populations
In Los Angeles County, (January 1, 1992)
Chart 2. Estimated Net County Costs for Services Provided
By Los Angeles County, 1991-92
Chart 3. Estimated Revenues Generated to All Levels of Government
By Immigrant Population in Los Angeles County, 1991-92
Chart 4. Estimated Revenues Generated for
Los Angeles County by Subpopulations, 1991-92
Chart 5. Estimated Costs to School Districts
in Los Angeles County, 1991-92
24
37
54
55
61
FIGURES
Figure 1. The Warren and Passel Method for Estimating the
Number of Undocumented Persons
Figure 2. The Woodrow Method for Estimating the
Number of Undocumented Persons
Figure 3. Method Used in this Study to Estimate the
Undocumented Population
Figure 4. The Revenue Model
vll-
26
27
28
47
�ACKNOWLEDGEMENTS
This study was conducted by a team of researchers from the Urban Research
section of the Internal Services Department. Other County depar&nents and
agencies which contributed information to this study included the Chief
Administrative Office, Department of Children's Services, Community
Development Commission, Countywide Criminal Justice Coordination Committee,
District Attorney, Department of Health Services, Department of Mental Health,
Municipal Courts, Office of Education, Probation Department, Department of
Public Social Services, Public Defender, Public Library, Sheriff's Department, and
Superior Court. The study benefitted greatly from the diligent efforts and
experienced insights of their personnel.
Alan Nelson, former Commissioner of the U.S. Immigration and Naturalization
Service and consultant for the Federation for American Immigration Reform
(FAIR), Harry Pachon, National Director of the National Association of Latino
Elected Officials (NALEO), and Valerie Small Navarro, Immigrants' Rights Director
of the Mexican American Legal Defense and Educational Fund (MALDEF) who
were mentioned in the Board order or testified before the Board, provided
numerous useful comments and suggestions on an earlier draft of this report. We
have also benefitted from extensive consultation with several experts on
immigration, demography, and public finance. A draft version of this study was
circulated among outside organizations participating in the study, immigration
experts, and participant County departments for the purpose of obtaining written
expert testimony, Where feasible we have sought to enrich this study by
incorporating suggestions received from experts and interested parties.
Among those consulted were:
Dale Badgley
Frank Bean
John Bjerke
Leon Bouvier
Norris Clement
Bill Dominguez
Leo Estrada
Marianne Pulli Evashenk
Michael Fix
Bill Hamet
David Hayes-Bautista
David Heer
Allan Heskin
California Department of Education
Urban Institute
Immigration and Naturalization Service
Center for Immigration Studies
San Diego State University
San Diego County
University of California, Los Angeles
State Office of the Auditor General
Urban Institute
U.S. Bureau of the Census, Housing Survey
University of California, Los Angeles
University of Southern California
University of California, Los Angeles
vm -
�Elizabeth Hoag
Mike Hoefer
John Horton
Shirley-Kato
Susan Kalish
Susan Lapman
Shirley Lertzman
Greg Upton
Marta L6pez-Garza
Philip Martin
Kevin McCarthy
John Michael
Joe Nalven
Alan Nelson
David North
Paul Ong
Harry Pachon
Marcie Paolinelli
Jim Parker
Jeffrey Passel
Rita Ridenour
Elizabeth Rolph
John Rolph
Ali Saeed
Elisa Sanchez
Sandra Silva
David Simcox
Valerie Small Navarro
Georges Vernez
Jim Wilson
Karen Woodrow
Rich Zeiszler
Wendy Zimmerman
Califo.nia Department of Finance
Immigration and Naturalization Service
University of California, Los Angeles
California Department of Education
U.S. Bureau of the Census
U.S. Bureau of the Census
Grand Jury, 1991-92, Los Angeles County
City of Los Angeles
California State University, Los Angeles
University of California, Davis
The RAND Corporation
Westat, Inc.
San Diego State University
Federation for American Immigration Reform
TransCentury Development Associates
University of California, Los Angeles
National Association of Latino Elected Officials
Price Waterhouse
Office of Education, Los Angeles County
Urtan Institute
Office of Education, Los Angeles County
The RAND Corporation
The RAND Corporation
California Community Colleges
County of San Diego
California Department of Education
Center for Immigration Studies
Mexican American Legal Defense and Educational
Fund
The RAND Corporation
California Department of Education
U.S. Bureau of the Census
California Department of Education
Urban Institute
Without implying that they endorse the final product, we would like to express
appreciation for their assistance.
- ix
�EXECUTIVE SUMMARY
Introduction and Study Purpose
On December 3, 1991, the Los Angeles County Board of Supervisors adopted a
motion instructing that a comprehensive study be conducted on the impact of
immigration on the County (Attachment A). The Board order directed that the study
include the following:
•
Estimated costs and overall Impact on County services
•
Estimated revenues, taxes and fees to all levels of government
•
Revenues generated by amnesty persons during their initial five
years of legal status
•
Review and report on existing studies on the economic and fiscal
Impact of undocumented persons
•
Estimated costs to school districts
•
Potential Impact of the underground economy
•
Impact of a legal work permit system
•
Inventory of the uses of public housing In the County
The Board order specified that cost and revenue estimates be developed for the
following subpopulations:
•
Recent legal Immigrants
•
Amnesty persons
•
Undocumented persona
•
Citizen children of undocumented persons
�Executrve Summary
The scope of this study is limited to providing information requested in the Board
order, and therefore it omits certain issues. We include only immigrant related costs
bome by the County of Los Angeles. Other local, State and Federal government
costs are omitted. Some questions could not be answered because of inadequate
data or the lack of an agreed upon research method. Thus, for example, we do not
include an investigation of revenue generated from businesses owned by immigrant
entrepreneurs and businesses frequented by immigrants. The study is also limited
to those population categories specified by the Board order. Our research on the
fiscal impact of immigration on Los Angeles County has been limited to estimating the
costs and revenues in fiscal year 1991-92. This caveat is especially important since
the study represents a snapshot analysis of the fiscal impact of immigrants and
therefore does not address the long term impacts of immigration.
While this study addresses a number of complex questions concerning immigrants
in Los Angeles County, we do not address the empirical question of costs and
benefits of immigrants to the larger society and economy of Los Angeles County.
Finally, consistent with the Board assignment the report does not include policy
recommendations and actions. Despite these limits, we hope that by furthering our
knowledge of the fiscal impacts of immigration on County government the report will
provide valuable information to policy makers.
In the following chapters we present the evidence supporting our findings. Chapter
I describes the demographic profile of recent immigrants in Los Angeles County.
Chapter II examines the fiscal Impact of undocumented persons and other immigrants
on County costs, revenues, and servicee in fiscal year 1991-92. Chapter III evaluates
the impact of immigration on selected public services. In Chapter IV we summarize
existing studies on the economic and fiscal impact of immigrants and discuss other
research related issues. Finally, Chapter V examines the question of the impact of
immigration and the underground economy, and concludes with a review of the
potential impact of a legal work permit system in Los Angeles County.
�Executive Summary
MAJOR FINDINGS
In this section we summarize the major findings of this study.
Demographic Estimates
Our estimates of the size of the three immigrant groups (recent legal immigrants,
amnesty persons, and undocumented persons), the citizen children of the
undocumented persons, and the rest of the population in Los Angeles County as of
January 1, 1992 were as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
Citizen Children of Undocumented
630,000
720,000
700,000
250,000
6.9%
7.8 /b
7.6%
2.7%
SUBTOTAL
2,300,000
25.0%
Rest of the Population
6,890,000
75.0%
TOTAL
9,190,000
100%
0
• The three immigrant groups (recent immigrants here legally under Federal law,
persons granted Amnesty by the Federal Qovemment and undocumented
persons) and the citizen children of undocumented persons make up 25% of the
County's total population.
in addition to the three immigrant groups who are the subject of this study, the
County has an additional 1.1 million foreign-bom residents comprising of legal
immigrants who entered the country before 1980 and persons on temporary nonimmigrant visas (e.g., student and temporary work permits) who entered after 1980.
Estimated Costs and Overall Impact on County Services
The net County costs reflect the County's gross costs less any offsetting revenue
from State and Federal sources and other program income, such as ussr fees, and
fine or forfeiture revenuee, which are counted as departmental revenue in the County
Budget Intergovernmental transfers, therefore, have been taken into account in the
analysis. Costs to other local, State and Federal governments are not analyzed in
this study because they were beyond the scope of the Board order. Revenues, taxes
and fees generated to all levels of government however, are estimated. Therefore,
this must be taken into account when comparing total costs with total revenues.
�Executrve Summary
Net County costs for the three immigrant groups and citizen children of
undocumented persons compared to the rest of the population in..1991 -92 were
estimated as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
Citizen Children of
Undocumented Persons
$352,276,000
$194,450,000
$308,398,000
11.5 /o
6.3%
10.1%
$91,581,000
3.0%
SUBTOTAL
$946,705,000
30.9%
Rest of the Population
$2,123,290,000
69.1%
TOTAL
$3,069,995,000
100%
0
• The net costs to the County of providing services to the three Immigrant
groups (recent Immigrants here legally under Federal law, persons granted
amnesty by the Federal government, and undocumented persons) and to
citizen children of undocumented persona In 1991-92 were estimated to be
$947 million and represent 30.9% of total net County costs.
• Altogether the three immigrant groups and citizen children of undocumented
persons roughly accounted for $365 million (68%) of net County costs for the
Department of Health Services; $351 million (23%) of net County costs for
justice-related departments; $102 million (21%) of net County costs for the
Department of Public Social Services; and $5.5 million (16%) of net County
costs for the Department of Mental Health.
• Recent legal immigrants account for $84.8 million (83%) of the Department of
Public Social Services' cost for the immigrant groups being studied.
• All immigrants tend to use health services at a higher rats than the general
population, but utilize mental health and children's servicee at a lower rate.
• The roughly $159 million (52%) In net County costs for health services and $62
million (20%) m net County coststorjustice-related services together accounted
for about 72% of the County'stotalunreimbursed costs for services provided to
undocumented persons.
A complete summary of all net County coststorthe delivery of public servicee to the
study groups and the rest of the County's population is included In Table 5 on page
35.
�Executive Summary
Estimated Revenues, Taxes and Fees to Each Level of Government
Revenues, taxes, and fees paid directly to each level of government were estimated
for the three immigrant groups (recent legal immigrants, amnesty persons, and
undocumented persons) and the rest of the population of Los Angeles County. The
estimates presented are only for revenues collected from individual households and
do not count revenues collected by each level of government from immigrant owned
and non-immigrant owned businesses or other governmental entities. Therefore, not
all revenues are fully accounted for.
The estimated revenues included: federal income tax, state income tax, social
security taxes, unemployment insurance tax, property taxes, vehicle license and
registration fees, sales tax, gasoline taxes, excise taxes, and state lottery revenues.
A complete summary of these revenues is included in Appendix B, Table B.8 on page
106.
Revenues Generated to All Levels of Government
The total revenues to ail levels of government generated by the three immigrant
groups and the rest of the County's population in 1991-92 were as follows:
Recent LsgaJ Immigrants
Amnesty Persons
Undocunentad Persons
$1,887,800,000
$1,540,600,000
$904,100,000
3.8%
3.1%
1.8%
SUBTOTAL
$4,332,500,000
8.7%
Rest of the Population
$44,675,800,000
91.3%
TOTAL
$49,206,300,000
100%
Altogether revenues generated by the three Immigrant groups to all levels
of government In 1991-92 were estimated to be $4.3 Mlllon, or 8.7%, of the
$49.2 Mlllon In revenues collected from all households In Los Angeles
County.
-6
�Executive Summary
Estimated Costs to School Districts
This study estimated costs to school districts in Los Angeles County (which are
separate government entities from the County government) for the three immigrant
groups and the citizen children of undocumented persons compared to the rest of the
population. Overall, an estimated 61% of school districts' funding came from State
funds, 2% from lottery funds, 21% from local property tax levies, 8% from federal
funds and 9% from other local sources. The estimated cost per pupil averaged
$4,480 in Los Angeles County in 1991-92.
The estimated costs for the study populations compared to the rest of the population
in 1991-92 were as follows:
Recent Legal Immigrant Children
Amnesty Children
Undocumented Children
Citizen Children of
Undocumented Persons
$331,100,000
$123,500,000
$367,900,000
5.1%
1.9%
5.7%
$662,300,000
10.3%
SUBTOTAL
$1,484,800,000
23.0%
All other children
$4,972,700,000
77.0%
TOTAL
$6,457,500,000
100%
• Educational costs for the three Immigrant groups (recent Immigrants here
legally under Federal law, persons granted amnesty by the Federal
government, and undocumented persons) and citizen children of
undocumented persons account for $1.5 billion (23%) of total costs In Los
Angeles County school districts.
�Executrve Summgry
Revenues Generated bv the Immigrant Groups to Each Level of Government
The revenues generated by the three immigrant groups to each level of government
in 1991-92 were as follows:
County
State
Federal
Other Local
$139,100,000
$1,237,300,000
$2,599,600,000
$356,600,000
3.2%
28.6%
60 0%
8.2%
Total
$4,332,500,000
100%
• The Federal government receives the largest share of revenues, and the
County receives the least
• Of the $4.3 billion revenues generated by the three immigrant groups (recent
legal immigrants, amnesty persons, and undocumented persons) in 1991-92,
about $2.6 biltion (60%) went to the Federal government $1.2 billion (29%) to
the State government, $357 million (8%) to other local entities, and $139 million
(3%) to the County of Los Angeles.
Revenues Generatedtothe Countv of Los Anqeies
The breakdown of the revenues collected by the County from the three immigrant
groups and the rest of the County's population in 1991 -92 were estimated as follows:
Recent Legal Immigranta
Amnesty Persons
Undocumented Persons
$ 56,800,000
$ 47,1
TO,000
$ 36,200,000
4.0%
3.4%
2.6%
SUBTOTAL
$139,100,000
10.0%
Rest of the Populatfon
$1,257,900,000
90.0%
TOTAL
$1,397,000,000
100%
• Ail three immigrant groups generated about $139 million (10%) of revenues to
Loe Angeles County in the year studied, while about $1.25 billion (90%) of the
revenue was generated by the rest of the population.
Table 8 on page 50 showsrevenuesgenerated by immigrants to the County of Los
Angeles in the year studied. These estimates suggsst ths following:
• Altogether the three immigrant groupe accountedtorabout $134 million (10%)
of County property taxrevenuesand about $5 million (15%) of County sales tax
revenues.
-7
�Executive Summary
Revenues Generated to the State of California
The State revenues generated by each immigrant group and the rest of the
population in 1991-92 were as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
$486,500,000
$451,100,000
$299,700,000
4.1%
3.8%
2.5%
$1,237,300,000
10.4%
Rest of the Population
$10,704 7X,000
89.6%
TOTAL
$11,942,000,000
100%
SUBTOTAL
<
• The three immigrant groups together generated about 10% (or $1.2 billion) of
the total revenue generated by Los Angeles County residents to the State of
California.
• Altogether the three Immigrant groups generate about nine times more
revenue to the State of California than to the County of Loe Angeles.
Revenues Generated to the Federal Qovemment
Federal revenuee generated by immigrant groups and the rest of the County's
population in 1991-92 were as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumentad Persons
$ 1,212,600,000
$909,700,000
$477,300,000
3.7%
2.6%
1.4%
$2,599,600,000
7.9%
Rest of the Popiiation
$30,375,600,000
92.1%
TOTAL
$32,975,400,000
100%
SUBTOTAL
• The three immigrant groups together generated about 8% (or $2.6 billion) of the
tota) revenue generated by County residents to the Federal government
• Altogether the three Immigrant groups generate about eighteen times
more revenue to the Federal government than to the County of Los
Angeles.
8
�Executive Summery
Revenues Generated to Other Local Entities
Other revenues were generated to local governmental entities in Los Angeles County,
such as cities and school districts. The revenues generated to local governmental
entities other than the County of Los Angeles by the three immigrant groups
compared to the rest of the County's population in 1991-92 were as follows:
0
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
$133,000,000
$132,700,000
$90,900,000
4.6 /o
4.6 /o
3.1%
SUBTOTAL
$356,600,000
12.3%
Rest of the Population
$2,537,500,000
87.7%
TOTAL
$2,894,100,000
100%
0
• The three immigrant groups together generated $357 million (12%) of total local
revenues in the fiscal year 1991-92.
• Altogether the three Immigrant groups generate about two and one-half
times more revenue to other local government entitles than to the County
of Los Angeles.
Estimated Costs and Revenues at the County Level
The estimated net County costs for services provided to recent legal immigrants,
amnesty persons, undocumented persons and their citizen children exceeded
estimated County revenues generated from them in fiscal year 1991-92, as shown
below. When comparing net County costs withrevenues.It should be noted that
revenues paid by busineesee were not counted.
• Nat County ooets experteooed:
$946,706,000
• County revenuea generated:
$139,100,000
• Dtflsrance:
$807,606,000
• Net County costs for services provided to ths three immigrant groups
(recent Immigrants hers legally under Federal law, persons granted
amnesty by ths Federal government, and undocumented persons) and
citizen children of undocumented persons exceeded County revenues
from them by $807.6 million.
-9
�Executive Summary
Revenues Generated by the Amnesty Population In their Initial Five Years o
Legal Status
The estimated revenues generated by the amnesty population in Los Angeles County
during the first five years of their legal status were as follows:
County
State
Federal
Other Local
$218,000,000
$2,088,500,000
$4,211,700,000
$614,400,000
3.1%
29.3%
59.0%
8.6%
Total
$7,132,600,000
100%
During their first five years of legal status under Federal law while they were
ineligible for most Federal pubiic assistance benefits, amnesty persons
generated about $7.1 billion in revenues to all levels of government of which
59% ($4.2 billion) went to the Federal government
Review and Report on Existing Studies
Existing studies on the economic and fiscal impact of undocumented persons are
discussed in Chapter IV of this report These include research from the RAND
Corporation and the Urtan Institute, as well as other pertinent studies.
• While these studies provided useful background information, they did not
specifically answer the questions about the impacts of immigrants in Los
Angeles County, as defined in the Board order, and were generally conducted
before the Immigration Reform and Control Act of 1986 was fully implemented.
• Most of the studies suggest that Immigration has not had a significant impact
on the employment of native workers.
• Existing studies have found evidence of wage depression attributable to
immigrants. However, the reeearch indicates that immigrants mainly tend to
depress wage levels in industries where immigrant workers are heavily
concentrated.
• Studies have shown that ths skills and earnings of recent immigrants are below
the skills and earnings of earUer immigrants.
• Some economists argue that immigrants, especially through their ownership of
small businesses, expand the economy and contribute to the growth of the
region.
-10
�Executive Summary
Inventory of the Uses of Public Housing In the County
• Public housing provided to low income persons is federally funded with no
County share of costs.
• Actual data on the use of public housing by immigrants are not collected.
However, the seif-reported rate of use of public housing by undocumented and
amnesty persons has been found to be low in surveys of these persons.
Immigration and the Underground Economy
• Our review of the literature found only a few studies estimating the participation
of undocumented persons in the underground economy at the national level,
and found no studies at the County level.
• Research studies have given a broad range of estimates for income taxes
withheld from undocumented workers; nationwide these estimates have
averaged 56%.
• A 1979 Internal Revenue Service (IRS) study has shown that nationwide the
revenue loss from undocumented persons has been between 1.1% and 1.5%
of the total income tax revenue losses from all persons due to the underground
economy.
Impact of a Legal Work Permit System
• Our review of the literature found no studies directly dealing with the impact a
legal work permit system would have on Los Angeles County.
• Studies evaluating the European experience with guest worker programs are
inconclusive regarding what their impacts would be if implemented in the United
Statee.
• Foreign workers with legal work permits In Europe constitute 10% to 20% of the
total labor force.
11
�Executrve Summary
CONCLUSIONS
The major conclusions of the study are summarized in this section.
Impact of Immigrants on County Population
• Based on our demographic estimates, the three immigrant groups (recent
immigrants here legally under Federal law, persons granted amnesty by the
Federal government, and undocumented persons) and the citizen children of
undocumented persons accounted for about 25% (or 2,300,000) of the total
population in Los Angeles County as of January 1, 1992.
Impacts on County Costs and Revenues to All Levels of Government
• Los Angeles County bears a disproportionately high cost for serving
Immigrants who are In this country aa a result of Federal laws and/or
policies and decisions, while most tax revenues collected from Immigrants
go to the Federal government. Both previous research and this study indicate
that the gap between the costs of services and the revenues generated by
immigrants creates a special problem for counties with large and reiativeiy poor
immigrant populations.
• The estimated net County costs of providing services to the three immigrant
groups (recent legal immigrants, amnesty persons, and undocumented persons)
and to citizen children of undocumented persons in 1991-92 were about $947
million, while the estimated revenues, taxes and fees generated by them to the
County of Los Angeles were $139 million, resulting in a net deficit of about $808
million.
• The net County costs exceeded County revenues for each of the immigrant
groups being studied.
• The three immigrant groups and ths citizen children of undocumented persons'
share of total net County costs was 31%, which exceeds both their 25% share
of the County's population and 10% share of total County revenues.
• The three immigrant groupe and citizen children of undocumented persons have
the greatest impact on the County health servicee, accounting for about 68% of
total net County costs for health services.
• The three immigrant groups contributed in revenue roughly $4.3 billion to all
levels of government in Los Angeles County in 1991-92.
-12
�Execufive Summary
• The three immigrant groups being studied account for 25% of the County's
population, but about 12% of total revenues to other local governmental entities,
10% of total revenues to the State of California, and 8% of total revenues to the
Federal government. The lower tax revenues generated from immigrants
relative to the native population reflects their lower average incomes. The
amount of taxes paid by persons was highly correlated to their income level.
• The three Immigrant groups together generate eighteen times more
revenue to the Federal government, nine times more revenue to the State
of California, and about two and one-half times more revenue to other
local government entitles than to the County of Los Angeles.
• Recent legal immigrants generate more tax revenues than amnesty persons
who, in turn, generate more revenue than undocumented persons.
• During their first five years of Federal legal status, amnesty persons generated
about $7 billion in revenues to all levels of government of which 59.0% went to
the Federal government 29.3% to the State of California, 8.6% to other
governmental agencies, and only 3.1% to the County of Loe Angeles.
Impact on School Districts' Costs
• The estimated education costs for undocumented children, citizen children of
undocumented persons, amnesty children and recent legal immigrant children
accounted for 23% (or $1.5 billion) of total school district costs in Los Angeles
County.
Impact on Public Housing
• Public housing is not a cost to the County government because the programs
are federally funded. The rate of use of government housing assistance by
undocumented persons and amnesty persons is less than that of the total
population based on surveys of such persons.
Review of Existing Studies
• No existing study answers the research questions about the impacts of
immigrants in Loe Angeles County, as defined in the Board order. Most of the
studies have found no evidence to show that immigrants displace native
workers. However, there is evidence for wage depression attributable to
immigrants, particularly In industries where immigrant workers are heavily
13
�Executive Summary
concentrated. The skills and earnings of recent immigrants have been found
to be lower than the skills and earnings of earlier immigrants. Some economists
argue that immigrants, especially through ownership of small businesses,
expand the economy and contribute to the growth of the region.
Impact of Undocumented Persons In the Underground Economy
• Only a few studies estimated the participation of undocumented persons in the
underground economy at the national level, and none at the County level.
Based on national studies, undocumented persons appear to be more likely to
be employed at jobs where income is not reported, but these also tend to be
low paying jobs where the tax rate and revenue loss is also low. The impact
in Los Angeles County, however, may differ from the nation as a whole.
Impact of a Legal Work Permit System
• The impact of a legal work permit system on Los Angeles County is uncertain
and would largely depend on the specific design and scale of the system and
economic conditions during implementation.
-14
�Chapter I. IMMIGRATION INTO LOS ANGELES COUNTY
Findings
Our estimates of the size of the three immigrant groups (recent legal immigrants,
amnesty persons, and undocumented persons), the citizen children of the
undocumented persons, and the rest of the population in Los Angeles County as of
January 1, 1992 were as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
Citizen Children of Undocumented
630,000
720,000
700,000
250,000
6.9%
7.8%
7.6%
2.7%
SUBTOTAL
2,300,000
25.0%
Rest of the Population
6,890,000
75.0%
TOTAL
9,190,000
100%
• 777© three immigrant groups (recent immigrants here legally under Federal law,
persons granted amnesty by the Federal government, and undocumented
persons) and the citizen children of undocumented persons make up 25% of the
County's total population.
There also are an estimated 1,110,000 "other foreign-bom residents" comprised of
pre-1980 legal immigrants and persons on temporary non-immigrant resident visas
(e.g., students and temporary workers) who entered the country after 1980. This
study does not address the Impact of the "other foreign-bom," however, we show an
estimate for them in the tables to facilitate comparisons with 1990 Census data and
to give a perspective on the three immigrant groupe' populations relative to the total
number of foreign-bom.
There is a great deal of uncertainty concerning the number and characteristics of
foreign-bom persons in Los Angeles County, sspedally the undocumented
population, because limited actual data exists. The estimates need to be used with
an awareness of their sources and limitations.
Definition of the Three Immigrant Groups
For the purpose of this research the working definitions of the groupe studied were:
Undocumented persons: Foreign-bom persons who are not in the country under a
lawful immigration status and who are not permanently residing In the United States
under color of law (PRUCOL).
15
�Chapter I
Immigrabon into Los Angeles County
Citizen children of the undocumented: Children under the age of 18 bom in the
United States whose mothers are undocumented persons.
Recent legal immigrants: Foreign-bom persons who entered the United States since
April 1, 1980 who were lawfully admitted for permanent residence by the Federal
government or who are permanently residing in the United States under color of law
(PRUCOL). Persons who have nonimmigrant visas (e.g., tourists, students, and
businessmen) are excluded from this category.
Amnesty persons: Former undocumented persons who were granted lawful
immigration status by the Federal government under Section 245A and Section 210
of the Immigration Reform and Control Act (IRCA) of 1986. To qualify under Section
245A, "pre- 982 immigrants" had to demonstrate continuous residence in the United
States since prior to January 1, 1982. To qualify under Section 210, "special
agricultural workers" (SAWs) had to demonstrate employment in agriculture in the
U.S. for at least 90 days between May 1,1985 and May 1,1986.
1
These immigrant group definitions are not legal definitions and the cost and revenue
data do not always correspond exactly to the immigrant groups.
Population Estimation Methods
The greatest obstacle in the reeearch was the absence of databases that contain
sufficient information on immigrants. A second difficulty was that immigrants do not
neatly fall into discrete statistical categories. For example, a person's legal status
could change from undocumented to temporary resident to permanent resident over
a period of years. It is noteworthy that as of January 1992, about 720,000
undocumented persons were granted amnesty under Federal law in Loe Angeles
County and 25,000 others have applications for legal status which are still pending
adjudication. Unavoidably, the estimates were rough approximations, and the nature
of the data and the analytical categories precluded the calculation of statistical
confidence intervals.
We began this project with parallel efforts to review previous immigration research
and to search for appropriate data sources. During this process we consulted with
federal, state and local agencies, as well as County departments. We also had
meetings and phone conversations with government academic and private sector
experts concerning demographic data on immigrants.
The general approach employed was to estimate the immigrant group populations as
of the 1990 Census and then project them forward to January 1,1992. An exception
was the amnesty population for which a special tabulation was done by the
Inrvnigration and Naturalization Service (INS) for Los Angeles County as of February
16
�Chapter I
Immigration into Los Angeles County
1992. The population estimates for 1992 are given in Chart 1 and Tables 1 through
3 at the end of this chapter. A technical description of the 1990 population estimates
is given in Appendix A.
The Bureau of the Census and the INS were the primary sources of data used in our
estimates. These were compared, however, to other surveys to help assess the
validity of the analysis. A description of the data sources is presented in Appendix
A.
The following sections describe the estimation methods used for each immigrant
group.
Amnesty Persons
For the number of amnesty persons we used a special tabulation done for Los
Angeles County by the INS based on their files, which includes the place of residence
of amnesty persons, as of February 13, 1992. Persons whose applications were
denied, closed, or pending were not included in the total. The INS file is updated for
reported migration and mortality. The number of amnesty persons in the County was
about 720,000.
We estimated the socioeconomic characteristics of the amnesty persons by using a
Los Angeles County subsampie of 2,129 persona from a survey done for INS by
Westat Inc. The sample was of amnesty persons who applied under the provisions
of having resided in the United States since before January 1,1962.
Recent Legal Immigrants
The number of legal immigrants since 1980 was obtained from the California
Department of Finance (DOF), Demographic Research Unit tables which summarized
data from the INS and the Office of Refugee Resettlement These tabulations were
adjusted by DOF for emigration from this category during the 1980s at an annual rate
of 12,000. DOF also made adjustments for net internal migration of refugees into Los
Angeles County which totaled 20,000 for the 19808. Theee data were for April 1,
1980 to April 1,1990 and were projected to January 1,1992 using average change
rates from the 1980s.
The socioeconomic characteristics of the recent legal Immigrants were estimated from
INS files and samples of 1,010 foreign-bom Los Angeles County residents taken from
the November 1989 Current Population Survey, and 1,500 foreign-bom Loe Angeles
County residents taken from the 1985 American Housing Survey.
17
�Chapter I
Immigration into Los Angeles County
Undocumented Persons
In its censuses and surveys the Bureau of the Census does not ask respondents
directly about their immigration status. This policy is intended to encourage full
participation by protecting the respondents. It is also unlikely that people would
readily admit to being in the country illegally. Researchers, therefore, have used
indirect techniques to estimate the number of undocumented residents.
Heer (1990) reviewed methods that have been used to estimate undocumented
immigration. The middle estimates in these studies for the number of undocumented
residents in the United States in 1980 or before, ranged from 1 to 5 million. One
method looked for unusual patterns in income tax returns, social security payroll
taxes, and social security benefits that could be explained by the presence of a
certain size undocumented population (Lancaster and Scheuren, 1977).
In other research, abnormalities in demographic statistics such as death rates
(Robinson, 1980) and sex ratios (Bean, King and Passel, 1983) have been used as
indicators.
Another approach was to compare age-sex cohorts in Mexico from one census to
another for signs of emigration (Goldberg, 1975).
Estimates have also been made based on the number of apprehensions of
undocumented persons and assumptions about the proportion who are not
apprehended (Leeko Associates, 1975).
Juan Diez-CaAedo (1980) made estimates for 1975 from remittances of postal or
money orders to Mexico.
The Centra Nadonai de Informadon y Estadlstlcas del Trabajo (CENIET) of the
Mexican government conducted a survey in 1978-79 to eetimate the number of
habitualresidentsof Mexico who worked seasonally in the United States.
More recently, Warren and Passel (1987) used citizenship, place of birth, and legal
immigrant registration data to eetimate the number of undocumented persona counted
in the 1980 Census.
The consensus In discussions with demographers was that a method similar to
Warren and Passel's would provide the best estimate for Los Angeles County, and
it is the approach we adopted.
The choice of method selected for our research was constrained by several factors.
National level data might not apply to Los Angeles County. Field surveys were
precluded by cost and time considerations. Similarly, there was not the time and
18
�Chapter I
^
Immigration into Los Angeles County
resources available to conduct and validate population estimates made through
original analyses of administrative records such as birth certificates, death certificates
or tax returns.
Estimates based on apprehensions of undocumented persons, the most obvious
alternative, would appear to have serious limitations. Apprehension rates are
affected by changes in immigration law enforcement programs. Apprehensions would
also not distinguish as well between transient undocumented persons and those who
had taken up residence in the County. Indeed one might expect that the longer term
undocumented residents, who are more likely to pay revenue and utilize services,
would have a lower apprehension rate.
The Warren and Passel method also has limitations. People who are not counted in
the census are missed. The undercount is disproportionately high for minorities and
persons who are young, single, male and geographically mobile. A higher than
average percentage of the undocumented are in these categories which we expect
to have a high undercount rates. In addition, they are undocumented and may be
leery of Census takers, despite assurances in public campaigns that the information
they provide will be kept confidential. Despite theee problems, a method based on
this approach appeared to be our best option. Whatfollowsis a description of the
Warren and Passel method, a description of how it has been updated and finally a
description of how it was it was modifiedforthe needs of this study.
At thetimeof the 1960 Census documented non-citizen residents were required to
register their addresses annually with INS. Wansn and Passei (1987) estimated the
number of undocumented reekJents counted in the 1980 Census by subtracting the
number of non-citizen reekjents registerBd with INSfromthetotalnumber of noncitizen residents counted. This method is iustrated in Figure 1 on page 26.
TWO iMoomemt • (HonCKhm
• (*»\*m iif Hencmen *mu\U)
(i)
Adjustments needed to be madetorundsr-reglstratton of docunented non-dtlzen
residents and falsereportingof dtfzsnship. Warren and Paassl ssdmated that for
January 1980 overaB under-registratton by non-qWzen residents had been 11.1% and
for the Meodcan-bom population It had been 7.3%. Correction for false reporting of
naturalization was 12% overall and 21%torthe Mexican-bom population. A further
adjustmentforfalsereportingof U.S. nativity increased the Meodcan-bom population
estimate by 8.8%. Tha final ssdmata was that approximately 2.1 mUlion
undocumented reeidents were counted In tha 1960 Census.
The most recent work to update the Warren and Passel estimates at the national
level was done by Karen Woodrow (1991). It Is Importanttoour study because it
addresses the question of how much net migration of undocumented persons has
19
�Chapter I
^
Immigration into Los Angeles County
occurred since 1980. Woodrow used the Bureau of the Census' Current Population
Survey (CPS) data to compare the increase in the foreign-bom population to legal
immigration. From the difference she derived the change in the number of
undocumented residents. The Warren and Passel estimate of the 1980 legally
resident foreign-bom was her beginning point from which to estimate this population
for later years. The differences between the foreign-bom populations estimated from
three Current Population Surveys and her estimates of the legally resident foreignbom were her estimate of the number of undocumented residents for 1986, 1988,
and 1989. This method is illustrated in Figure 2 on page 27.
Undocumented Pinons (CPS Non-Cltien PopUation Eattmama) (2)
minua (1980 Lap* imrnpvn Estimate)
minua (Legal Immigration Since 1980)
Woodrow's estimates were adjusted for false reporting of citizenship, false reporting
of nativity, the amnesty program, mortality, immigration and emigration. The CPS
consistently showed more foreign-bom residents than could be expected from legal
immigration. Woodrow estimated that the undocumented population reached 3.2
million in 1986, however, it declined to 1.6 million in her middle estimate for 1989
because of the amnesty program. There was a wide range in her estimates that
depended upon assumptions concerning Special Agricultural Worker amnesty
persons. They do not have to reside in the United States to retain their amnesty
status, and if one overestimates the number of Special Agricultural Workers, one
underestimates the number of undocumented.
*
The starting point of our estimate of the number of undocumented in Los Angeles
County was a special study of Loe Angeles County by the Bureau of the Census that
used the Warren and Passel method of comparing non-citizens counted in the 1980
Census to the number of non-citizen residents registered at that time by the
Immigration and Naturalization Service (Woodrow, 1986). The 1980 count of
undocumented residents in Los Angeles County was calculated to be 658,000.
The net migration of undocumented into Loe Angeles County during the 1980s was
estimated by DOF to be 643,000 persons. This was calculated from the Bureau's
middle estimate of annual net migration of undocumented persons (200,000) and the
proportion of the national total of undocumented counted in the 1980 Census who
resided in Loe Angeles County. This national level net migration estimate, while
uncertain, Is supported by the work of Woodrow cited above. Adjusting for the
number wtw changed their statia through the am
number of undocumented persons In Los Angeles County at ths time of the 1990
Census was approximateiy 583.000. This method is illustrated in Figure 3 on page
28.
1900 LAW Undooumented Pvaona •
(IM lACO Undoeummd Penone)
pkm (mUQntonoflACOUndocumimdPanom
mtm (IACO Amneety Pateona)
20
fl)
�Chapter I
Immigration into Los Angeles County
This estimate reiies on evidence that many undocumented persons were counted in
the 1980 Census and that the net-immigration of undocumented persons into the
United States during the 1980s has generally followed a consistent pattern. The
estimate, however, was also checked for consistency with Woodrow's national
estimate from the 1989 Current Population Survey and with the 1990 Census count
of foreign-bom persons living in Los Angeles County.
Our 583,000 estimate for April, 1990 is 36% of Woodrow's middle estimate that
nationwide there were 1.6 million undocumented persons according to the November,
1989 Current Population Survey. This percentage is also consistent with the fact that
approximately one-third of the pre-1982 applicants in the amnesty program were from
Los Angeles County.
The 1990 Census indicated that 1.5 million of the County's foreign-bom had entered
the country since 1980. Given the estimates of net gain from documented
immigration and amnesty persons during the decade, our estimate of 583,000
undocumented residing in the County as of April 1,1990 appears to be consistent
We assumed that annual net-migration of undocumented into Los Angeles County
since April 1, 1990 was 64,000, the annual average DOF estimated for the 1980s.
Consequently, our estimate of undocumented persons for January 1, 1992 was
699,000.
The question arpee of whether to adjust for undercounting of the subgroup
populations and the total population in the 1990 Census, which outside demographers
reviewing the study agreed was not feasible at thia time. One obetade is that the
undercount adjustment factors for the 1990 Censua are not suitable for the three
immigrant groupe. There are no undercount adjustment factors for the foreign-bom
compared to the native-bom, citizens comparedtonon-citizens, end documented
residents compared to undocumented residents. A second obstacle is that our
current estimatss rely on immigration tabulations and assunptions more than they do
the 1990 Census. The older estimates of undocumented residents are based on the
1980 Census for which specific adjustment factors are not available at the County
level. The moet current estimates of the undocumented nationwide are based on the
Bureau of the Census's Current Population Survey (CPS), and we do not know how
the undercount tor the three immigrant groupe in the CPS compares to the
undercount in the Census enumeration.
Our estimate of the number of undocumented persons also errs on the low side due
to the likely undercount of undocumented persons in the 1960 Census, aa the
Census Bureau's 1980 estimate of undocumented persons in Los Angeles County
was only for those counted. Estimates of the undercount in the 1960 Census have
ranged from 15% based on the 1990 undercount estimatestoryoung Hispanic male
-21
�Chapter I
Immigration into Los Angeles County
renters to 50% based on expert judgment (Warren and Passell, 1987; and
consultation with outside demographers).
The estimate also would be affected by errors in the assumptions concerning netmigration of undocumented persons into the County since 1980. Because of the
amnesty program, most of the undocumented are likely to be persons who entered
the United States since 1980; therefore, the assumptions about migration since 1980
are crucial. We are using the Bureau of the Census's middle estimate of annual netmigration as 200,000 persons nationwide. This estimate has been consistent with the
Bureau's staffs estimates based on Current Population Surveys of increases in the
number of undocumented persons since 1980 (Woodrow, 1991).
The outside demographic experts consulted were sent preliminary estimates of the
study populations for comments. Discussions with them led to incorporating
estimates of internal migration of legal immigrants after arrival. The proportion of
undocumented and documented immigrants under the age of 18 was also increased
to correspond better with INS immigration data and recently released foreign-bom
data from the 1990 Census. Generally the demographers consulted thought that our
estimates of the number of undocumented were reasonable. They emphasized that
there was no way of knowing with precision the true* number, and that the numbers
should be used with an awareness of this uncertainty.
Socioeconomic Characteristics of the Undocumented
We estimated the socioeconomic characteristics of the undocumented primarily
through an analysis of immigrants in a sample survey of the amnesty population (for
Los Angeles County the number of cases was 2,129). The survey was
commissioned by the INS and conducted by Westat, Inc. in 1989. Only pre-1982 (I687) applicants were in the sampling frame. This excluded applicants under the
special program for agricultural workers SAW (I-700). As a surrogate for the
undocumented population, a subsampie of this survey was selected which consisted
of applicants who first entered the United Statee after 1978 (for Los Angeles County
the number of cases was 1,106). They had been in the country 8 to 10 years at the
time to this survey. Even with this selection of the more recent immigrants, our
sample is probably older and more established In general than the undocumented
population which indudee a proportion of short term immigrants who have been in the
country lees than 8 years.
Citizen Children of the Undocumented
From the Westat survey, described in the previous section, we derived that the
average number of children bom in the United States per female amnesty person
22
�Chapter I
Immigration into Los Angeles County
who had entered after 1978 was .90. This ratio was used with our estimate of
undocumented females to estimate the number of citizen children of the
undocumented. In evaluating this estimate, it needs to be remembered that the
proportion of undocumented immigrants who are married or cohabiting is lower than
average and that at this time most of them have been in the United States less than
10 years. The ratio would be expected to go up over time as the proportion in family
unions increases and the average number of years in the United States increases.
The women in this subsampie of the Westat survey had been in the United States 8
to 10 years at the time of the survey. Ten years had also elapsed from the pre-1982
entry cutoff date to our January 1, 1992 estimate. Some of the undocumented
women, however, have been in the United States much less than 10 years, while
others entered prior to 1982 and did not apply for amnesty. Nationwide, the number
of pre-1982 amnesty applicants was 15% lower than the number of undocumented
persons estimated to have been counted in the 1980 Census. We do not know the
degree of bias caused by differences between the Westat subsampie and the current
population of undocumented women.
Conclualona
• Based on our demographic estimates, the three immigrant groups (recent
immigrants here legally under Federal law, persons granted amnesty by the Federal
government and undocumented persons) and the citizen children of undocumented
persons accounted for about 25% (or 2,300,000) of the total population in Los
Angeles County as of January 1,1992.
23
�CHART 1.
ESTIMATES OF STUDY POPULATIONS
IN LOS ANGELES COUNTY (JANUARY 1, 1992)
RECENT
LEGAL
(630.000)
STUDY GROUPS
(2 3
IMMIGRANTS
6 9%
MILLION)
(26*)
i E S T OF
TM
POPULATI
6.89 M I L L I
(76%)
UNDOCUMENTED
TOTAL P O P U L A T I O N
LOS ANGELES
(9.19
COUNTY
MILLION)
PERSONS
CITIZEN CHILDREN OF
UNDOCUMENTED
PERSONS
(700.000)
(250.0OO)
7.6%
2 7%
�Chapter I
Immigration into Los Angeles County
Table 1. Ettlmttad TotaJ Population of loa Angaiea County, January 1.1902.
J M a r y 1, ltt2
Under 18
2.905.000
18-
6.682.000
TOTAL
9,187,000
TaWa 2. Eatimttad Subpopulaliana of boa Angalaa County, January 1.1992.
il
if
Under 18
:
llfl
TOTAL
47 M 0
128.000
140.000
118.000
431,000
18*
871,000
908,000
559,000
980,000
2.726,000
TOTAL
718,000
812,000
9M,000
1,108*00
3,197.000
Tabta 1 Eattnatod CMan CMdran of SubpopuMen of Loa Angatea County, January i, 1982.
301.000
228*000
2S2.000
25
498,000
1^76500
�FIGURE i. THE WARREN AND PASSEL METHOD FOR ESTIMATING
THE NUMBER OF UNDOCUMENTED PERSONS
1980 Census
Non-citizen Population
in U.S.
Registered Non-citizen
Population in U.S.
ADO
Non-response category
allocated to Foreign-born
ADJUST for misreporting of
Non-citizens as Citizens
ADJUST for
Under-registration
ADJUST for misreporting of
Foreign-bom at Native-bom
Ragatarad
Non-dtaan Population
in 1990
(B)
1980 NofH&fn
Population
(A)
SUBTRACT (8) horn (A)
UNDOCUMENTED
PERSONS
(2.1 MILLION)
UNfTED STATES
1960
�FIGURE 2: THE WOODROW METHOD FOR ESTIMATING THE NUMBER
OF UNDOCUMENTED PERSONS
1989
Current Population
Survey
Foreign-torn
Poputaton m U S.
Legally Resident
Foreign-bom
Population m U.S.
April 1980
ADO non-response category
allocated to Foreign-bom
SURVIVE to 1989 by
Life-Table methods
I
ADJUST for misreporting of
Foreign-born as Native-born
SurvNorsoflMO
LegaJfy-ReaiOtt
Population in U.S. in
1989
(8.2milBon)
(A)
Lagal tnmignnts
into U.S.
from 1980 to 1989
(tSmKon)
(B)
IRCA Amnesty
Population (1.7 m)
andSpadai
Agricultural Workars'
(0.5 mUon)
(C)
1f
SUM (A),(B).and(C)
(14.9 M)
ADJUST for Emigration
(UM)
1989
Foreign-bom Population in
U.S.
(1S2mUon)
ID)
1988 Fot9iQn4nm Population
LagaMyReaaientkiU.S.
(13.6 mmon)
m
SUBTRACT (E) frem (D)
UNDOCUMENTED
PERSONS
(1.6 MILLION)
UNfTED STATES 1989
•Woodrow's mid-ranga assumption was that aach of tha 1 milUon SpMial Agricultural Wortwrs was rasidant for six
parson-months.
�FIGURE 3. METHOD USED IN THIS STUDY TO ESTIMATE
THE UNDOCUMENTED POPULATION
Legally Resident
Foreign-born Population
in Los Angeles County
in 1980
1980 Census Foreign-bom
Population m Los Angeles
County
I
I
ADJUST for non-response and
misreporting
(A)
ADJUST for under-registration
(B)
SUBTRACT (B) from (A)
Undocumented Persons
in Los Angeles County counted in
the 1980 Census
(658.000)
I
ADD Net migration of Undocumented Person*
into Los Angeles County from 1980 to 1990
(643,000)
I
ADJUST for Undocumented Persons legalized
under IRCA Aninasty Program in
Los Angeles County
I
Undocumented Persons in
Los Angeles County in 1990
(583.000)
I
ADJUST tornet-mjgratkxiof
Undocumented Persons
from 1990to1982
I
UNDOCUMENTED
PERSONS
(699,000)
LOS ANGELES COUNTY 1992
�Chapter II. FISCAL IMPACTS OF IMMIGRATION ON LOS ANGELES COUNTY
This chapter discusses the net costs to the County of Los Angeies for services provided
to recent legal immigrants, amnesty persons, undocumented persons and the citizen
children of undocumented persons and the revenues they generate to ail levels of
government, including but not limited to the County.
Estimating the Net County Cost of Public Services
Findings
Net County costs for the three immigrant groups and citizen children of undocume
persons compared to the rest of the population in 1991-92 were estimated as follo
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
Citizen Children of
Undocumented Persons
$352,279,000
$194,450,000
$306,396,000
11.5%
6.3%
10.1%
$91,581,000
3.0%
SUBTOTAL
$946,705,000
30.9%
Rest of the Population
$2,123,290,000
69.1%
TOTAL
$3,069,995,000
100%
The net costs to the County of providing services to the three Immigr
groups (recent Immigrants here legally under Federal law, person
granted amnesty by the Federal government, and undocumented
persons) and to c/tizen children of undocumented persons In 1991*
were estimated to be $947 million and represents 30.9% of total ne
County
Altogether the three Immigrant groupe and citizen children of undocu
persons roughly accounted fon $365 million (68%) of net County costs
Department of Health Services; $351 mHBon (23%) of net County c
Justice-related departments; $102 million (21%) of net County costs
Department of Public Social Services; and $5.5 million (16%) of net C
costs for the Department of Mental Health.
Recent legal Immigrants account for $64.8 million (83%) of the Departm
Public Social Services' cost for the Immigrant groups being studied.
All Immigrants tend to use health services st a higher rate than the g
population, but utilize mental health and children's services at a lowe
29
�Chapter II
Fiscal Impacts of Immigration on Los Angeles Cou
(
•
The roughly $159 million (52%) in net County costs for health sensices a
$62 million (20%) in net County costs for justice-related services togethe
accounted for about 72% of the County's total unreimbursed costs for servi
provided to undocumented persons.
•
Recent legal immigrants and undocumented persons accounted for 24% a
30% respectively of net county costs for Health Services. On the other ha
amnesty persons accounted for only 8% of net County costs because Sta
Legalization Impact Assistance Grant funding from the Federal governm
reimburses much of the County's gross health costs.
In this section, 1991-92 estimates of the net County costs of services provided by the
County of Los Angeies to recent legal immigrants, amnesty persons, and undocumented
persons and their citizen children are compared to net County costs for services
provided to other County residents. The study did not cover an estimated 1.1 million
foreign-bom residents comprised primarily of pre-1980 legal Immigrants. Because of their
older age, longer residence in the country, and legal status these pre-1980 immigrants
would on average generate more revenue than the populations specified by the Board
order.
The net County costs of services reflect the County's gross costs less any offsetting
intergovernmental revenue from State and Federal sources and other program income,
such as user fees and fine or forfeiture revenues, which are counted as departmental
revenue in the Cpunty Budget Those offsetting revenues notably account for a high
percentage of all revenues to the County. State revenue alone accounts for about onethird and Federal revenue for one-fifth of total County revenues.
The estimated net County costs for the three immigrant groupe and the citizen children
of undocumented persons were prepared and estimated by County departments. All
direct and indirect offsetting revenues were deducted from gross costs to estimate net
costs. County departments estimated costs of their services using the actual case data
if available. The Health Servicee Department and the Mental Health Department based
their estimates on statistically valid sample surveys which were conducted to claim
Federal reimbursement for costs of servicee provided to amnesty persons.
Those departments that were unable to separate cost of servicee by immigrant
categoriee, applied the proportions of theee study groupe in the County population to
estimate these costs. This method assumed that the rate of utilization of servicee was
the same throughout the County population. Researchers such as David Hayes-Bautista
have pointed out that poor Latinos have lower utilization rates for health and social
services than other people in poverty (Hayes-Bautista et al., 1992). However, we
estimate that a higher percentage of immigrants are low income and, for those services,
actual case or survey data, not population proportions, were used by departments to
make cost estimates.
30
�Chapter II
Rscal Impacts of Immigration on Los Angeles County
For those services used only by adults or children only their population proportions were
used in the calculations. Although data from past surveys were used, no special surveys
were conducted for this study. Table 4 on page 34 summarizes the various methods
used by County departments to estimate cost of services. To ensure consistency in the
cost estimates, departments cleared their estimates with the Chief Administrative Office
(CAO) which compared them with the latest estimated actuals for fiscal year 1991-92.
With the exception of certain public assistance programs, all County residents,
regardless of their immigration status under Federal law, are eligible to receive services
from the County. Actual data on the use of County services by different categories of
immigrants are generally available only for those few services for which lawful
immigration status is a condition of program eligibility and for which automated individual
case records are maintained. It is noteworthy that many County services benefit the
population as a whole and are indivisible services which are not provided on an
individual client basis. Examples of such services include, but are not limited to, public
safety and fire protection, recreational and cultural services, public works, flood control,
roads and related services, and general government services. For all such services, the
study applied the same per capita costs for immigrants and non-immigrants alike.
The estimates of the net County costs for justice-related services provided by
departments, such as the Sheriff, Probation, District Attorney, Public Defender and
Municipal and Superior Courts, were generally based on the assumption that the
immigrant populations utilize services at the same rate as the general population in
absence of actual data. It is noteworthy that some survey data relating to criminal
deportable aliens are available from a survey conducted by the Countywide Criminal
Justice Coordination Committee (CCJCC) in cooperation with the INS. In this survey
INS determined that, in May 1990,1,933 (or 11%) of the 17,774 inmates released from
the County jail system were deportable aliens. This finding was based on their
screening of 3,327 inmates who were identified as foreign-bom.
A recent follow-up study conducted by CCJCC found that over 40% of deportable aliens
from the May 1990 study were later rearrested within 12 months and that 87% of the
rearrests occurred within Los Angeles County (Countywide Criminal Justice Coordination
Committee, 1990). The study also estimated that the annual impact of deportable aliens
on the County's criminal justice system totalled $75.2 million, assuming that 11% of net
County costs for the processing of all adult criminal cases and defendants are
attributable to deportable aliens based on the May 1990 Jail survey. That cost estimate
notably did not include any civil costs, Sheriff patrol and investigation costs, juvenile
criminal justice costs, or criminal justice costs for other adult immigrants who were not
subject to deportation under Federal law, all of which are estimated in this study.
Table 5 on page 35 summarizes the estimated net County costs for public services
provided to the three immigrant group populations and the rest of the population for fiscal
year 1991-92. Cost figures show that the estimated total net cost of County services
- 31
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
provided to the three immigrant groups and citizen children of undocumented persons
was $946,705,000 in fiscal year 1991-92. The three immigrant groups'^and the citizen
children of undocumented persons' share of the net County cost was 31%, which is
higher than their 25% share of the County's population. The share cost of the rest of
the population was 69%, which is lower than their 75% share of the County's population.
The average per capita net County costs for each of the three immigrant groups and the
rest of the population vary. The per capita net County costs of the amnesty population,
$271, is lower than the per capita net County costs of the rest of the population which
is $308. However, for recent legal immigrants and undocumented immigrants the per
capita net County costs are $557 and $441, respectively, and higher than the per capita
net County costs for the rest of the population. The per capita net County costs of citizen
children of undocumented immigrants is $388. The per capita net County costs for the
three immigrant groups and citizen children of undocumented is $414.
The differences in the average per capita costs for each group reflect a combination of
factors, including their eligibility for services, service utilization rates, and availability of
offsetting Federal or State revenue, and other program income.
This is especially true for the net County costs of services provided by the Departments
of Health Services and Public Social Services, which together account for nearly half of
the County's total net County costs on the three immigrant groups and the citizen
children of the undQcumented persons. The net County costs for health services
provided to immigrants are high primarily because they use services at a much higher
rate than the general population. The three immigrant groups and citizen children of
undocumented together account for over 60% of all County health patients, and
undocumented persons alone account for nearly one-fourth of all patients. The net
County costs for health services is also affected by the amount of offsetting
intergovernmental, self-pay, and other revenue that the County receives. For example,
amnesty persons account for nearly 15% of all County patients, but only 7.6% of net
County costs for health services because State Legalization impact Assistance Qrant
(SLIAG) funding from the Federal government reimburses much of the County's costs.
Without SLIAG funding, the net County costs for amnesty persons would be significantly
higher.
The impact of the three immigrant groups on net County costs incurred by the
Department of Social Services (DPSS) is particularly affected by the eligibility of
immigrants for public assistance and the availability of Federal and State funding. For
example, DPSS' net County costs for legal immigrants Is significantly higher than for
other immigrants because they are the only group which participates in all DPSS'
programs. The eligibility of undocumented persons and amnesty persons for public cash
assistance benefits notably are restricted under Federal and State law.
-32-
�Chapter II
^
Fiscal Impacts of Immigration on Los Angeles County
Because DPSS and DHS were not able to separate cost estimates for legal immigrants
by date of entry, their cost estimates for recent legal immigrants are .biased upward by
the inclusion of legal immigrants who entered the United States before 1980.
It is noteworthy that the Department of Pubiic Social Services' net County costs for
citizen children of undocumented persons is much lower than for recent legal immigrants
even though legal immigrants use services at a much lower rate. This is because citizen
children of undocumented persons heavily utilize Aid to Families with Dependent
Children (AFDC) benefits which are mainly financed by the Federal and State
governments, but are not served by the wholly County-funded General Relief program,
which serves indigent adults.
It is also noteworthy that, except for County-funded General Relief, public assistance
provided by DPSS is primarily funded by the Federal and State governments. In 199192, over $2.3 billion of DPSS* estimated 2.8 billion in gross costs were offset by Federal
and State revenues, leaving $478 million in remaining net County costs. In terms of the
four immigrant study populations, DPSS incurred $872 million in total gross costs, of
which $415 million were offset by Federal revenue and $355 million by State revenue,
which left $102 million in net County costs. Those intergovernmental revenues to the
County notably represented costs to Federal and State governments.
The only department that based their entire cost statistics on actual data was the
Department of Public Social Services. Since lawful immigration status is a condition of
eligibility for persons receiving cash assistance there is no County cost related to
undocumented persona. The State Department of Social Services conducts ongoing
quality control audits to determine the existence of fraudulent use of social services by
ineligible persons. In a recent review of audit findings covering the past two years, no
Instances of undocumented aliens fraudulentty receiving aid for themselves as citizens
or legal aliens were found in cases reviewed by the State. DPSS verfflee the eligibility
status of all non-citizens applying for or receiving federal public assistance using INS'
Systematic Alien Verification for Entitlement (SAVE) system.
Studies of amnesty persons suggest negligible utilization of welfare services by
undocumented persons. For example a study conducted by Comprehensive Adult
Student Assessment System (CASAS) found that only 2% of the IRCA population utilized
welfare services while they were undocumented. A survey of the amnesty population
in Los Angeles County conducted by Westat shows similarly low utilization rates. The
Westat survey found that 1.2.% of all amnesty persons had previously had received
General assistance before applying for amnesty status, 2.5% were receiving General
Assistance, and 4.2% had previously received Food Stamps assistance. The survey
questions in both the above studies speciflcally asked whether the amnesty respondent
or any family member living in the same household had received public assistance. To
the extent that other family members may have been citizens or legal Immigrants, the
actual percentage of undocumented persons who received welfare would be lower.
33
�Fiscal Impacts ot Immigration on Los Angeles County
Chapter II
Table 4. Methods ol Estimating Net County Costs for Services Provided to Subpopulation,
Fiscal Year 1991-92.
POfMMtanW
CMdrtn's Swtoot
1
pofxiaHonH
OMriatAaanwy
PoputaHonH
S5
PoptMonH
PopuMonH
PopuMonH*
PoputadonH
IMpuWlan%
Poputaton H
Poputaton ^
Poputaton %
ncn ^ipMMOM
AckMlCMM
Poputaton H
Survey A
Poputaton W
Poputaton %
Poputaton H
Poputaton %
PoptiatanH
POpiMonH
PuMo
PapiMtan%
8h««
PoputaSanH
PuMoSocW8«vtoM
PapUrton%
Suparior Court
AtOtwrOa
Sunvy
S«npto
Smrpto
•una/
•WW/
MunUprf Courts
Sampte
lo fw aofeMl nuntiar of oNMran aacvad by Mo doportmont
of daMng Fodaral rahnburawmnitorooal of aarvtoootoAmmty
and poputakn preporttono worn applodtoroduH
a 1880 CountywMa CrtmtrMf JuMloa CoofdMon CommHiM aludy on ortmM
IntftoCounty Jail population was used For juvenile delinquency caaea. Probation
uood. and lor non-criminal proQrarn araaa poputaton praportona
Mtadtarft*
For crtnSnal <
- 34 -
�Chapter//
Ftscal Impacts of Immigration on Los Angeles
County
Table 5. Estimated Net County Costs of Services Provided to Subpopulation, Rscal Year 1991-92
-MM
CNktoan'a SarrtoM
OMMAaonwy
iliiiiiillf
C«M»C«M«nof
•USTOTAL*
Roototffis
Popul—on
TOTAL
$800,000
Siss/no
$155,000*
$521,000
91.721^00
$35,144,000
$36,865,000
f1O.08S.0OO
$l2.7t7jOOO
911.121 JOOO
9726.000
934.666.000
$100,269,000
$134,038,000
•41.169400
9150.486^00
936.629.000
9365.066.000
$173,495,000
$538,561,000
11.4*1/100
9l^12jOOO
9527.000
$5,556,000
$30^90.000
$35,846,000
|S.SMjOOO
912^68 jOOO
910.388.000
N/A
$32,102^)00
$92,608,000
$124,910,000
S14.098.0OO
•MTOjOOO
913.336,000
$7.300J»0
$44,564,000
$197,302,000
$241,866,000
tS.S83.000
97.400JOOO
96.480.000
9672.000
$20,522^)00
$60,229,000
$80,751,000
SSS>40^OO
9S3^12j000
961488J0OO
$12,974^00
$193,833,000
$615,912,000
$809,745,000
•M.77Oj00lf
•1.10(M»0
0
$16,164,009
$102,034,000
$373,926,000
$475,660,000
t7XI89jOOO
97.S37J0OO
$3.426j000
$25.582400
$78.802400
$104,384,000
SS9>WjOOO
$37^21^)00
9MM4eflO0
$12,640^00
$121,056,000
$365,113,000
$486,169,000
tSBZ^TS^lOO
9104.480^00
(300,300,000
961.581.000
$046,705,000
$2,123,290,000
$3,069,995,000
HM«l8«V«OM
itanMl H M W I
MunUp^Coula
SlMriV
PUMo 8ocW SantoM
Supartor Court
MOfMrDapartmaMB
TOTAL
9T.ee*floo
The mm of em coal ol Amneoty Poraona. CMzon CNUran of untoounwawl Paraona.
AS lap^ kmlgranta rapaRlaoB ol (Ma of anlry tntoffiaUnNad SMaa.
CMrtran In fto AUtoFanflao w«i Oapandant CNMran (AFOC) houaahoM. wfiarotf
- 35-
Lagal Immlgranla, and Undooumaniad Peraona
ono patent la Undocumented or an Amnesty Parson
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Table 6. Estimated Percent of Net County Costs by Subpopulation, Fiscal Year 1991-92.
STUDY POPULATIONS
SUftlDTAI.'
Study PopuMlOfia
|
Raatottfw
. TOTAL
CMdrwi'«S«vtoM
0.4%
1.4%
2.4%
0.4%
4.7%
95 3%
100%
DMriot Anomay
0J%
O.S%
7.5%
82%
25.7%
743%
100%
HMttSarvtoM
7J0%
•mk
23 7 V
20.6%
67 8%
32 2%
100%
MmMHMttl
4J%
14%
e.5%
3.4%
155%
84.5%
100%
Munioipai Courts
•4%
m
74%
8.3%
25.7%
743%
100%
9.7%
Sim
6-2%
5.5%
18.4%
81 6%
100%
PuMoDatondar
•J%
0J%
74%
8.1%
25.4%
746%
100%
9hai«l
7J»%
1J0%
64%
7.6%
23.9%
76.1%
100%
PuMo SocM Santoaa
0J%
s.4wr
17.6^
0%
21.4%
786%
100%
Suparior Court
7J%
SJ%
6.7%
74%
24.5%
755%
100%
AlOharOapartmama
7J%
24%
64%
7.6%
24.9%
75.1%
100%
TOTAL
6^H
34%
11.9%
10.1%
30.8%
69 2%
100%
Cfltaan CNhtoan of Untooumanlad Rvoono. Rooant
Ttw aumof 6io ooal of Amnaaiy
Lagal Immigranta, and Undooumaniad Poraona
of d m of aniry Mo 810 UnNad SMao.
aiOh OopondarN CMdran (AFOC) houaahold. whom al
Cttfcfran In tw AidtoFi
1 parant la Undooumaniad or an Amnaaty Paraon.
- 36 -
�ESTIMATED NET COUNTY COSTS
FOR SERVICES PROVIDED
BY COUNTY OF LOS ANGELES, 1991-92
CHART 2.
AMNESTY P E R S
($104 Million)
6.0%
RECENT
L E G A L IMMIGRANTS
ALL O T H E R S
( $ 3 6 2 Million)
($2.1 Billion)
11.0%
69.0%
UNDOCUMENTED P E R S O N
( $ 3 0 8 Million)
10.0%
CITIZEN CHILDREN
OF
UNDOCUMENTED
($92 Million)
3.0%
�Chapter II
Fiscal Impacts of Immigration on Los Angeles Count
Need for Information Systems on Immigrant Service Costs
In March 1992, a letter from the Los Angeles County Grand Jury was forwarded to
the Chief Administrative Office (CAO) and Internal Services Department (ISD). The
1991-92 Grand Jury provided a series of recommendations based on a Grand Jury
management audit conducted in 1987 and their ongoing study of immigrant service
costs and potential solutions. The Grand Jury expressed concern that "there has
been little improvement in the existing system for data collection and cost estimation
since 1987." It recommended that each department involved in the Board study
develop plans for enhancing existing and potential data collection and costing
systems. It also asked that each department develop "recommendations to mitigate
costs which the County can pursue under prevailing local, state, and federal laws.
In addition, each department should identify areas in which changes to Federal and
State laws or budget augmentations may need to occur."
The Grand Jury recommendations, however, were not specifically addressed in the
study because they are beyond the scope of the Board order.
Estimated Revenues to All Levels of Government
Findings
Revenues Generated to All Levels of Government
The total revenues to all levels of government generated by the three immigrant
groups and the rest of the County's population in 1991-92 were as follows:
Recent Legal Immigrants
Amnesty Persons
unoocumenteo persons
$1,867,600,000
$1,540,600,000
$804,100,000
3.8%
3.1%
1.8%
SUBTOTAL
$4,332,500,000
8.7%
Rest of the Poputabon
$44,875,800,000
91.3%
TOTAL
$48,208,300,000
100%
• Altogether revenues generated by the three Immigrant groups to all levels of
government In 1991-92 were estimated to be $4J billion, or 8.7%, of the $49J
billion In revenues collected from all households In Los Angeles County.
38
�Chapter ll
RscaJ Impacts of Immigration on Los Angeles County
Revenues Generated bv the Immigrant Groups to Each Level of Govemmenf
TTie revenues generated by the three immigrant groups to each level of governm
in 1991-92 were as follows:
County
State
Federal
Other Local
$139,100,000
$1,237,300,000
$2,599,600,000
$356,600,000
3.2%
28.6%
60.0%
6.2%
Total
$4,332,500,000
100%
•
The Federal government receives the largest share of revenues follow
by the State, then local entitles, and the County receives the least.
•
Of the $4.3 billion revenues generated by the three immigrant groups
legal immigrants, amnesty persons, and undocumented persons) in 1
about $2.6 billion (60%) went to the Federal government, $1.2 billion (2
the State government, $357 million (8%) to other local entities, and
million (3%) to the County of Los Angeles.
Revenues Generated to the Countv of Los Angeles
The breakdown of the revenues collected by the County from the three immigra
groups and the rest of the County's population In 1991-92 were estimated as follow
Recent Legal Immigrants
Amnesty Persona
Undocumented Persons
$ 86,800,000
S 47,100.000
$ 36,200,000
SUBTOTAL
$139,100,000
Rest of the Population
$1,267,900,000
TOTAL
•
$1,387,000,000
4.0%
3.4%
2.8%
10.0%
90.0%
100%
All three Immigrant groups generated about $139 million (10%) of reven
Los Angeles County In the year studied, while about $1.25 billion (90%
revenue was generated by the rest of the population.
Table 8 on page 50 shows revenues generated by Immigrants to the County
Angeles in the year studied. These estimates suggest the following:
39
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Altogether the three immigrant groups accounted for about $134 million
of County property tax revenues and about $5 million (15%) of County s
tax revenues.
Revenues Generated to the State of California
The State revenues generated by each immigrant group and the rest of t
population in 1991-92 were as follows:
Recent Lega/ Immigrants
Amnesty Persons
Undocumented Persons
$486,500,000
$451,100,000
$299,700,000
4.1%
3.8%
2.5%
$1,237,300,000
10.4%
Rest of the Population
$10,704,700,000
69.6%
TOTAL
$11,942,000,000
100%
SUBTOTAL
The three immigrant groups together generated about 10% (or $1.2 billio
the total revenue generated by Los Angeles County residents to the Sta
California.
•
Altogether the three Immigrant groups generate about nine times more
revenue to the State of California than to the County of Los Angeles.
Revenues Generated to the Federal Qovemment
Federal revenues generated by immigrant group and the rest of the Coun
population in 1991-92 were as follows:
Recent Legal immigrants
unoocumenteo renons
SUBTOTAL
$ 1,212,600,000
$909,700,000
$477,300,000
37%
28%
1.4%
$2,599,600,000
7.9%
Rest of the Population
$30,375,800,000
TOTAL
$32,975,400,000
921%
100%
The three Immigrant groups together generated about 8% (or $2.6 billio
the total revenue generated by County residents to the Federal governm
-40-
�Chapter //
•
Recal Impacts of Immigration on Los Angeles County
Altogether the three Immigrant groups generate about eighteen times
more revenue to the Federal government than to the County of Los
Angeles.
Revenues Generated to Other Local Entitles
Other revenues were generated to local governmental entities in Los Angeles Coun
such as cities and school districts. The revenues generated to local governmenta
entities other than the County of Los Angeles by the three immigrant groups
compared to the rest of the County's population in 1991-92 were as follows:
Recent Legal Immigrants
Amnesty Persons
Undocumented Persons
$133,000,000
$132,700,000
$90,900,000
SUBTOTAL
$366,600,000
Rest of the Population
$2,537,500,000
TOTAL
$2,894,100,000
4.6%
4.6%
3.1%
12.3%
87.7%
100%
• 777e three immigrant groups together generated $357million (12%) of tota
revenues in the fiscal year 1991-92.
• Altogether the three Immigrant groups generate about two and one-hal
times more revenue to other local government entitles than to the Count
of Loa Angeles.
Estimated Costs and Revenues at the Countv Level
The estimated net County costs for services provided to recent legal Immi
amnesty persons, undocumented persons and their citizen children exce
estimated County revenues generated from them In fiscal year 1991-92, as
below. When comparing net County costs with revenues, It should be not
revenues paid by businesses were not counted.
• Net County costs experienced:
$946,706,000
• County revenuee generated:
$199,100,000
> Difference:
$807,806,000
-41
�Chapter II
•
Fiscal Impacts of Immigration on Los Angeles County
Net County costs for services provided to the three Immigrant groups
(recent Immigrants here legally under Federal law, persons granted
amnesty by the Federal government, and undocumented persons) and
citizen children of undocumented persons exceeded County revenues
from them by $807.6 million.
Revenues Generated bv the Amnesty Population in their Initial Five Years of Legal
Status
The estimated revenues generated by the amnesty population in Los Angeles County
during the first five years of their legal status were as follows:
County
State
Federal
Other Local
$218,000,000
$2,088,500,000
$4,211,700,000
$614,400,000
3.1%
29.3%
59.0%
8.6%
Total
$7,132,600,000
100%
During their first five years of legal status under Federal law while they were
ineligible for most Federal public assistance benefits, amnesty persons
generated about $7.1 billion in revenues to all levels of government of which
59% ($4.2 billion) went to the Federal government.
•42
�Chapter II
Fiscal Impacts of Immigration on Las Angeles County
Background
The revenue analysis in this study is focused on the origin and destination of the
major sources of tax revenue paid to government agencies by individuals and
families.
We have not included in the study revenues from corporations and businesses. The
major tax in this category is the corporate income taxes that are imposed by both the
State of California and the federal government. For the State, the Bank and
Corporate tax provides about 14% of general fund revenue while it provides just over
9% of federal revenues. Economists do not agree on who pays corporate taxes.
Some believe that such taxes are paid by owners of capital, while others contend
they are passed on to consumers. Still others believe it probably depends on a
multitude of factors including the nature of the Industry and the economic climate. In
a competitive market it is probably the owners of capital who bear most of the
burden. In a monopolistic industry such as public utilities, it is probably the consumer
who bears most of the tax. There is also the problem of allocating taxes for the many
corporations whose incomes and sales are derived primarily from outside Los
Angeles County.
We have concentrated on the major taxes collected directly from families and
individuals. At the federal level we have included the federal income tax, social
security, unemployment insurance, and the excise taxes on alcohol and tobacco. At
the state level we have included the personal Income tax, sales tax, vehicle license
and registration fees, lottery revenue, and excise taxes on alcohol and tobacco. At
the County level we have included the portion of the property tax and sales tax that
are paid by indlviduais.
Other sources of revenues generated from individuals include fines, fees and
penalties and other program revenues received by various County departments.
Those revenues are not included in this section because they have already been
subtracted from gross County costs to cakxitats net County costs tor services
provided to immigrants, as reported elsewhere in this study. Only 50% of lottery
revenues are appropriated by the government the rest is disbursed to lottery winners.
We have, therefore, counted only half the estimated lotteryreceiptsas revenue.
Together, theee taxes generate an estimated $49.1 billion in revenue to ail levels of
government and take about 29% of the personal Income of Loe Angeles residents.
The federal tax sources we have included constitute over 83% of federal Income, and
the state sources represent about 82% of CaUfomia general fund cotlections. At the
county level 20% of the general fund revenue comes In Inter-govemmentaJ transfers
from the federal government and 33% from the State. The property tax provides the
majority of revenue raised directly by the county. Residential properties account for
approximately 63% of real property assessments. A large portion of the remaining
43
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
revenue is generated by businesses, in particular non-residential property taxes,
licenses and fees.
A caution to the use of these results that must be stressed is the estimated revenue
generated by these immigrant groups is a function of the income assigned to these
populations. If our income estimates are too low, then the revenue that is generated
by these immigrant groups is too low.
Revenue Sent to Home Country
It is widely acknowledged that immigrants provide considerable support for their
sending countries by remittances to families at home. Laurie Qill (1990) estimates
that Mexican immigrants to the United States remit some $6 billion dollars to their
home country each year. This was equivalent to 29% of Mexico's export earnings
in 1988. In testimony before the U. S. Congress in 1986, Maura Bracket of the
Agency for International Development estimated that Mexican citizens in the United
States send $1 to $2 billion per year to Mexico. Assuming that one-third of the
Mexican immigrants live in Los Angeles County, the first estimate yields $2.0 billion
in 1988 and the second estimate yields about $500 million in 1986 remitted from Los
Angeles County to Mexico. The discrepancy would be only partially explained by
inflation and changes in the size of the immigrant population in the U.S. The latter
estimate is more consistent with estimates that can be derived from the Westat
survey of the amnesty population. In that survey the Loe Angeles sample reported
sending to their home countries an average of $1,087 per family. In the Westat
survey a family was defined as all immediate family members, e.g. brothers, sisters,
in-laws, parents and children.
In the revenue model a family Is treated as a tax unit A household composed of
two adult brothers, their spousos and the parents of the brothers would be a single
family in the Westat survey but would be three families (tax units) in the revenue
model. If we use the revenue model count of families, adjust the $1,087 per family
by 10% for inflation, the total amount remitted (to an home countries) by the three
immigrant groupe of this study would be $1.3 billion. If we assume that households
would more doeely approximate the Weetat definition of family then the calculation
yields $735 million each year In rsmittancea. An average of the two estimates would
indicate about $1 billion each year to aN countries. If we assume that Mexican origin
represents about 70% of the three immigrant groups then we would calculate that
about $700 million wars remitted in 1992 to MexicofromLoe Angeles County.
We did not try to adjust the expendtture patterns of the immigrant groupe in this study
for remittances to their home country. Our revenue estimates for immigrants,
therefore, err on the high side to the extent that remittances sent to relatives outside
the County result in lower expenditures on goods subject to sales, property, and other
�Chapter II
FISCMI
Impacts of Immigration on Los Angeles Co
consumption-based taxes. Other studies, for example the RAND study (McCarthy
and Valdez, 1986), reduced incomes for their immigrant populations to account for
this pattern of remittances.
The Revenue Model
A study of tax revenue generated by segments of the population would ideally start
with a set of records that profile the economic and social characteristics of
representative members of each segment of the population. Tax rules would then be
applied to the records that describe households and the contribution of a given subpopulation can be summarized. This approach to tax and revenue analysis is termed
microsimulation. That type of model has been used extensively at the national level
and also at the state level in the study of tax policy. For Los Angeles County, no
such model exists and bothtimeand data constraints prevented the development of
such a model for this study. We have, therefore, developed an alternative approach
using aggregate data. Each population is described by a matrix of age, income, and
household characteristics. Tax rates are then applied to this matrix. This is not,
however, a definitive study of this issue and should be viewed as an estimate, not a
precise answer to the question of revenues collected from these segments of the
immigrant population.
Estimates of revenue generation comefromour revenue model. The goal of this
model is to estimate tax revenue that la paid by the three immigrant groups in Los
Angeies County.' The basic assumption in the model is that taxes paid are primarily
a function of household and family income.
The revenue model applies tax rates to an aggregate description of four groups.
These groups are: 1) recent legal Immigrants; 2) amnesty persons; 3) undocumented
persons; and 4) rest of the population of Los Angeles County. It should be noted
that the rest of the population of Los Angeles County also contains immigrants who
entered the County before 1980. The immigrants in the rest of the population group
are older, more established immigrants, and, therefore, of higher income. The three
immigrant groupe depicted here roproeont a large proportion of the low income
segment of Los Angeles County's immigrant population.
The basic unit of analysis is the household. In the model we assume that a
household is exclusively composed of indlviduais in a single study population. While
we know this is not the situation Inreality,we believe any bias is small. This is
because the tax calculation is based on economic statue and as long as we have
accurately described the economic situation of each group we should bo correctly
depicting the tax contribution. Starting the deecription of the populations with
households was dons for two reasons. The first, is that property taxes are associated
with a housing unit Households occupy housing units and therefore households pay
45
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
the property tax. The second, is that consumer expenditures, which we use to
estimate sales and vehicle related taxes, are based on households. ...
Income taxes are paid by family units (or un-related individuals) within the household.
In the model, a percentage of households in each group is assumed to be composed
of multiple families (or individuals). In order to estimate the tax revenue collected
from families and households, we estimate the income of the family, what proportion
of the household income is spent on taxable consumer goods and the housing
characteristics of the group. For example, on average we assume those who live in
more expensive housing will pay a higher property tax. Age of the head of household
is also a factor in determining tax liability. Retired people on social security income
will have a lower tax liability than younger persons with the same income because
social security income is not taxable in the State tax system and only partially taxable
in the federal system.
The data sources used to determine the characteristics of the study populations
include the 1990 Current Population Survey, the 1989 American Housing Survey, the
Westat Survey, and the 1990 Census. For income and payroll tax rates, Statistics
of Income (U.S. Internal Revenue Service, 1991) Bulletin published by the federal
government and the California Franchise Tax Board Annual Report 1989 were used.
The California Governor's Budget and the Presidents Budget were also used to
determine total amounts of revenue collected from these tax sources. Excise tax
rates were obtainedfromthe California State Board of Equalization. Data on motor
vehicle registrations were obtained from the California Department of Motor Vehicles.
Figure 4 shows a diagram of the model design. A more detailed description of the
income and tax rate assumptions, used in the model, is given in Appendix B.
46
�FIGURE 4. T H E R E V E N U E M O D E L
WESTAT Survey
(Amnesty
population)
WESTAT Survey
(Post-1978
immigrants)
1985 American
Housing Survey,
1990 Census, and
1990 Current
Population Survey
1930 Census
Current Population
Survey
Socio-economic characteristics of
Amnesty
Population
Undocumented
Persons
Households / Income
Recent Legal
Immigrants
All others
Property Tax
Tax as percentage of income
Sales Tax
Percentage expenditure in taxable
kerns
X
Tax Units
Vehicle License Fees
Gasoline Tax
X filing rata X tax rale
Income Taxes
Excise faxes
Adults
X Labor force Participation Rata
X Percentage of wage and salary
income X tax rate
OTHER LOCAL
}
COUNTY
STATE
GOVERNMENT
Payroll Taxes
FEDERAL
GOVERNMENT
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Revenue Summary
Estimates of tax revenue generated by each of the three immigrant groups and the
rest of the population of Los Angeles County are given in Table 7 through Table 11
on pages 50 through 52. The revenue sources include: property taxes, sales taxes,
payroll taxes (Social Security and unemployment insurance), federal income tax, state
income tax, vehicle license and registration fees, gasoline taxes, lottery revenues and
federal and state excise taxes.
The accuracy of these estimates is dependent on the accuracy of our descriptions of
these populations, both in sheer numbers and income distributions. A more detailed
description of the assumptions used in the revenue calculations is given in Appendix
B. By far the most critical assumption is that of income. If we increase our
assumption of income tax compliance rates, for example, the primary tax affected
would be the Social Security payroll tax, since, based on their estimated income
levels, many of the immigrant households would not owe income taxes even if they
filed a tax return. Both the Franchise Tax Board (FTB) and the Internal Revenue
Service report the number of tax returns filed and the amount of taxes collected by
income group. The most recent data available are for 1989. The revenue model
generates a total of the number of taxable returns being filed under these
assumptions and the results indicate that the model is, overall, possibly assuming too
high a rate of compliance. If we lower the rate of tax compliance in the highest
group, the rest of the population, however, we generate too few taxes from the upper
income groups. We, thus, assumed that our rate of compliance in the high income
groups is probably correct and that compliance rates in the lowest income groups
may be too high.
In a report from the Center for U.S. Mexican Studies (Cornelius, 1982), the author
notes several studies that show high proportions of immigrants for whom taxes are
withheld from wages (70-90%) but a low proportion of immigrants (21-33%) who filed
a tax return. For low income workers the implication is that many of them do not
claim the refund due. This is a difficult situation to address. We have assumed that
if wages have been reported to the IRS or FTB the taxpayer is likely to file a tax
return since the chance of being detected is increased by not filing a tax return.
Evidence of this was shown in 1989 when a requirement to report the wages of
farmworkers was implemented by the IRS. That year a large increase of federal tax
filings occurred in California. In addition, a worker earning minimum wage would be
exempt from withholding for income tax (but not Social Security payroll taxes) if the
wage-earner claimed dependents. Tax law allows citizens of Mexico and Canada to
claim dependents living in their home country. Prior work with tax records indicates
considerable use of that provision. There is no such exemption from Social Security
payroll taxes, however, and to the extent that withholding exceeds filing rates it is the
PICA (Federal Insurance Contributions Act) tax that is most likely to be affected.
Since we have nofirmdata on the extent to which this occurs and the filing and
48-
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
employer reporting are largely unknown we have not tried to deal with this issue. In
comparing the revenues generated by these populations, it is important to note the
size of populations as given in Chapter I. The recent legal immigrants, for example,
pay less in total to PICA than does the amnesty population, despite the higher income
of the former group. This is because the recent legal immigration population is 30%
smaller than the amnesty population. On a per capita basis, the recent legal
immigrants pay more than the other two immigrant groups. Children are assigned to
the same group as their mother.
Table 7 on page 50 gives the summary of revenues by level of government and study
population. Table 8 through Table 11 on pages 50 through 52 give the revenue detail
for each level of government: County of Los Angeles, State of California, U.S. Federal
government and "Other Local" entities. The category "Other Local" includes schools,
cities and the Los Angeles County Transportation Commission (LACTC). In each
case the total tax and per capita tax collected by the agency is also shown. Row and
column totals show differences due to rounding.
As seen in Table 7 the federal government is the largest beneficiary of tax revenues
generated by Los Angeles County residents. Approximately 67% of the taxes
collected goes to the federal government. For the immigrant populations about 61%
goes to the federal government. The reason for this is primarily the social security tax
(PICA).
The three immigrant groups represent a large proportion of the low income population
of Los Angeles County. The income tax system in the State of California is among
the most progressive in the nation. That is the single most important factor in the low
contribution rate of these immigrants to State income taxes. The federal income tax
system, though less progressive than the State's, still excludes the lowest income
populations from taxation. They contribute most to those revenue sources that are
based on consumption. This is consistent with the observations of other researchers
cited in Chapter V who conclude that even if tax compliance were complete the extra
tax revenue generated would be small.
-49-
�Fiscal Impacts of Immigration on Los Angeles County
Chapter 11
Table 7. Estimated Revenues by Government Agencies by Subpopulation, Fiscal Year 1991-92.
^^aim^ii^"
Federal
Slate
County
Other Local
TOTAL
Per Taxpayer
TOTAL
$1,212,000,000
$909,700,000
$477,300,000
$2,599,600,000
$30,375,800,000
$32,975,400,000
$486,500,000
$451,100,000
$299,700,000
$1,237,200,000
$10,704,700,000
$11,941,900,000
$55,800,000
$47,100,000
$36^00,000
$139,100,000
$1,257,800,000
$1,396,900,000
$133,000,000
$132,700,000
$90,900,000
$356,600,000
$2,537,500,000
$2,894,100,000
$1,887,800,000
$1,540.600400
$904,100,000
$4,332,500,000
$44,675,800,000
$49,208,300,000
$3,731
$2,206
$1,617
$2,496
$9,073
$7,364
Table 8. Estimated Revenues Generated to Los Angeles County by Subpopulation, Fiscal Year 1991-92.
TOTAL
j Property Tax
$54,100,000
$45^00.000
$35,000,000
$134,400,000
$1,230,800,000
Sales Tax
$1,700,000
$1,900,000
$1,200,000
$4,800,000
$27,000,000
$55,800,000
$47,100,000
$36^00.000
$139,100,000
$1,257,800,000
$110
$70
$65
TOTAL
Per Taxpayer
- 50 -
$80
$254
$1,365,200,000
$31,800,000
$1,396,900,000
$209
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Table 9. Estimated Revenues Generated to the State of California by Subpopulation, Fiscal Year 1991-92
iiiplilpiii
Rattottftt
-- PopuMkm
.
x
^taSSXS*
TOTAL
Sato* Tax
$230,000,000
$266,900,000
$168,700,000
$672,500,000
$3,830,500,000
$4,503,000,000
Inooma Tax
$118,900,000
$41400400
$17400400
$178,000,000
$5,010,300,000
$5,188,300,000
VehUoUoenas
Fees (VLF)
$40400^00
$30400400
$31.100400
$111,600,000
$659,800,000
$771,400,000
VehUa
Reglatratlone (VB)
$10,700XX»
$10400400
$15.100400
$54.100400
$319,700,000
$373,800,000
ExdaaTax
$23400 flCO
$31400400
$25400400
$80,100,000
$227,900,000
$308,000,000
Qaaolna Tax
$30J3O0flO0
$29400400
$23400400
$83,400400
$492,900,000
$576,300,000
$16.700400
$22400400
$18400400
$57,500,000
$486,500,000
$451,100,000
$290,700,000
$1437400.000
•061
$672
$536
TOTAL
PwTaxpayw
- 51 -
$713
a IDO.DOO.UUU
$10,704,700,000
$2,164
$221,000,000
$11,941,900,000
$1,787
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Table 10. Estimated Revenues Generated to the Federal Government by Subpopulation, Fiscal Year 1991-92.
llllllll
ii^iiiiii
Re«t <* ttw
:
:|<::'-:;.;:: PminHuBni'l
. ;. PoiMMion
:
TOTAL
1 Payroll Tax
$565,900,000
$627,400,000
$339,400,000
$1,552,300,000
$11,040^00.000
$12,592,500,000
j Inooma Tax
$567,200,000
$201,300,000
$72,300,000
$830,700,000
$18,429,200,000
$19,259,900,000
Qaaolna Tax
$34.400400
$33400,000
$26,400,000
$94,700,000
$559,300,000
$654,000,000
ExdasTax
$35,500400
$47400.000
$39400.000
$121,900,000
$347,100,000
$469,000,000
$1,212.600400
$909,700,000
$477,300,000
$2,589,600,000
$30,375,800,000
$2,397
$1,356
$854
TOTAL
J Par Taxpayer
$1,497
$6,141
$32,975,400,000
$4,935
Table 11. Estimated Revenues Generated to Other Local Entities by Subpopulation, Fiscal Year 1991-92.
|
: mm
i
TOTAL
j Properly Tax
$58400400
$49400,000
$38,100,000
$146,200,000
$1,338,700,000
$1,484,900,000
SaleeTax
$74.100400
$83,500400
$52400.000
$210,400,000
$1,198,700,000
$1,409,100,000
$132,900,000
$132,700,000
$90400.000
$356,600,000
$2,537,400,000
$2,894,000,000
$263
$198
$163
j TOTAL
Par Taxpayer
- 52 -
$205
$513
$433
�Fiscal Impacts of Immigration on Los Angeles County
Chapter II
Table 12. Estimated Revenues Generated by the Amnesty Population in Los Angeles County during their Initial Five Years of Legal Status.
: ranenueffe
| Federal
$4,211,700,000
59.0%
State
$2,068,500,000
29.3%
$218,000,000
3.1%
$614,400,000
8.6%
$7,132,600,000
100.0%
County
| Other Local
| TOTAL
-53-
�CHART 3.
ESTIMATED REVENUES GENERATED
TO ALL LEVELS OF GOVERNMENT BY IMMIGRANT POPULATION
IN LOS ANGELES COUNTY, 1991-92
FEDERAL
GOVERNMENT
($2 6 Billion)
67.0%
�CHART 4.
ESTIMATED REVENUES GENERATED FOR
LOS ANGELES COUNTY BY SUBPOPULATIONS
1991-92
UNDOCUMENTED
PERSONS
($36.2 Million)
2.6%
A L L OTHERS
($1.26 B i l l i o n )
9 0 0%
RECENT
LEGAL IMMIGRANTS
($55.8 Million)
4.0%
AMNESTY
PERSONS
($47.1 Million)
3.4%
�Chapter II
Fiscal Impacts of Immigration on Los Angeles County
Revenues Generated by the Amnesty Population In their Initial Five Years of
Legal Status
Our revenue model was used to estimate the revenue contributions made by amnesty
persons during their initial five years of legal status. Table 12 on page 53 provides
the tax revenues generated for each level of government by the amnesty persons
during the first five years of their legal status. These estimates were based on the
assumption that their income, and hence the tax revenue generated by them,
increased on an average by 4% annually.
Conclusions
• Los Angeles County bears a disproportionately high cost for serving
immigrants who are in this country as a result of Federal laws and/or policies
and decisions, while most tax revenues collected from Immigrants go to the
Federal government. Both previous research and this study indicate that the gap
between the costs of services and the revenues generated by immigrants creates a
special problem for counties with large and relatively poor immigrant populations.
• The estimated net County costs of providing services to the three immigrant groups
(recent legal immigrants, amnesty persons, and undocumented persons) and to
citizen children of undocumented persons in 1991-92 were about $947 million, while
the estimated revenues, taxes and fees generated by them to the County of Los
Angeles were $139 million, resulting in a net deficit of about $808 million.
• The net County costs exceeded County revenues for each of the immigrant groups
being studied.
• The three immigrant groups and the citizen children of undocumented persons'
share of total net County costs was 31%, which exceeds both their 25% share of the
County's population and 10% share of total County revenues.
• The three immigrant groups and citizen children of undocumented persons have
the greatest impact on the County health services, accounting for about 68% of total
net County costs for health services.
• The three immigrant groups contributed in revenue roughly $4.3 billion to all levels
of government in Los Angeles County in 1991-92.
• The three immigrant groups being studied account for 25% of the County's
population, but about 12% of total revenues to other local governmental entities, 10%
of total revenues to the State of California, and 8% of total revenues to the Federal
- 56
�Chapter II
Fiscal Impacts of Immigration on Los Angeles county
government. The lower tax revenues generated from immigrants relative to the native
population reflects their lower average incomes. The amount of taxes paid by
immigrant groups was highly correlated to their income level.
• The three immigrant groups together generate eighteen times more revenue
to the Federal government, nine times more revenue to the State of California,
and about two and one-half times more revenue to other local government
entitles than to the County of Los Angeles.
• Recent legal immigrants generate more tax revenues than amnesty persons who,
in turn, generate more revenue than undocumented persons.
• During their first five years of Federal legal status, amnesty persons generated
about $7 billion in revenues to all levels of government of which 59.0% went to the
Federal government, 29.3% to the State of California, 8.6% to other governmental
agencies, and 3.1% to the County of Los Angeles.
57-
�Chapter ill
Impact of Immigration on Seieaed Services
Background
Education is the largest single expenditure in the State's budget. Because education
is so expensive, most parents who use the public school system, immigrant or native,
do not pay the full cost of educating their children during the time their children attend
school. Since all segments of society benefit from an educated populace, business
included, the California funding system is such that all segments of society contribute
to the costs of the education of children. In the long term it is assumed that the
returns to the State are greater than the costs. It is not possible in this study to
quantify these long term aspects of education. With the awareness that there is a
longer temn view on the costs and societal benefits of education we return to the
focus of this study - namely the current costs of education associated with each of
our study groups.
Due to the unavailability of data, we did not estimate the costs of immigration to each
individual Los Angeles County school district Instead, we estimated the total cost
of immigration to Los Angeles County's 82 school districts. Stuart E. Qothold,
Superintendent, Los Angeles County Office of Education (1992a), explained in a letter
to the Los Angeles County Chief Administrative Officer that public schools are
prohibited from collecting information on students' or parents' immigration status (See
Attachment C). Thus, we have no data on each dlstricf s immigrant enrollment
With the passage of Proposition 98 in 1988, State schools are guaranteed
approximately 40% of the California budget (Bouvier, 1991; Office of the Governor,
1992), making education the largest single expenditure in the State budget
The California Department of Education, Office of Fiscal Policy (1992b) reports an
estimated state average day to day spending of $4,672 per Average Daily Attendance
(ADA) for 1991-92, approximately $100 of which goes toward statewide programs.
Thus, for 1991 -92 an estimated $4,572 per ADA was spent at the district level. This
allocation accounts for bothfixedand variable costs and includes all local, state, and
federal funds, except the Federal Impact Aid Program which affects areas with large
portions of government land (California Department of Education, 1992a).
State procedures for allocations to dtetricts assured Los Angeles County school
districts of roughly $3,000 to $3,200 per ADA, additional funding came from
categorical program funding, local property taxes and miscellaneous local funding
(California Department of Education, 1992a). In California, for the 1991-92 school
year, an estimated 61.0% of the funding came from State funds, 1.8% from lottery
funds, 20.8% from local property tax levies, 7.7% from federal funds and 8.7% from
other local sources (California Legisiative Analyst's Office, 1992). The funding
attributed to each source is based on an estimated total ADA expenditure of $4,945.
The percentage of funding from each source would be slightly different for the $4,672
per ADA day-to-day expenditures (California Department of Education, 1992b).
59
�Chapter III. IMPACT OF IMMIGRATION ON SELECTED SERVICES
This chapter examines the impact of immigration on two specific service
areas - school district costs and public housing.
Estimate of School Districts' Costs
Findings
This study estimated costs to school districts in Los Angeles County (which are
separate government entities from the County government) for the three immigrant
groups and the citizen children of undocumented persons compared to the rest of the
population. Overall, an estimated 61% of school districts' funding came from State
funds, 2% from lottery funds, 21% from local property tax levies, 8% from federal
funds and 9% from other local sources. The estimated cost per pupil averaged
$4,480 in Los Angeles County in 1991-92.
The estimated costs for the study populations compared to the rest of the population
in 1991-92 were as follows:
Recent Legal Immigrant Children
Amnesty Ct\ildren
Undocumented Children
Citizen Children ot
Undocumented Persons
$331,100,000
$123,500,000
$367,900,000
5.1%
1.9%
5.7%
$662,300,000
10.3%
SUBTOTAL
$1,464,800,000
23.0%
All other children
$4,97Z700,000
77.0%
TOTAL
$6,457,500,000
100%
Educational costs for the three Immigrant groups (recent Immigrants here
legally under Federal law, persons granted amnesty by the Federal
government, and undocumented persons) and citizen children of
undocumented persons account for $1.5 billion (23%) of total costs In Los
Angeles County school districts.
Pubiic schools do not inquire about the Immigration status of students because
public education is available to ail school-age children regardless of their
immigration status.
58
�Chapter III
Impact of Immigration on Selected Services
For this study, we used the California Department of Education average of $4,572
that each district spent per ADA and converted it to a $4,480 per pupil cost. The total
expenditures for the study populations are shown in Table 13 below and Chart 5 on
page 61.
Table 13. Estimated Educational Expenditures by Subpopulation, Fiscal Year 1991-92.'
Recent Legal Immigrant Children
$ 331,100,000
Amnesty Children
$ 123,500,000
Undocumented Children
$ 367,900,000
Citizen Children of
Undocumented Persons
$ 662,300,000
TOTAL
$ 1,464,800,000
Figures are based on the average per student cost of $4,480.
Citizen Children of Undocumented Persons is the only group in this table
that includes native-born citizens.
60
�CHART 5.
ESTIMATED COSTS TO SCHOOL DISTRICTS
IN LOS ANGELES COUNTY
1991-92
C I T I Z E N CHILDREN OF
UNDOCUMENTED P E R S O N S
($662.3 Million)
10.3%
UNDOCUMENTED C H I L D R E N
ALL OTHER CHILDREN
($367.9 Million)
( $ 4 . 9 7 Billion)
5.7%
77J0%
AMNESlTY C H I L D R E N
($123.5 M i l l i o n )
19%
RECENT LEGAL
IMMIGRANT C H I L D R E N
($331 1 Million)
5.1%
�Chapter III
Impact of Immigration on Selected Services
Estimation Method
Based on our estimates of the 1992 Los Angeles County populations under age 18,
we estimated a public school participation rate and multiplied the number of
participants in each of our target groups by per student costs. To calculate school
participation we assumed that our target groups would have the same age and
participation characteristics as a weighted average of the Asian/Pacific Islander and
Hispanic populations. The method we used is as follows:
1.
We used the 1990 Census data to calculate the ratio of school age
population (population age 5 -17) to population under age 18 for people
identified as either Asian/Pacific Islander or Hispanic (weighted for the
relative size of their populations). The ratio (.68) was multiplied by the
under age 18 population of each of the three immigrant groups to get
estimates of school age population.
2.
School participation rates, which took into account drop-out rates, were
estimated by comparing the age 5-17 census population for 1990 with
the 1989-90 public school enrollment figures (California Basic Education
Data System, 1989). We determined school participation rates for
Asian/Pacific Islanders and Hispanics. We used a weighted mean of the
participation rates for the above two groups to estimate a school
participation rate (.86) for the three immigrant groups. The school
participation rate was multiplied by each immigrant group's school age
population.
3.
We multiplied the State ADA expenditure of $4,572 by 98% to convert
ADA expenditures to per pupil expenditures. ADA is estimate at between
95% and 98% of enrollment for Los Angeles County (Los Angeles
County Office of Education, 1992b and 1992c). For the analysis we
used 98%.
4.
We subtracted the number of students in the three immigrant groups
(331,000) from 1,441,000, the total number of students in Los Angeles
County Public Schools, (Califomia Department of Education, I992d) to
get the number of all other students (1,110,000).
5.
Finally, we multiplied the nunber of students in each of the groups by
$4,480 to get an estimate of total educational costs.
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�Chapter III
Impact of Immigration on Selected Services
Categorical Programs
Immigrant children and children of immigrants often have special educational needs.
The federal and state governments fund categorical programs that respond to some
of those needs, though most of these programs are not limited to immigrant students.
The number of Limited English Proficient (LEP) students (measured by standardized
tests) in Los Angeles County public schools in 1991 was 433,681 (Califomia
Department of Education, 1991), representing 31% student population (California
Department of Education, 1992d). Olsen (1988) estimated that 10% to 25% of the
Spanish speaking LEP students in Califomia are native bom. Los Angeles County
Office of Education estimated that the percentage of native bom LEP students is
substantially larger (Los Angeles County Office of Education, 1992c).
The uncertainty in classifying LEP students in terms of our three immigrant groups
makes it difficult to assign LEP and other bilingual education costs directly to the
study populations.
Federal funds from the Emergency Immigrant Education Act of 1984 (EIEA) are
distributed to states based on the ratio of EIEA students in qualifying school district
to each state. The state then distributes the funds to school districts in proportion to
the number of EIEA students in each district To qualify for the program, a student
must be foreign-bom with less than three complete academic years in U.S. schools
(United States General Accounting Office, 1991). For 1991-92 fiscal year Los
Angeies County received $6,351,156 through this program (Califomia Department of
Education, 1992e).
Other federally funded programs are the Bilingual Education Act (Title VII) Program,
Chapter 1 Program for Educationally Disadvantaged Children, Chapter 1 Program for
Migrant Children, Transition Program for Refugee Children (Olsen, 1988; United
States General Accounting Office, 1991).
In Califomia, the major source of State funds used to support school services to
immigrant children is the Economic Impact Aid (EIA). For the 1991-92 fiscal year the
County of Los Angeles school districts received $113,986,749 in EIA funds. These
funds were earmarked for compensatory education as well as bilingual education
programs. Other programs include the School Improvement Program, Demonstration
Programs in Reading and Math, The Miller Unruh Reading Program and Urban
Impact Aid (Olsen, 1988).
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�Chapter III
Impact of Immigration on Selected Services
Comparisons with Previous Studies
In their study, Muller and Espenshade (1985), concluded that the State spent more
for educational services per Mexican immigrant household in Los Angeles County
than it did per Los Angeles household in general, primarily because of higher
birthrates among Mexican immigrant families. McCarthy and Valdez (1985) found
that the high cost of educating students in Califomia combined with the low incomes
and relative youth of the State's Mexican immigrant population result in government
expenditures that far exceed what immigrants contribute in taxes. They go on to say
that this imbalance is true for all low-income families, but The State subsidizes the
education of the children of low-income families in the belief that public investment
in education provides general public benefits." (McCarthy and Valdez, 1985, p.24).
Conclusions
• The estimated education costs undocumented children, citizen children of
undocumented persons, amnesty children and recent legal immigrant children
accounted for 23% (or $1.5 billion) of total school district costs in Los Angeies
County.
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�Chapter III
Impact of Immigration on Selected Services
Inventory of the Uses of Public Housing
Findings:
Public housing provided to low income persons is federally funded with
no County share of costs.
Actual data on the use of public housing by immigrants are not collected.
However, the self-reported rate of use of public housing by
undocumented and amnesty persons has been found to be low in
surveys of these persons.
Types of Public Housing
This section discusses the impact of each of the three immigrant groups and citizen
children of undocumented on public housing. Public housing projects are for very low
income households (those below 50% of the County median for household income).
They are financed by federal funds, but managed by local housing authorities. The
vast majority of public housing projects were built before 1970. They were built with
federal dollars with land provided by the local jurisdiction. They are currently
operated exclusively with federal funding. In Los Angeles County, there are
approximately 13,000 public housing units, the vast majority of which are owned by
the City of Los Angeles and the County of Los Angeles. There are a few cities with
smaller numbers oi public housing units.
The City of Los Angeles has no line item in their annual budget for public housing
though they do provide some support services to these projects such as policing and
health services. The public housing is administered by the Housing Authority, a
proprietary agency affiliated with the City. Currently, the City of Los Angeles
manages 8,756 units in public housing projects.
The County of Los Angeles manages 3,237 public housing units, of which 33 have
been set aside for resident managers. There are approximately 6,860 persons
residing in these units. The units are administered by the County's Housing Authority
within the Community Development Commission. Funding for the operation and
administration of these units is provided by the federal government
It should be noted that there are other programs which involve public subsidies for
low and moderate Income families or individuals. These programs include federal
and state tax subsidies for owner-occupied and rental housing; federal rent subsidies
through the Section 8 program; and federal, state and local construction subsidies for
low and moderate income housing. However, a discussion of these programs is
beyond the scope of this study.
65-
�Chapter III
Impact of Immigration on Selected Services
Number and Characteristics of Public Housing Residents
The population in units managed by the City of Los Angeles is around 31,000. The
ethnic composition of the population is about 63% Latino, 28% African-American, 6%
Asian, and the rest Native American or White. For the age distribution, there are
5,392 children under the age of 6 and 11,192 school-age children (ages 6-17). in
addition, the City of Los Angeles owns 1,074 housing units reserved for elderly or
disabled persons; most are single persons households. The demographic
composition of these units are 14% Latino, 29% African-American, 15% Asian, with
the rest being White or Native American.
There are approximately 6,860 persons residing in units administered by the County
of Los Angeles. The ethnic composition of these units is approximately 30% Latino,
27% African-American, 1.5% Asian, 41% White, with the rest being Native American.
The age distribution of these residents is approximateiy 8% under the age of 6, and
23% being school-age children (6-17).
The County's Community Development Commission and the City of Los Angeles'
Housing Authority are prohibited by federal regulations from inquiring about the
citizenship or legal status of applicants or tenants (See Attachment D). The federal
government proposed regulations to verify the immigration status of applicants and
tenants (the so-called "alien rule"), but this has been blocked by court injunction. The
federal government withdrew the regulations and subsequently issued orders not to
inquire or collect information on the legal status of applicants or tenants.
Consequently, the precise number of persons in public housing units for each of the
three immigrant groups and citizen children of undocumented is unknown. Actual
data on the use of pubiic housing by immigrants were not collected for this study.
However, the self-reported rate of use of public housing by undocumented and
amnesty persons has been found to be low in surveys of these persons.
According to the Los Angeles County sample of Amnesty persons in the survey
conducted by Westat Inc. for INS, at the time they applied for amnesty, 1.6% were
in families in which someone received government assistance for rent or utilities.
This compares to 4.7% of all Los Angeies County households reporting that they
received government housing assistance in the 1989 American Housing Survey of
Los Angeies County conducted by the Bureau of the Census.
The statewide CASAS survey of Amnesty persons found that 1.3% of the pre-1982
respondents and 0.2% of the special agricultural worker (SAW) respondents or their
family members were receiving some type of government housing assistance "such
as Section 8, public housing assistance, or a subsidized home loan" at the time of the
survey, if past and present assistance are considered together, 2.5% of the pre-1982
respondents and 0.5% of the SAW respondents had at some time received housing
66-
�Chapter III
assistance.
population.
Impact of Immigration on Selected Services
In comparison, amnesty persons make up 7.8% of the County's
Conclusions
• Public housing is not a cost to the County government because the programs are
federally funded. The rate of use of government housing assistance by
undocumented persons and amnesty persons is less than that of the total population
based on surveys of such persons.
67
�CHAPTER IV. REVIEW AND REPORT ON EXISTING STUDIES
In this chapter we summarize existing studies on the economic and fiscal impacts of
undocumented persons and discuss other research issues. These include research
from the RAND Corporation and the Urban Institute and other pertinent studies on
immigration.
Findings
While these studies provided useful background information, they did not
specifically answer the questions about the impacts of immigrants in Los
Angeles County, as defined in the Board order, and were generally
conducted before the Immigration Reform and Control Act of 1986 was
fully implemented.
Most of the studies suggest that immigration has not had a significant
impact on the employment of native workers.
Existing studies have found evidence of wage depression attributable to
immigrants. However, the research indicates that immigrants mainly tend
to depress wage levels in industries where immigrant workers are heavily
concentrated.
Studies have shown that the skills and earnings of recent immigrants are
below the skills and earnings of earlier immigrants.
Some economists argue that immigrants, especially through their
ownership of small businesses, expand the economy and contribute to
the growth of the region..
Previous Studies on the Fiscal Impacts of Immigrants and Undocumented
Persons
It is difficult to make meaningful comparisons between the results of this study and
the results of other studies on the fiscal impact of immigrants, since studies tend to
differ on the categories of immigrants, costs and revenues studied.
A study of the fiscal impact of undocumented immigrants residing in San Diego
County was released by the Auditor General of Califomia (1992) as we were finishing
our own study. There were several crucial differences between the Auditor General's
analysis and our own. First, we included all County government costs while the
Auditor General's study included State and local government costs for only criminal
-68-
�Chapter IV
Review and Report on Existing Studies
justice, education, health services and social services. Second, we included property
tax in our revenue estimates and they did not Third, we included a comparison to
the rest of the population and the Auditor General study did not Fourth, we used a
different population estimation method.
The Auditor General's study estimated that there were 200,000 undocumented
persons residing in San Diego County, that the State and local government costs
were $206 million, and that the State and local government revenues received from
this population was $60 million. This indicates a deficit of $146 million or $730 per
person. However, as the Auditor General report notes, and we pointed out above,
not all costs or revenues are included in the study.
An often quoted RAND study by McCarthy and Valdez (1986) examined costs and
revenues for Mexican immigrants in Los Angeles County. This study looked at both
immigrants who have permanently relocated to Califomia and the pool of cyclical
immigrants from Mexico. To estimate costs the study used data on total per capita
government expenditures with some assumptions about immigrant use of those
services. In other words, participation rates were derived through assumptions rather
than by statistical estimation. For each tax considered, a flat tax rate was applied to
all immigrants, only the workers' portion of social security was included in revenue
and a large segment of taxes were applied on a per capita basis. For permanent
residents, they estimated a per capita tax contribution of between $763 and $932 per
worker in 1982 dpllars. The per capita costs were then compared to per capita
revenues generated from tax contributions. The study established that in 1982, with
the exception of temporary immigrants, all groups generated more costs than
revenues. Considering the differences intime(1982 vs 1992) and the assumptions
used by the RAND researchers, a comparison is difficult The permanent immigrants
in the RAND study would be a mixture of our amnesty, undocumented and recent
legal immigrants. They concluded that "due to the progressive nature of California's
tax structure, the low income levels of most Mexican immigrants and the likelihood
that the fraction of permanent immigrants is growing, the costs may be rising faster
than the revenues."
Working for the Urban Institute, Muller and Espenshade (1985) studied the revenue
generated from the Mexican immigrant population in Los Angeles County. The cost
estimates were based on a 1982 Los Angeles County analysis of health care,
welfare, public protection and other servicee. Based on the data provided by the
County departments, the authors estimated the cost per household for Mexican
immigrant households. Their study included corporate tax and "other* taxes, not in
the current analysis. Tax collections were reported on a per family basis. Mexican
immigrant families were found to pay $1,425 in taxes as compared to an overall per
family contribution of $2,589 in 1980 dollars. As a ratio, the average immigrant family
in that study was paying about half as much In taxes as the average native family.
Our study estimated that an amnesty family is paying about 29% of the average
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�Chapter IV
Review and Repon on Existing Studies
amount of taxes, the recent legal migrant family about 55% of the average, and the
undocumented family about 24% of the average tax payment. The Urban Institute
study examined the total immigrant population which would be expected to have
higher average income than the three immigrant groups we studied. The authors
concluded that there existed a fiscal deficit for Mexican immigrant households for both
the State of Califomia and Los Angeles County in 1980. The deficit, however, was
much greater at the County level.
Weintraub (1984) studied the impact of undocumented residents in Texas by
surveying providers of services such as State agencies and County departments.
The study compared costs for education, corrections, social services and health
sen/ices with the revenues generated by undocumented immigrants. Both low and
high estimates of the study showed that while revenues exceeded costs at the state
level. For six cities, however, costs exceeded the revenues generated.
When data are not available from case files that identify immigrants, total costs can
be calculated using estimates of the number of immigrants receiving each
government service and average per capita cost of these services. Simon (1989)
used the 1976 Census Bureau Survey of Income and Education and national average
per capita costs of services to estimate immigrant and native costs. After estimating
total tax revenues generated by immigrants and natives, Simon calculated the net
costs. He compared the net costs of immigrants with those of the native population,
and concluded that at the national level the net costs were greater for native
households. His work, however, was on a group of immigrants whose income was
above average. We have estimated that the immigrants in Los Angeles County are
well below average in income.
Several other studies applied statistical techniques to estimate immigrant participation
rates in public services (Blau, 1984; Borjas, 1990; Borjas and Trejo, 1991; Jensen,
1988; Tienda and Jensen, 1986). After estimating these rates, total costs were
calculated based on average per capita service costs. The Borjas (1990) and Borjas
and Trejo (1991) studies established that the more recent immigrants are less skilled
and less successful in the labor market than earlier groups. This trend decreased
revenues and increased costs from immigrants in recent years.
Earlier studies by Blau (1984), Jensen (1988). and Tienda and Jensen (1986)
compared the welfare and social insurance participation rates of immigrants and
natives. These studies covered persons immigrating before 1980. Their findings
showed that immigrants were less likely than natives to become welfare and social
insurance recipients.
The Center for Immigration Studies (1991) used service utilization rates estimated by
Borjas (1990) and Jensen (1988) in a study of undocumented immigrants. The study
70
�Chapter IV
Review and Report on Existing Studies
concluded that public education, Medicaid and corrections constitute 90% of the total
costs of major federal and state programs to undocumented immigrants.
Although these studies provide useful background information, they cannot be
generalized to answer the questions of the present study. The studies covering Los
Angeles County were conducted prior to the implementation of the Immigration
Reform and Control Act of 1986, which provided amnesty to many of the
undocumented persons, and did not use the immigrant categories being used in this
study. These studies did not categorize immigrants in terms of their legal status.
Most of the studies did not do a specific analysis for Los Angeles County, and the
concentration and composition of immigrants in Los Angeles County is different from
that of the nation.
In summary, studies reviewed here suggest that at the national level immigrants have
been generating more tax revenues than the cost of services provided to them, but
that this net gain is shrinking. Local level studies, on the other hand, showed serious
immigrant-caused costs that exceed tax revenues generated by them for local
governments. The studies suggest that the impact of immigration on areas with high
concentrations of immigrants such as Los Angeles County may differ from their
aggregate impact on the nation as a whole.
Other Economic Impacts
In the literature, the major issue regarding the economic impact of immigrants has
been labor market effects. The effects of immigration on the U.S. labor market are
studied by focusing on two main questions: do immigrant workers cause the
reduction of domestic wage rates and do they displace domestic workers from jobs?
Most of the studies show evidence to support the segmentation hypothesis which
claims that the domestic labor market is sufficiently segmented so that native workers
are relatively isolated from the direct employment effects of the immigrants. These
studies reject the hypothesis that immigration causes unemployment (Bean, Lowell
and Taylor, 1988; Bean, Telles and Lowell, 1987; Borjas 1987; Butcher and Card,
1991; Greenwood and McDowell, 1986; Grossman, 1982; La Londe and Topel, 1991;
Simon, 1989, Vedder et al. 1990).
Recent empirical research has suggested that a 10% increase in immigration would
have a -0.1 % impact on the labor force participation rates of white native workers and
a -0.1% to 0.4% impact on the labor force participation rates of black workers. The
same level of immigration would reduce the number of weeks worked by white native
workers by 0.3% and the number of weeks worked by black workers by 0.1%.
Immigration, however, would not affect the total native unemployment rate (Borjas,
1990). Similarly, immigration does not appear to have a significant impact on the
earnings of natives. A10% increase in the size of the immigrant population reduces
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�Chapter IV
Review and Report on Existing Studies
native earnings by 0.2%. immigrants are likely to have a much more adverse impact
on their own earnings than on the earnings of natives. Empirical studies suggest that
a 10% increase in the number of immigrants would decrease the earnings of other
immigrants by at least 2% (Borjas, 1990).
However, it is important to realize that these studies looked at these questions during
economic times that do not reflect current or future economic conditions. It has been
argued in the literature that employment among low-skilled domestic workers will fall
during recessionary periods and that this fall will be concentrated among young
workers (Johnson, 1979).
The net impact of immigrants in the labor market varies significantly across regions
and industries depending on the concentration of immigrants in those regions and
industries. It has been found that the wage-dampening effect of foreign labor
becomes significant once immigrant concentrations in manufacturing goes over 20%
of the workforce (DeFreitas and Marshall, 1984). Studies based on empirical
evidence from Califomia and Los Angeles do not support the existence of a
displacement effect of immigrant workers. On the other hand, these studies show
that there is evidence of wage depression attributable to immigrants (McCarthy and
Vaidez, 1986; Muller and Espenshade, 1985). It has been found that the wages of
white males whose schooling does not reach beyond high school are about 3% lower
than they would be had Los Angeles received no Mexican immigration. Wage
depression in several Industries in Los Angeles which may be attributed to Mexican
immigration varies from 0.3% to 12.6%. This impact is much higher in industries with
larger concentration of Mexican immigrant workers; for workers with no schooling it
is 5% to 30% (Hensley, 1989). It has been suggested that lower wage levels
stimulate manufacturing employment in particularty low wage, labor-intensive
industries by keeping those industries competitive (Heritage Foundation, 1989;
McCarthy and Valdez, 1986; Muller and Espenshade, 1985). On the other hand,
lower wages also lead to lower quality of life, low consumption levels and a smaller
tax base. The overall balance of the impact of lower wages attributable to immigrant
workers would need to be empirically verified for each industry in future research.
Studies have shown that another major impact of immigrants on the U.S. economy
has been the contribution of highly educated foreign-bom persons to high-tech
industries. It has been estimated that over 1.5 million college educated immigrants
joined the U.S. labor force during the 19808. The number of immigrant scientists and
engineers with doctorates has been increasing sharply (Mandel etal., 1992; Heritage
Foundation, 1989). On the other hand, it has been argued that most of the recent
immigrants lack basic skitis and educationrelativeto earlier waves of Immigrants
(Borjas, 1990). This has caused a concentration of new immigrant workers in lowpay less skilled jobs, putting more downward pressure on the employment and
earnings of domestic workers.
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�Chapter IV
Review and Report on Existing Studies
Some have suggested that in addition to their contribution to high-tech industries,
recent immigrants benefit the economy through their entrepreneurship. Available data
suggest that immigrants have a slightly higher propensity (1%) to start new
businesses than native-bom workers (Borjas, 1990). Some studies have shown that
the new wave of immigrants has a high tendency to open businesses, create new job
opportunities, boost exports, revitalize regions and contribute to economic growth
(Mandel et al., 1992; McCarthy and Valdez, 1986; Muller and Espenshade, 1985;
Portes and Rumbaut 1990; Simon, 1989; Senate Office of Research, 1991; Vedder
et al., 1990).
Other Research Issues
Experts and interested parties submitted numerous comments and suggestions based
on reviews of earlier drafts of this study, some of which we were unable incorporate
in this study because they were beyond the scope of the Board order, and have not
been adequately addressed by existing research on immigration. This section
discusses some of these issues.
In order to study the total impact of immigration, analysis of the long-term costs and
contributions of all immigrants becomes very relevant especially since the size and
characteristics of immigrant streams often vary over time. In this study legal
immigrants who entered the country before 1980 were classified as part of the Vest
of the population" rather than as a separate immigrant category. Additional research
would be required to address this broader issue.
This report confined itself to the household tax revenues generated by the three
immigrant populations being studied and the rest of the population. As owners,
employees and consumers, the residents of the County also have impacts on the
corporations in the County and the taxes and fees that they pay. How to divide the
corporate revenue among the people affecting them is problematic. The issue is
further complicated by the participation of non-County owners, employees and
consumers. To address these issues would require agreement on a theoretical
framework and more data.
Another important research issue is the measurement of non-revenue economic
impacts of immigration in this study. It is a complex area where sophisticated models
and comprehensive data would be needed to account for local economic
characteristics and fluctuations over time. The potential impacts, both positive and
negative, are numerous. Labor-intensive industries like textiles, restaurants and
some of the other service industries may gain advantages from the increase in the
labor force. Prices on labor intensive goods may be lower. There may be job
displacement of non-immigrants by immigrants. There may be downward pressure
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�Chapter IV
Review and Report on Existing Studies
on wages. Sizeable immigration may spur economic growth. Rapid growth due to
immigration may overburden the capital infrastructure.
Finally, an estimation of the costs to the state and federal governments accruing from
the influx of immigrants was beyond the scope of this study. However, in order to
conduct a complete research on the cost of immigration one would also need to
estimate costs to all levels of government. Most of the earlier studies at the national
level have not taken a holistic approach to this issue and instead have focused on
specific aspects of the economy.
Conclusions
• No existing study answers the research questions about the impacts of immigrants
in Los Angeles County, as defined in the Board order. Most of the studies have
found no evidence to show that immigrants displace native workers. However, there
is evidence for wage depression attributable to immigrants, particularly in industries
where immigrant workers are heavily concentrated. The skills and earnings of recent
immigrants have been found to be lower than the skills and earnings of earlier
immigrants. Some economists argue that immigrants, especially through ownership
of small businesses, expand the economy and contribute to the growth of the region.
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�Chapter V. IMMIGRATION RELATED ISSUES
Immigration and the Underground Economy
Findings
Our review of the literature found only a few studies estimating the
participation of undocumented persons in the underground economy at
the national level, and found no studies at the County level.
Research studies have given a broad range of estimates for income
taxes withheld from undocumented workers; nationwide these estimates
have averaged 56%.
Nationwide the tax revenue lost from undocumented persons
participating in the underground economy has been less than 5% of their
total unreported income.
A 1979 IRS study has shown that nationwide the revenue loss from
undocumented persons has been between 1.1% and 1.5% of the total
income tax revenue losses from all persons due to the underground
economy.
Background
In this section we review research on the impact of undocumented persons in the
underground economy on County revenues. There is no single definition of the
underground economy, but the most common definition cited in the literature, and
adopted in this study is as follows: the term "underground economy" applies to ail
activities generating unreported taxable income.
Because of the complexity in conducting an empirical study of the impact of
undocumented persons in the underground economy on County revenues, and
because of the lack of empirical data that would adequately measure it we have
instead limited this section of the study to a review of existing studies. Although both
the literature on the underground economy and the literature on undocumented
persons are extensive, we found only a few studies on the participation of
undocumented persons in the underground economy at the national level, and found
no studies at the County level. During this review we consulted with experts from the
Urtan institute and the Center for Immigration Studies.
75
�Chapter V
Immigration Related Issues
Measuring the Underground Economy
One of the few studies to estimate the participation of undocumented persons in the
underground economy was a national level sector-by-sector study of the underground
economy by Simon and Witte (1982). Their estimates relied largely on assumptions
from North and Houstoun's 1976 study: the number of undocumented persons, the
percentage of employed undocumented persons, and the percentage of employed
undocumented persons whose social security and income taxes are deducted from
their wages. Three major studies (North and Houstoun, 1976: Cornelius, 1977;
Villalpando et al., 1977) concluded that about 70% of the employed undocumented
persons had social security and income taxes deducted from their wages. Simon and
Witte assumed that 27% of the employed undocumented persons were part of the
underground economy.
Using data on the average gross weekly wages of undocumented persons from the
North and Houstoun's study and a 1974 INS study, Simon and Witte estimated that
undocumented persons added $5.9 to $7.6 billion to the underground economy in
1974. Their estimates were very close to IRS' estimate of $5.0 to $6.6 billion in 1976
(Simon and Witte, 1982; U.S. Internal Revenue Service, 1979).
The rate of growth of the underground economy, particularly in comparison to that of
the measured economy, is perhaps of even more interest than its absolute size.
Simon and Witte (1982) estimated that the annual growth rate for the underground
economy was just T little slower than the growth rate of the regular economy. They
a
had no data, though, that would allow them to estimate the impact of undocumented
persons on the rate of growth of the underground economy.
Tax Revenue Lost
Studies also have been conducted to estimate the size of tax revenue lost because
of the underground economy (U.S. Internal Revenue Service, 1983; North, 1988;
Simon and Witte, 1982). A study was conducted by the IRS estimating the
"unreported nonfller income with tax consequences" (U.S. Internal Revenue Service,
1983). It was estimated that the revenue loss from undocumented persons was $100
million. This was less than 5% of their unreported income, because on average their
salaries were lower and families were larger. Much of IRS' estimate was based on
income data secured on undocumented Mexican persons (a low-paid group) collected
by Cornelius, Avante Systems and North (North, 1988).
A previous IRS study (U.S. Internal Revenue Service, 1979) estimated that for 1976
the unreported income was $132 billion, the revenue loss was $35 billion, and the
revenue loss from undocumented persons was $400 (1.1% of the total) to $519
million (1.5% of the total).
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�Chapter V
Immigration Related Issues
Simon and Witte (1982) also estimated that in 1974 the lost federal tax revenue was
$473 to $606 million, the lost state level income tax revenue was $235 to $302
million, the lost local level income tax revenue was $30 to $40 million, and the total
nationwide lost income tax revenue was $738 to $948 million, due to participation of
undocumented persons in the underground economy.
In his 1988 study, North showed that the loss of tax revenue caused by work in the
underground economy varies by tax system and by location in the United States. He
reviewed 21 labor market studies covering recent documented and undocumented
immigrants. These studies showed vastly different estimates of the number of these
workers who had taxes withheld from pay. For example, the estimates for the
undocumented workers having income taxes withheld ranged from 18% to 92%, and
for those having FICA taxes withheld ranged from 25% to 91%. North's average of
all these studies would indicate that 83% of the documented immigrant workers had
taxes withheld, whereas 56% of the undocumented workers had taxes withheld
(North, 1988).
Other Implications
North's (1988) study concluded that violation of labor standards continues to be a
major problem for many foreign-bom workers, that undocumented persons and
women are more likely to experience these problems than documented foreign-bom
persons and men; .that counties along the United States • Mexico border, particularly
in Texas, apparently have more active underground economies and more laborrelated violations than others, such as those in Califomia; and that the role of the
foreign-bom in the abuse of tax systems is probably significant (North, 1988).
It should be noted that more employers of famrvworkers reported to the IRS after
1990, because of the requirement that income taxes be withheld from farm-workers.
Philip Martin (1992) noted that there is much discussion that IRCA increased both the
legal and the falsely documented populations. In addition, IRCA seems to have
increased the number of labor contractors, who are the employers most likely to
under-report income tax.
Researchers have also studied the underground economy in terms of theories of
labor markets. Portes and Sassen-Koob (1987) and North (1988), for example,
noticed the similarity between descriptions of the secondary labor market and the
underground economy, but made a clear distinction between them on the basis of
meeting tax and labor standards.
Other researchers shift the importance of the subject of the underground economy
from a matter of size to its broader function and effects on society (Mattera, 1985;
Qaughan and Ferman, 1987). Qaughan and Ferman (1987), for example, showed
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�Chapter V
Immigration Related Issues
that a wide range ot underground economic activities, like the bartering of goods and
services, are based on kinship and community, mutual obligation and reciprocity, and
thus forming a social bonding.
Conclusions
• Only a few studies estimated the participation of undocumented persons in the
underground economy at the national level, and none at the County level. Based on
national studies, undocumented persons appear to be more likely to be employed at
jobs where income is not reported, but these also tend to be low paying jobs where
the tax rate and revenue loss is also low. The impact in Los Angeles County,
however, may differ from the nation as a whole.
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�Chapter V
Immigration Related Issues
Potential Impact of a Legal Work Permit System
Findings
Our review of the literature found no studies directly dealing with the
impact a legal work permit system would have on Los Angeles County.
Studies evaluating the European experience with guest worker programs
are inconclusive regarding what their impacts would be if implemented
in the United States.
Foreign workers with legal work permits in Europe constitute 10% to 20%
of the total labor force.
Background
In this section we review research on potential impacts of a legal work permit system
patterned after the European experience with temporary work permits. During this
review we consulted with experts from the Urban institute and the Center for
Immigration Studies. We found no study which addresses the potential impact of a
legal work permit system on Los Angeles County.
In the context of .this review, the temn "legal work permit system" is defined as a
system admitting non-citizens for limited terms of employment in the United States.
For example, most European countries have implemented guest worker programs
allowing entry of migrant labor on a temporary basis. There are numerous studies
analyzing the European experience with guest worker programs and evaluating the
introduction of similar programs in the United States (Martin and Miller, 1980;
Reichert and Massey, 1982; Papademetriou and Martin, 1983; Lovell, 1987).
Description of European Work Permit Systems
The term "guest worker policy", as implemented in most of the advanced European
countries, refers to governmental measures that permit foreign-bom persons to be
introduced into the labor market with the expectation that they will not become
citizens and will eventually return home. A guest worker program is usually the result
of a bilateral agreement that details recruitment methods, responsibilities for travel
and housing, and the obligations of host governments to protect migrant workers
(Martin and Miller, 1980; Martin and Sehgal, 1980).
The formation of guest worker policies in Western Europe was largely a by-product
of postwar economic expansion. Over three-quarters of ail foreign workers and their
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�Chapter V
Immigration Related Issues
dependents in Western Europe live in France, Switzerland, and the Federal Republic
of Germany (Martin and Miller, 1980).
Length of Permit: Under most European guest worker programs, employers must
search for native workers before offering jobs to workers from outside the European
Economic Community (EEC). Work permits available to non-EEC guest workers tie
them to a specified job with a given employer during the first year of their
employment. In France, non-EEC and non-Algerian foreign workers receive threeyear work and residency permits upon expiration of their initial one-year permits.
These three-year permits still limit foreign workers to one profession and one region
but the permit holder can move from job to job within his or her profession. After ten
years of permit renewal, foreign workers qualify for "privileged" or ordinarily
nonrevocable residency permits and (prior to 1975) for a permanent work permit valid
everywhere in France for the worker's profession. In Germany, non-EEC guest
workers receive two-year work and residency permits after the first year. Their
freedom of movement was limited for a few years (1976-79) by an administrative
restriction prohibiting a further influx of foreigners into several major cities. After their
first year of residence foreign workers in Germany are free to change employers.
After five years of permit renewal, foreign workers receive five-year work and
residency permits. After ten years, they are eligible for permanent work and
residency authorization. In Switzerland, officials review foreign worker residency
permits yearly. Prior to five years of continuous residency, most foreign workers
receive one-year permits. Foreign workers can change professions upon renewal if
labor shortages exist in professions for which application is made. Afterfiveyears,
a worker receives "preferential" status. Permits then are prolonged for two-year
periods and it is understood that renewal is no longer problematical. After ten years,
nonrevocable resident status is accorded. Job restrictions are dropped for foreignbom persons who have become permanent residents (Martin and Miller, 1980).
Government Invoivement In Switzerland, employers were permitted to contract
directly with foreign workers, who were then granted a work and residency permit
The rapid increase in the number of guest workers in the 1960s, though, led to
government intervention, with the declaration of a ceiling on the number of residency
permits and the establishment of yearly quotas of residency permits for each canton
in 1970, and a drastic reduction of the quotas in 1975. In contrast to the Swiss,
French and German employers requested guest workers through governmental
agencies, which processed the requests and recruited workers abroad. Through
bilateral treaty arrangements, satellite offices were established in labor source
countries. Guest workers were selected from lists of names submitted by tabor
officials in the countries of recruitment The transportation of the workers was
arranged by the two governments as part of the fee paid by employers. In Germany,
the government recognized that the foreign workers were something more than a
"temporary" work force, and implemented a broad program to foster the social
integration of these workers. Germany's decision to halt the guest worker program
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�Chapter V
Immigration Related Issues
in 1973 reflected labor's demands that the further introduction of guest workers be
restricted while the lot of those already in Germany be improved. Unlike the
Germans, in the first decade after the war the French permitted the "regularization
or post facto legalization of undocumented persons or "false tourists". In the early
1970s, though, the government ended this practice and announced a number of
programs that were to ameliorate the social and economic status of migrants. In the
late 1970s, the government began to promote a policy of migrant return to country
of origin (Martin and Miller, 1980).
B
Worker Rights: Although guest worker rights vary by country and type of labor
agreement, most host countries guarantee guest workers therightto organize into
unions, therightto participate in extra-union work councils, and family reunification
rights after one year's employment. In Europe, guest workers pay income taxes and
participate in normally extensive social welfare programs, including social security,
children's allowances, and unemployment insurance. The details vary, but the
general thrust is clear • guest workers are aliens to be integrated into the work force
but not into an immigrant stream eventually leading to citizenship (Martin and Sehgal,
1980).
Access to Citizenship: Access to citizenship varies significantly among the three
countries, with France being reiativeiy open with easier naturalization procedures and
a five-year residency requirement In Germany, even the ten-year residency
requirement does not guarantee the grant of citizenship. In Switzerland, the twelveyear residency requirement a complicated administrative system and the amount of
tax that must be paid has resulted in a low naturalization rate. Although foreign
worker employment followed a downward trend in the mid-1970s in all three
countries, the total foreign populations of these countries remained almost steady due
to family reunification. The children of guest workers bom in Germany and
Switzerland do not automatically become citizens as they would in the United States,
while foreign children bom in France have the option of declaring citizenship upon
their majority (Martin and Miller, 1980).
Foreign Workers' Share of Work Force and Foreign Population's Share of Total
Population: Martin and Miller (1980) show that foreign workers constitute a significant
proportion of the total work force in the host countries: 9.7% in Germany (2,171,000
foreign workers), 10.9% In France (1,900,000 foreign workers), and 19.8% in
Switzerland (533,000 foreign workers) in 1976. Their data also show that guest
workers there had considerably higher labor force participation rates than natives.
The relative importance of the foreign share of the total population in theee countries
(6.6% in Germany, 7.8% in France, 15.8% tn Switzerland), as well as the foreign
percentage of live births (9.7% in France, 16% in Germany, and 29.5% in
Switzerland) represent a demographic characteristic of considerable political
importance (Martin and Miller, 1980).
81 -
�Chapter V
Immigration Related Issues
Lessons for the United States
According to Martin and Sehgal (1980), the most important lesson of the European
guest worker experience was the explosion of the "temporary" myth: temporary
became pemnanent for up to half the migrant work force. The average duration of
stay climbed to over five years. Although most migrants do not initially think of a long
stay abroad, about 50% stay for more than five years (Martin and Sehgal, 1980).
Although not against the implementation of a guest worker program in the United
States, Reichert and Massey (1982) also conclude that there is no such thing as a
'temporary' labor program. They point out that although it may be necessary to
establish a temporary work system as part of any effort to bring the currentflowof
undocumented persons under some kind of control, this move will be an inherently
short-term solution to a long-term problem.
After analyzing the European experience with guest worker programs, Martin and
Miller's (1980) study concluded that although the European programs provided certain
benefits, they also created a number of problems. The study expressed certain
reservations that must be reckoned with before decisions are made to increase the
temporary foreign workforce. Their reservations, based upon analyses of past
American and European experiences with temporary worker programs were: a)
expansion of temporary worker employment will mitigate the undocumented
immigration problem but not end it; b) temporary worker residency is unlikely to be
short-term (a view also shared by Reichert and Massey, 1982); c) temporary worker
policy is unlikely to ensure respectforthe human dignity of migrant workers; d) over
the long run, it is doubtful that the relations of the United States with migrant-sending
countries would improve as a result of an expanded temporary worker policy; and e)
an expanded American temporary worker program will exacerbate the employment
problems of American minorities.
1
Martin and Sehgal point out that administering a 'fair guest worker program may,
paradoxically, increase immigration of both documented and undocumented persons.
Eachflowof guest workers is accompanied by aflowof undocumented persons that
varies by country of origin (supply pressures) and ease of entry. In Europe, the flow
of undocumented persons is estimated at 10 to 20% of the flow of documented
persons (Martin and Sehgal, 1980).
Martin and Miller (1980) presume that large-scale guest worker programs contributed
to the reduction of undocumented immigration to Western Europe. However, they
also show that undocumented immigration to Western Europe has persisted despite
large-scale guest worker programs and comparatively strict enforcement measures.
Employers of undocumented workers in Western Europe are subject to heavy fines
and citizens can be required to cany identity papers. In the French case, there was
massive undocumented immigration until 1972 in spite of legal procedures giving
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�Chapter V
Immigration Related Issues
foreigners relatively easy access to the French labor market Even assuming an
American program issuing between 500,000 and 800,000 temporary work permits per
year, then, such a policy will not end undocumented immigration. Significantly, during
the American-Mexican bracero program (1942-64), the major experiment to date in
the United States with a guest worker policy, undocumented migration and a program
providing for the legal employment of temporary workers were not mutually exclusive.
In 1954, for instance, there were 300,000 "legal" bracero workers and still over one
million apprehensions of undocumented persons. Indeed, it has been argued that the
bracero program had a "magnet effect" for undocumented migrants (Martin and
Miller, 1980).
Miller (1987) and Lovell (1987) conclude that Europe's experience is relevant for the
United States and that it shows that employer sanctions can work. Reviewing the
often misinterpreted European experience with sanctions, Miller finds that
enforcement did in fact lag at the outset in France and the Federal Republic of
Germany because of poor interagency cooperation, insufficient enforcement
personnel, mild penalties, and indifference among some public prosecutors and
judges, leaving some outside observers to conclude that sanctions had failed. But
France and Germany began toughening enforcement and penalties in the early
1980s, boosting fines andtighteningcoordination among enforcement agencies and
police. France deployed more labor inspectors and set up new regional enforcement
machinery. To counter poor public understanding and bureaucratic and judicial
indifference, European governments publicized the abuses of employing
undocumented persons and reaffirmed enforcement priorities. They stressed
exemplary action against notorious violators as an incentive for voluntary compliance
and devised new tactics for employers who hid behind dummy fronts or
subcontractors (Miller, 1987; Lovell, 1987).
Lovell (1987) sees the United States as more endowed than Europe with a tradition
of voluntary compliance among employers who, with proper leadership, will come to
accept employer sanctions as a good business practice. He also points out that the
availability of secure, universal identification is the single greatest difference between
the United States and most European countries, and that Western European societies
show that effective tamper-proof personal identification systems are compatible with
high regard for individual privacy and rights.
Martin and Sehgal (1980), however, point out that the idea of sanctions immediately
encounters strong opposition - from employers who do not want to assume a new
duty, from civil libertarians who fear the consequences of an incipient worker
identification system, and from minorities who fear yet another source of
discrimination. To compound these fears, any employer sanction system based on
a counterfeit-proof identification system would affect ajl persons seeking work, not just
undocumented persons.
•83
�Chapter V
Immigration Related Issues
Miller's (1980) analysis of employer sanctions in Western Europe attempted to
illuminate the strengths, weaknesses, and limits of the concept of employer sanctions.
According to Miller, employer sanctions are a possible medium-term solution, or more
appropriately, partial solution to the undocumented immigration problem faced by
industrial democracies; the long-term solution is to be found in policies which
restructure labor markets and industries so as to eliminate the root causes of
undocumented immigration and employment. In a similar way, Lovell (1987) points
out that neither in Europe nor in the United States are employer sanctions a cure-all
for the complex problem of undocumented immigration: they must be used with other
coordinated manpower, economic, foreign trade, and law enforcement policies.
During the late 1970s and early 1980s, there was an increased interest in observing
the Europeans and formulating suggestions for similar programs in the United States.
A Center for U.S.-Mexican Studies publication (authored by Wayne Cornelius before
IRCA) set forth the rationale for a system of temporary worker migration visas, as one
component of a new U.S. policy concerning undocumented immigration, primarily
from Mexico (Cornelius, 198ld). A key feature of the proposed system was its
avoidance of pre-arranged contracts between U.S. employers and foreign-bom
workers. According to Cornelius, the main objective of U.S. policy concerning
undocumented immigration should be to reduce the size of the undocumented
component within the total migratoryflow;this objective would be accomplished by
the provision of temporary work visas (Cornelius, 198Id).
While the Center for y.S.-Mexican Studies emphasized the temporary and cyclical
nature of agricultural and unskilled workers, mostly from Mexico (Cornelius, 1981a,
1981b, 1981c, 1981d), a RAND study on meeting the labor needs of the economy
through immigration, authored by Georges Vernez and Kevin McCarthy (1990), put
more emphasis on professional and skilled labor. According to the RAND study, the
option of meeting the labor needs of the economy with temporary workers (mostly
professional and skilled) is increasingly being used by business, and thus more
immediate policy attention is required. The study suggests that this could be
achieved by reforming the system of temporary visas, including an easement in the
granting procedures.
The RAND study showed that it is very difficult to design effective policy in an
information vacuum; few data are collected on the characteristics of permanent and
temporary immigrant arrivals, and much less on their subsequent labor force
experiences. The study concluded that it is extremely difficult to address the
tradeoffs between permanent and temporary immigrants, since there is no information
available about the socioeconomic characteristics of the various categories of
temporary immigrants and their labor market experience, and there are no
comparative studies on the labor market experience of legal permanent and
temporary immigrants (Vernez and McCarthy, 1990).
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�Chapter V
Immigration Related Issues
Our review of the literature indicates that most of the studies were done in the eady
1980s. This seems to suggest that since the implementation of IRCA there has been
less interest in adopting a temporary work permit system.
Prior to the enactment of IRCA, the use of temporary workers was presented as one
option of controlling undocumented immigration. Some researchers have argued that
instead of uncontrolled undocumented immigration by persons seeking employment
in the United States, a preferred alternative would be to provide for a legal outlet for
the employment of undocumented workers through the issuance of a large number
of temporary workers. Instead, Congress decided to provide amnesty to certain
undocumented immigrants who were already living in the country before 1982 and
to curt future undocumented immigration through employer sanctions and other
strengthened enforcement measures. The Replenishment Agricultural Worker (RAW)
program was established to provide a replacement pool of agricultural workers in the
event that IRCA's legalization and employer sanctions provisions led to a shortage
of farm labor for growers who were highly dependent on foreign labor.
Since IRCA, the policy debate over the use of temporary foreign workers has
centered around the need for skilled, specialized labor. The publication of the RAND
study (Vernez and McCarthy, 1990), for example, suggests a renewed interest in the
field. But whereas early studies emphasized unskilled labor, the RAND study
emphasizes professional and skilled labor. The main policy issue has been to seek
a balance between the labor needs of employers and protection of the rights and
interests of American workers.
in short the various studies have been inconclusive regarding the implementation of
of a legal work permit system in the United States. The impact of such a system on
Los Angeles County will depend upon the type of system implemented and the needs
of the local economy. Among the design issues that would have to be addressed
are: the option between a free agent system or a system of contracting with the
employer before admission; the eligibility of temporary workers for federal, state, or
county assistance programs; protection from adversely affecting wages and working
conditions for similarly employed American workers; protection of temporary workers
from discrimination and employer violations of labor laws; and the duration of
temporary workers' stay in the United States.
Conclusions
• The impact of a legal work permit system on Los Angeles County is uncertain and
would largely depend on the specific design and scale of the system and economic
conditions during implementation.
85
�GLOSSARY
Adjusted Gross Income:
The income of taxpayers as reported by the Internal Revenue Service and the
Califomia Franchise Tax Board. Adjusted gross income excludes such nontaxable sources of income such as welfare income and tax-free interest income,
and partially exempt sources such as pensions and social security income.
Amnesty persons:
Former undocumented persons who were granted lawful immigration status
under Section 245A and Section 210 of the Immigration Reform and Control Act
(IRCA) of 1986. To qualify under Section 245A, "pre-1982 immigrants" had to
demonstrate continuous residence in the United States since prior to January
1, 1982. To qualify under Section 210, "special agricultural workers" (SAWs)
had to demonstrate employment in agriculture in the U.S. for at least 90 days
between May 1,1985 and May 1,1986.
Citizen children of the undocumented:
Children under the age of 18 bom in the United States whose mothers are
undocumented persons.
Costs:
Total expenses incurred providing services (see Net County Cost).
Effective Tax Rates:
The effective tax rate is the percent of total income that is captured by a tax.
This is best defined by an example. The personal income tax rate for both state
and federal governments Increases with income, the last $20,000 is taxed at a
higher rate than the first $20,000. in addition, many taxpayers have deductions
that reduce their taxable income and credits that reduce their tax liability. The
California effective tax rate is the proportion of income paid In state income
taxes by the average taxpayer earning for example $40,000.
Motor Vehicle License Fees fin-Lieu" Tax):
A personal property tax imposed by the State of Califomia on vehicles
registered in the State. The tax is based on the value of the vehicle.
86-
�Glossary
Net County Cost:
The amount of the operation financed by discretionary revenue sources,
principally property taxes.
Payroll Taxes:
Taxes that are paid by an employer for his/her employees, among the largest
of these are unemployment insurance, and social insurance (FICA and
Medicare) and workman's compensation.
Recent legal Immigrants:
Foreign-bom persons who entered the United States since April 1, 1980 who
were lawfully admitted for permanent residence or who are permanently residing
in the United States under color of law (PRUCOL). Persons who have
nonimmigrant visas (e.g., tourists, students, and businessmen) are excluded
from this category.
Tax Incidence:
The proportion of income captured by a tax in an income group.
Undocumented persons:
Foreign-bom persons who are not in the country under a lawful immigration
status and who are not permanently residing in the United States under color
of law (PRUCOL).
Vehicle Registration Fee:
A flat fee charged to register a motor vehicle in the State of Califomia.
87-
�APPENDIX A
Sources of Demographic Data
In this appendix we present an overview of the primary sources of demographic data
used in the study. This is followed by tables showing our estimates for 1990 and
1992. The discussion is not meant to cover the enormous literature on immigrants,
but rather to explain the origins of the data we judged to be the best for our study.
Our choices were very limited because county level data on immigrants is generally
only available from the Immigration and Naturalization Service and the Bureau of the
Census.
Immigration and Naturalization Service
There were three types of Immigration and Naturalization Service (INS) files used in
this study. The first was a file maintained by INS on IRCA amnesty applicants from
which we contracted to have special tabulations done for Los Angeles County on the
age, sex, country of origin, marital status, and application status. These tabulations
were as of February 1992 and were used as our estimate of the amnesty population.
The second INS file came from the Legalized Population Survey conducted in 1989.
This is also known as the "Westat" study because the survey work was contracted
to Westat, Inc. This survey focused on the socioeconomic characteristics of persons
who were given temporary legal status under Section 245A of IRCA. To qualify for
amnesty under this section, a person needed to have resided in the United States
since before January 1,1982. Nationwide the sample was 6,193 and in Los Angeles
County the sample was 2,129 observations. Questions were also asked about family
members with whom the respondent was living. Theee family member questions
greatly increase the number of individuals for whom basic information is available.
The basic variable categories were demographics, language proficiency, immigration
history, employment history, family composition, health services, social services,
education and income. Datafromthe Legalized Population Survey were used to
estimate the income and fertility characteristics of the amnesty population. The post1978 immigrants in this file were used In estimating age, sex, income and fertility
characteristics of the undocumented population.
Seventy percent of the pre-1982 amnesty applicants were from Mexico. Therefore,
to ensure that there would be a sufficient number of non-Mexican amnestees,
sampling was weighted to increase the number of persons from countries other than
Mexico.
•88
�Appendix A
The third type of INS files were Immigrant and Refugee Microdata Tapes. Annual
files are available by zip code of intended residence since 1972, although for Fiscal
Year 1980 and Fiscal Year 1981 over 20% of the individuals are missing data on
some variables. Country of birth, age, sex, marital status, and occupation data are
collected. Income and employment data are not collected. These INS files were
used in making estimates of the number, age and sex of recent legal immigranta.
The aqe distribution, atttateQ^LtormG/rarttsand undocumented immigrants, under
age 18 and age 18 and over, was adjusted so that the total of all the foreign bom
estimates matched the 1990 Census tabulations of the foreign-bom population.
Bureau of the Census
Important data files for our study were produced by the Bureau of the Census through
the 1980 Census, the 1990 Census, American Housing Surveys and Current
Population Surveys.
There were American Housing Surveys taken for the Los Angeies-Long Beach
Metropolitan Area in 1980, 1985, and 1989. The metropolitan area American
Housing Surveys are a sample of about 3,200 housing units. For individuals in the
household questions are asked about age, sex, marital status, race, Hispanic
ethnicity, marital status, and income. Only the 1985 file indicated if the respondent
was bom outside the United States. For housing units questions are asked about
market value, property taxes, mortgage payments, rent payments, structural
characteristics and repair status. These files were used especially to derive
assumptions about homeownership and property taxes.
The Current Population Surveys are monthly surveys conducted by the Bureau of the
Census. The June 1986, June 1988 and November 1989 surveys included
supplemental questions concerning citizenship and place of birth. For Los Angeles
County the number of person records in 1986 was 8,635, in 1988 it was 8,750 and
in 1989 it was 4,484. Approximately, one-third of the population of the County was
foreign-bom during this period, and their numbers in the sample were correspondingly
targe. The data tapes for theee months, however, only have the Income of the
primary family in each household. The data from theee surveys were used to
estimate the income and household characteristics of primary families by citizenship,
place of birth, and for immigrants, year of entry.
The March 1990 survey contained separate income data for all the families and
unrelated individuals in each household. The legal immigrant income was estimated
by averaging the income of foreign-bom Asians and Hispanics weighting for the
relative size of their populations.
-89
�Appendix A
1980 Census Public Use Micro Sample (5 percenti: This sample provided income
and demographic information for all the families in each household, and it contains
data on place of birth and citizenship. It was used to establish baseline estimates of
the distribution of income between primary and secondary families. This was
necessary because the Current Population Surveys which contained place of birth
and citizenship data only contained income data for the primary family of each
household. The distribution was later controlled to the 1990 Census Summary Tape
File 3.
1990 Census Summarv Tape File 3 (STF-3V. This tape contains aggregate tables of
socioeconomic characteristics for several geographic levels, and among these are
counties. The Los Angeles County data were used to adjust our estimates of the
foreign-bom and total population. Our estimates of individual, family and household
income were also controlled so that for 1990 the totals corresponded to the 1990
Census. Although variable categories can be collapsed and summations of
geographic areas are possible, there is very limited potential to analyze the data
except as presented, because what is on the tape is the output of cross-tabulations
not individual, family or household level data.
Background Studies
There were several previous studies that provided useful information for comparison
with our primary data sources. The samples in these studies did not match the three
immigrant groups, and therefore, we were limited in using the findings. Among these
other studies were the following:
Comprehensive Adult Student Assessment System (CASAS) Survey
The CASAS (1989) study is a report presenting the findings of a survey of amnesty
persons. Amnesty applicants qualifying by residing in the United States since before
1982 need to demonstrate English proficiency and a knowledge of U.S. government
and history to attain pemnanent legal residence. IRCA provided federal funds to
assist in providing classes in these subjects to all amnesty applicants. A sample of
4,180 pre-1982*3 and 796 Special Agricultural Workers (SAW) was randomly selected
from the Califomia population enrolled in such classes. Data are alsoreportedon
age, sex, marital status, household composition, and number of children. This report
was used for comparisons with our estimates about ths family characteristics of the
Amnesty population. However, to make generalizations from the CASAS sample is
problematic because it excluded applicants not enrolled In classes. This is especially
90-
�Appendix A
a limitation in the sample of SAW applicants because they did not have to take
proficiency tests.
Chavez' Survey of Undocumented in San Diego County
Leo R. Chavez (1992) has described some of his research on undocumented persons
in San Diego County. A 1986 sample of undocumented persons in San Diego
County was built from "snowballing" contacts with individuals and organizations.
Information was gathered on 1,349 undocumented Mexicans and 1,148
undocumented Central Americans. The variables included age, sex, household
composition, employment, use of social services and home ownership. Chavez'
findings were used for comparisons with our estimates of the socioeconomic
characteristics of the undocumented population. His findings, however, may not be
representative of Los Angeles County, because they are based on a non-random
sample of a different county.
Heer's Study of Mothers of Mexican Ancestry in Los Angeles County
David M. Heer (1990) has described his findings from a study done in Los Angeles
County. A survey was conducted of 903 women of Mexican ancestry who gave birth
in Los Angeles County between August 1,1980 and March 31,1981. Of these 724
were reported to have been bom outside the United States and 179 were reported
to have been bom tn the United States. Information was gathered on fertility, age,
marital status, immigration history, migration status, educational attainment,
employment occupation, industry, income, participation in entitlement programs, and
taxation. We used the findings reported from this study for comparisons with our
estimates of the socioeconomic characteristics of the amnesty population and the
undocumented population. We also faced limits in using the data from this survey.
They are now eleven years old, and it is difficult to eetimate the proportion and
characteristics of this sample which later became part of the Amnesty program.
NALEO's National Latino Immigrant Survey
In 1989 the NALEO Educational Fund published a report of its findings from a study
of legal Latino immigrants. This telephone survey included 1,636 indlviduais
nationwide who were sampled on the basis of being a Latino immigrant who had
become or was eligibie to become a U.S. citizen. The variables Included age, sex,
marital status, reasons for immigration, acculturation, language use, education,
employment household income, home ownership, attitudes toward U.S. citizenship,
voter registration, and perceptions of discrimination. We used the findings of this
study for comparisons with our estimates of the socioeconomic characteristics of
91 -
�Appendix A
recent legal immigrants. The NALEO sample, however, was primarily of pre-1980
immigrants which limited generalizations to the recent legal immigrants.
•92
�Appendix A
Tab* A.1. Total Population of Loa Angalas County
A«a
Oaaitary t. tM2
IMOCanwe
Undar 18
2,326.000
2.505,000
18*
6,537.000
6,682.000
TOTAL
6,863.000
9.167,000
Tabta A J . Estimated Subpopulations of Loa Angelea County, April 1.1990
• " A*
l
TOTAL
47,000
114,000
117,000
118,000
396.000
18*
671,000
455.000
466.000
909,000
2.501,000
TOTAL
716,000
669,000
mooo
1,027400
2,897.000
Under 18
Table A J . Estimated Subpopulationa of Loa Angeiea County, January 1,1982
Under 18
nn
:
|||iiii:;:iSI 3ffi §iiii|II
140,000
118.000
431,000
506,000
599.000
900,000
2,726400
716,000
TOTAL
126,000
671,000
18*
47,000
(32,000
OM0O0
1,101400
1,157400
Table A4. EaUmated CMan CMdran of SubpcpUMon of Loe Angelea County. January i. 199Z
301.000
93
�APPENDIX B
Assumptions In Calculation of Households and Income Distributions
The households that describe each group are built from the number of adults that we
have estimated belong to that group and the social and economic description that we
have constructed of the households in which those adults live. Following is a
description of the data sources and the calculations that generated the household and
family income counts.
Amnesty Population
The primary data source on the IRCA population is the Westat Legalized Population
Survey. The Westat survey, however, did not have all the required data. This was
supplemented by other sources, defining as closely as possible a comparable
demographic group. From the Westat survey was obtained the distribution of adults
by household income and age of household head, the average number of
families/unrelated individuals per household, the average income of families/unrelated
individuals and the labor force participation rate.
Undocumented Population
*
To estimate the economic and demographic characteristics of the undocumented
population we have looked at the characteristics of the most recent amnesty
immigrants (those who migrated to the United States after 1978.) The majority of the
amnesty population is Hispanic and we assume the same is true for the
undocumented population. The 1990 Census indicates that the Hispanic population
has a higher household size than the general population. The amnesty population has
an even larger household size than the overall Hispanic population, and we have
assumed that the same is true for the undocumented population.
The Westat data did not indteate any real differentiation between the post and pre1979 populations. In the revenue model, we assumed the undocumented to be a
slightly younger and lower income population than the amnesty population.
-94
�Appendix B
Recent Legal Immigrants
Our assumption is that this population will be slightly older and higher income than
the other two immigrant populations. The basis for this is the assumption that the
population will contain significant numbers of immigrants who were already in Los
Angeles when they received their legal immigrant status. Another group of these
immigrants will be those who were admitted because they are skilled workers. Finally
there will be a significant proportion of legal immigrants from countries with higher
educational levels, and these workers should be in higher paying occupations than
the above two groups. Because the group is generally young, however, and has a
significant number of unskilled workers we assume the income level is lower than that
of the general population. We constructed an income distribution of the composite of
the hispanic and Asian populations in the 1990 CPS and that distribution was used
as a guide in constructing the income and age characteristics of the recent legal
immigrants.
Rest of the Population
The remaining population group is calculated as a residual. The 1990 Census and
the 1990 March CPS were used to construct the same age and income distributions
as were constructed for the immigrant populations. The immigrant populations were
then subtracted from the total population to yield the 'ail others" group. Shown in
Tables B.1 through B.4 below, is the distribution of adults by income and the
average number of .adults per household that are used in the revenue model.
•95
�Appendix B
Table B.I Assumptions of Income Distribution and Household Size
Characteristics of Recent Legal Immigrants
RECEN T LEGAL IMMIGRANTS
Household Income
Distribution of
Adults
Adults per
Household
Less Than $ 15.000
18.6%
2.3
$ 15.000 - 29,999
30.8%
2.5
$ 30,000 - 54,999
31.8%
3.0
$ 55,000 - 79,999
13.2%
3.3
$80,000- 129,999
4.4%
3.5
$130,000 or More
1.2%
3.0
2.74
AVERAGE
Table B.2 Assumptions of Income Distribution and Household Size
Characteristics of Amnesty Population
AMNESTY POPULATION
Less Than $ 15,000
$15,000 - 29,999
$ 30,000 • 54,999
$ 55,000 - 79,999
$ 80,000 -129,999
$130,000 or More
25.9%
42.8%
25.9%
4.8%
0.6%
0.0%
AVERAGE
30
.
40
.
41
.
40
.
31
.7
-96
�Appendix B
Table B.3 Assumptions of Income Distribution and Household Size
Characteristics of Undocumented Persons
UNDOC2UMENTED PERSONS
Household Income
Dfstrfbution of
Adults
Adults per
Household
Less Than $ 15,000
30.7%
2.7
$ 15,000 - 29,999
39.7%
3.1
$ 30,000 - 54,999
28.6%
4.2
$ 55,000 - 79,999
1.0%
4.5
$ 80,000 - 129.999
—
—
$130,000 or More
—
—
AVERAGE
3.21
|
Table B.4 Assumptions of Income Distribution and Household Size
Characteristics of All Other Persons
ALL OTHERS
"•''"SJSKSE. •
HousshoM'liN^^
Less Than $15,000
12.1%
1.3
$ 15,000 - 29,999
15.8%
1.7
$ 30,000 - 54,999
29.2%
2.0
$ 55,000 - 79,999
21.8%
2.5
$80,000- 129,999
14.4%
2.6
$130,000 or Mors
6.7%
2.8
1
2.01
|
AVERAGE
97
�Appendix B
Assumptions In the Calculation of Taxes
Income Taxes
Income taxes, both Federal and State, are assessed on the family or unmarried
individual. We are assuming, as indicated by both the Westat survey and the CPS,
that immigrant households are more likely to contain 2 or more families than are other
households. We, therefore, computed taxes for one family household and for each
tax unit in multi-family households. From the CPS we determined the distribution of
households by number of families. Similar data were available from the Westat
survey of the amnesty population, although little information was available about the
amount of income in secondary families. Using these data as a guide and controlling
the number of households to the County total households as of January 1,1992, a
matrix of household composition/income distribution was constructed for each of the
four groups.
The income data describing these groups is total Income. From this we must get to
taxable reported income. Some sources of income are not required to be reported
(some examples are tax free interest income and welfare income) and some income
that is reported is not taxable. In the model, we try to account for both these factors.
First the model estimates how many potential tax paying units actually file tax
returns. A study that reported on tax withholding for immigrants was done in 1988
by David North. The North study summarized a group of studies conducted both in
the U.S and Mexico and reported that the average of these studies would indicate
that 56% of undocumented workers and 83% of documented immigrants have taxes
with-held from their wages. Both the amnesty population and the recent immigrants
are assigned the 83% rate while the undocumented are assigned the 56% rate. In
this study we used that as a proxy for the percentage who file tax returns. For the
"ail other' group we estimated that 95% file tax returns.
It should be noted that the actual rates of tax compliance are largely unknown. Many
of the people who do not file are not required to file because their Income ia below
the statutory filing requirement In each group we assume the lowest rates of
compliance are at the lowest Income levels. Some researchers, looking at tax
compliance by employment sector report that in the sector known as informal
services, which includes domestic workers, child cane workers and gardeners, only
20% of Income is reported for personal taxes. While immigrant workers represent a
significant proportion of this sector, they also represent large proportion of workers
in manufacturing, where tax compliance is high.
-98-
�Appendix B
Not all income is required to be reported for tax purposes. Welfare income, disability
income, and tax free interest, are among the sources that are not in Adjusted Gross
Income (AGI). The model assumes adjusted gross income represents 95% of total
income at the lowest income levels, and for the highest income groups we assume
that AGI represents 80% of total income. Those over 65 years of age have lower
rates of reporting since Social Security income is only partially taxable at the federal
level and completely tax free at the state level.
Finally, of those who file, not all have taxable income. For federal income taxes a
single person with less than $5,500, or a married couple with less than $10,000
income, is not required to file a tax return. Social security income for low income
families is not taxable. Welfare and disability income is not taxable. The limits are
even more generous at the state level. Many people at these income levels file a
return to obtain a refund, either of taxes withheld or the refundable credits available
from both the state and federal governments. Even for those who have incomes high
enough to requirefilingof tax returns many have no taxable income because of
credits and exemptions. This is especially important at the lowest income levels. We
calculated the percentage of tax returns, by income group, that were taxable as
reported by the IRS and FTB. Effective tax rates for those with taxable income were
calculated from published IRS and FTB data. High income taxpayers paying
alternative minimum taxes tend to inflate the effective tax rates at the lowest AGI
levels. The tax rates at the lowest levels were calculated using tax rules for a family
at the lowest incomes. Taxes paid were then calculated by multiplying the effective
tax rate by the family income for each age/income and demographic group.
Social Security Taxes
Social security taxes are, in a sense, both an income tax and a payroll tax. In this
model the entire social security/medicare tax is assumed to be paid by the worker.
The combined social security and medicare tax rate (nominal) is 15.3% for the first
$55,550 of income in 1990. The hospital portion of the social security extends to the
first $130,000. For wage and salary employees, half the tax is actually paid by the
employer. Both the amount paid by the employer and the employee is based on
wage income, but only the employee's portion is subtracted from take-home pay. For
self-employed workers, the entire amount Is calculated on net income. Because
employees thus have some non-taxable income, for social security purposes, there
is a discrepancy in the tax rate of wage and salary workers compared to the selfemployed. The IRS thus allows the self-employed to deduct half of the selfemployment tax and to pay an effective tax rate of 14.1%. While all these
complexities cannot be accounted for in this model, we have applied a social security
tax rate of 14.1% for wage and salary income. Not all income is earned income
however, especially for higher income individuals. In the model we have assumed
99
�Appendix B
that workers earning less than $15,000 have only wage and salary income.
Thereafter, the proportion of income that is wage and salary income declines so that
at about $50,000 about 85% of income is wage and salary income. After the
maximum contribution is reached ($10,800), the contribution stays constant and the
effective rates continue to decline with income.
Another factor that affects the contribution of individuals to social security is source
of income. Unearned income sources, such as interest income, welfare income, rent
and royalty are not taxable for social security. To have earned income one must be
in the labor force. Several sources were examined to determine labor force
participation rates in these groups. Both the work of George Borjas (1990) and Leo
Chavez (1988) indicate that males in the documented and undocumented groups
have labor force participation rates comparable to that of United States male natives.
All the sources indicate that labor force participation rates for female immigrants are
lower than for native females. The net result is that the overall labor force
participation rate of immigrants is somewhat lower than that of non-immigrants. By
contrast the Westat survey indicated that the amnesty population has a higher labor
force participation rate than the general population. We applied the Westat rates to
the amnesty and the undocumented populations. No age specific data was obtained.
Labor force participation rates for California's White and Black population (W/B) are
used in the model as a proxy for the "all Others" group and the Asian/Hispanic rate
is used as a proxy for the recent legal immigrants. Data were obtained for these last
two age/ethnic groups from the 1990 CPS. For the population aged over 65, the
same labor force participation rates were assumed for all groupe.
100
�Appendix B
Table B.5. Labor Force Participation Rates Assumed in the Model
Age
Recent
Legal
Immigrants
Amnesty
Populatfon
Undocumented
All Others
20-34
.78
.83
.83
.80
35-64
•74
.83
.83
.74
65+
.13
.13
.13
.13
Source: 1988 CPS, Califomia and the Westat Survey
Thefinalparameter to be considered in calculating social security taxes is whether
the employed person is in a job for which social security taxes are collected. The
primary group of jobs excluded from social security coverage are government jobs.
The Employment Development Department of the State of Califomia indicates that
in 1990,12.5% of the jobs in Los Angeles County were government jobs. The 1990
Census indicated that about 12% of the population is employed in government jobs.
Some government workers, however, are covered by social security. Federal workers
hired after 1986, some State and City employees and non-credentiaJed school
employees are all covered by Social Security. It is assumed that no undocumented
and few IRCA workers are employed in government jobs. This has the effect of
concentrating those exempt jobs in the other two groups. It is difficult to know how
this translates into persons covered, however, since a person may hold two jobs, one
in a covered sector and one in an uncovered sector. The assumption is made that
9% of the "recent legal" and 10% of the "other" groups are employed in exempt
sectors.
Property Taxes
The property tax calculation is done on the household unit A household in our model
is composed of one or more adults. The average number of adults per household
is shown Tables B1 through B4. The property tax calculation is based on the income
of the household. Lower income households are assumed to pay a higher
percentage of their income in property taxes than does a high income household,
although high income households will on average pay a higher total amount or
property tax. For renter households it is assumed that only half the property tax is
paid by the renters, the other half being paid by the owner of the property. The same
proportion of income allocated to property tax is used for each of the four population
-101
�Appendix B
study groups (Recent Legal Immigrants, Amnesty Population, Undocumented
Persons, and All Others). The proportion of income that goes to property tax does
however vary by age group. The basis for this assumption is that, especially for
owners, the younger households would have bought the property more recently and
therefore have fewer benefits from Proposition 13. Elderly households on the other
hand will pay a higher proportion of their income in property taxes than do the middle
aged household, simply because incomes goes down on retirement.
The initial allocation was based on the work of Robyn Philips (1988) which indicated
that the above segmentation by age, but not by income. The average for each age
group was assigned to the middle income group in each age group. To scale by
income within an age group, published data from the Los Angeles sample of the
American Housing Survey on property taxes paid by income group served as a guide.
tie proportion of income that was assumed to go to property tax is shown in Table
B.6 on page 103.
102-
�Appendix B
Table B.6 Proportion of Household Income Paid to Property Tax
By Age of Household Head and Income
Head Aged less than 35
Income ^ ' •• • T
Proportion to
Property Tax
Less Than $ 15,000
0.04
$ 15,000 - 29,999
0.03
$ 30,000 • 54,999
0.025
$ 55,000 - 79,999
0.022
$80,000- 129,999
0.021
$130,000 or More
0.018
Head Aged 35-64
Less Than $ 15,000
0.03
$ 15,000 • 29,999
0.025
. $ 30,000 • 54,999
0.022
$ 55,000 • 79,999
0.02
$80,000- 129,999
0.016
$130,000 or More
0.011
Head Aged 64
Lees Than $15,000
0.035 |
$ 15,000 - 29.999
0.03
$ 30,000 - 54,999
0.029
$ 55,000 - 79,999
0.025
$80,000- 129,999
0.02
$130,000 or More
0.015
Let Pl-the proportion of income paid In property tax as shown in Table B.6. For each
age/income group within the four populations the property tax paid is then calculated:
103
�Appendix B
Owner HousehoWs:
Number of Owner Households- Number of Households in
Population/Age-head/lncome Cohort x
Ownership Rate of Cohort
Property Tax- Number of Households in Cohort x
Average Household Income x PI
Renter Households:
Number of Renters-Total Households in Population/Age-head/lncome
Cohort - Number of Owner Households
Property Tax-Household Income x PI x 0.5
(Assumes that half the tax is paid by landlord)
Table B.7 gives average value of property taxes paid by household income as
calculated by the above method. Remember in these results that the lowest income
category is primarily composed of renters and thus the taxes paid on the average unit
occupied by the household is higher than the average tax paid by the households.
Table B.7 Average Value of Property Taxes Paid
By Household Income
MdPwNOQMhoitf
Less Than $ 15,000
$227
$15,000 - 29,999
$407
$ 30,000 • 54,999
$746
$ 55,000 - 79,999
$1170
$ 80,000 • 129,999
$1501
$130,000 or More
$3193
[
Lottery and Excise Taxes
These taxes were allocated on a per adult basis in each population, making them the
most regressive of the taxes in the study. The excise tax rates, for both the federal
and state revenue, were obtained from the State Board of Equalization. The total
amount of tax collected was obtained from the Governor's Budget and the Presidents
Budget for the current year and allocated to Loa Angeiee County on the basis of
-104
�Appendix B
population. The amount derived from each group was then ailocated as a percent
of the adults in each population. For the lottery, the amount of revenue collected in
Los Angeles was obtained from the Lottery Commission. Half of the lottery revenue
is distributed to winners so only the half that is kept by the state was included as
revenue.
Vehicle License and Registration Fees
These taxes were allocated to Los Angeles County on the basis of the percentage
of all automobiles in the State of California that are registered in Los Angeles County.
Within the County these fees were distributed between the three immigrant groups
based on the estimate of household income spent on automobiles. That percentage
was calculated based on income reported by the 1990 Consumer Expenditure Survey
conducted by the U.S. Bureau of Labor Statistics.
105
�AODenCix 3
Table B J . Estimated Revenues Collected from Los Angeles County Subpopulations
by Government Agency and Revenue Source, Fiscal Year 1991-92
Recent Ugai
bnnlgrants
Amneety
Populatton
Undocumented
Population
Raatof the
Population
TOTAL
Property T o
County
$54,100,000
$45,200,000
$35,000,000
tliX.800.000
Other Local
TOTAL
•WiofTax
$58,800,000
$112,900,000
3.96
$49,200,000
$94,400,000
3.31
$38,100,000
$73,100,000
2.57
$1,338,700,000
$2,569,600,000
90.16
$1,484,900,000
$2,850,000,000
100
SaleeTax
State
County
Cities
LACTC
TOTAL
% of Tax
$236,900,000
$1,700,000
$36,200,000
$37,900,000
$312,700,000
5.26
$266,900,000
$1,900,000
$40,800,000
$42,700,000
$352,400,000
5.93
$168,700,000
$1,200,000
$25,800,000
$27,000,000
$222,700,000
3.75
$3,830,500,000
$27,000,000
$585,800,000
$612,900,000
$5,056,300,000
85.06
$4,503,100,000
$31,800,000
$688,700,000
r20.50c.000
$5,944,100,000
100
Payroll Tax
FICA
Unemploy Inaur
TOTAL
% of Tax
$553,000,000
$32,500,000
$585,500,000
4.65
$592,600,000
$34,800,000
$627,400,000
4.96
$320,500,000
$16,800,000
$339,400,000
2.70
$10,427,400,000
8612.800.000
$11,040,200,000
87.67
$11,893,600,000
$699,000,000
$12,592,500,000
100
Income Taxaa
Federal
% of Tax
State
M>of Tax
$557200.000
2.89
$118,900,000
2.29
$201,300,000
1.04
$41,900,000
0.81
$72,300,000
0.36
$17,200,000
0.33
$18,429,200,000
95.69
$6,010,300,000
96.57
$19,259,900,000
100
$5,188,200,000
100
Vehicle Ltcenae Fee
Slate
$40,600,000
% of Tax
S.28
$39,900,000
5.17
$31,100,000
4.04
$659,600,000
65.53
$771,400,000
100
Vehicle Reglatratlon Fee
State of Tax
$19,700,000
%
5.2C
$19,300,000
5.17
$15,100,000
4.04
$319,700,000
85 Si
$373,800,000
100
QaaollneTax
Federal
State
TOTAL
H of Tax
$34,400,000
$30,300,000
$64,700,000
5.26
$33f800f000
829,800.000
$63,600X100
5.17
826,400,000
823,300,000
$49.7004300
4.04
8599.300.000
$482,900,000
$1,052,200,000
88 J 3
$654,000,000
$976,300,000
$1.230400400
100
CxdeaTaxae
Federal
State
TOTAL
H of Tax
$35,500,000
$23,300^00
$56,800,000
7.S7
$47,200,000
178,200,000
10.06
$39,200,000
825,800,000
869,000,000
6JS7
8347.100400
8227£00 jOOO
$675400400
7440
$466400.000
8308,000,000
$777400400
100
Lonary
State
% of Tax
$16,700^00
7J7
$2Z200,000
I0i)6
$18300.000
8J7
$163J00400
7440
$221400,000
100
$1^12,600^00
$909,700^00
$461,100 xno
$«7,100X)00
$132,700^00
•477.300,000
8298,700400
836^00,000
8B0.900M0
8904,100^)00
$30,375400400
810,704,700400
$1^57400400
82337400400
$44,875400400
$32,975,400400
$11.941,900400
$1496400,000
$2494,100,000
$46^06400.000
FEDERAL
STATE
COUNTY
OTHER LOCAL
TOTAL
Souw
169.800^00
$133^004X0
tl387JOOjOOO
VjMQjeooxno
RtvtnM ModM
106
�Appendix B
The FICA Tax
The FICA tax Is the single largest tax paid by low income workers. Table B.9, below,
shows the percent of total taxes represented by FICA for each of these population
groups and the per capita contribution of each group without the FICA tax.
Table B.9. Population and Per Capita Taxes, With and Without FICA Contribution
Category
Legtf
AiiUNily .
Poputaton
Undocumented
Poputattofl
FICA as % of
Taxes Paid
30%
39%
36%
Per Capita Tax
Contribution
With FICA
Per Capita Tax
Contribution
Without FICA
Al
Other*
TOTAL
23%
24%
$2,189
$1,504
$943
$7,051
$5,348
$1,545
$923
$606
$5,410
$4,054
This distinction is important because the FICA tax is different from other taxes in that
it does not go to pay for the costs of public services but rather is being placed in a
trust fund for each worker, to be paid back to the worker on retirement The social
security system switched from a "pay as you go" system, where the current workers
were paying for the retirement of past workers, toward a "pay your own way" system
in the 1980s. The new system is building a large surplus in anticipation of the
retirement of the large baby boom generation. Theoretically, each generation Is now
paying for a large portion of Its own retirement The FICA tax is, however, the most
regressive of the major taxes. Because only the first $55,000 of earned income is
taxed, low income workers pay at a higher rate than high income workers. In payout
however, the Soda! Security tax is progressive. A low income worker will have a
Social Security income of about 70% of his working income, while the social security
income of the high income worker will represent 25% of his pre-retirement income;
but both pay in at a 14% rate. It seems reasonable that most of the amnesty and
recent legal immigrants will eventually daim their soda! security contribution. How
many of the undocumented workers will in the future draw upon their social security
contribution is unknown. To the extent that they do not daim this money, their
contribution is a net gain to other workers.
107
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-112-
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-117
�ATTACHMENTS
- 118
�ATTACHMENT A
BOARD OF SUPERVISORS MOTION ORDERING STUDY OF
IMMIGRATION IMPACTS ON LOS ANGELES COUNTY
A- 1 •
�ft'ZO
MINUTES OF THE BOARD OF SUPERVISORS
COUNTY OF LOS ANGELES, STATE OF CALJFORN.A
0T
Larry J. Monteilh, Executive Officer
Clerk of the Board of Suoervisors
383 Hall of Administration
Los Angeies. California 90012
Chief Administrative Officer
Director of Health Services
Director of Public Social Services
Superintendent of Schools
Director of Mental Health
Director of Children's Services .
Director of Community and
Senior Citizens Services
At i t s meeting held December 3, 1991, the Board took the
following action:
47
Supervisor Dana made the following statement:
"Growing concern exists regarding the aounting
financial implications of providing welfar* and
other government benefits to an expanding
population of undocumented aliens, their citizen
children, and persons from other States who
migrate to California.
"In Los Angeles County, for example, we are
currently providing AFDC benefits to approximately
117,000 citizen children of undocumented aliens
(23% of our total AFDC caseload) at a cost of $318
million with a County share of $8 a i l l i o n . These
children qualify for AFDC on the basis of need and
on their citizenship, which ia granted to a l l
persona born in the United States, regardleee of
the status of their mothers. Although foreign
born non-citizen parents and children ar* not
eligible for AFDC, they do qualify for health,
education and other types of government services.
(Continued on Page 2)
- 1-
- A-2 -
�Syn. 47
(Continued)
"What int ensifies this situation i s that
starting in May, some 700,000 aliens i n
Los Angeles County legalized under the 1986
Immigration Reform and Control Act w i l l become
e l i g i b l e for f u l l public assistance benefits,
Some 25,000 of these amnesty aliens already
receive l i a i ted Medi-Cal for emergency and
pregnancy re lated services through Department of
Public Socia 1 Services.
"Clearly, these numbers indicate a potentially
massive increase in demands on existing County
resources. There i s every reason to believe that
increased demand w i l l erode existing resources as
caseloads increase for the adults and children of
the newly migrated, and newly legalized aliens.
"Given that r e a l i t y , i t i s incumbent on t h i s
Board to be kept informed of both the f i s c a l
effects these changes w i l l generate, end what
steps we can immediately launch to offset these
costs which have been mandated i n large part as a
r e s u l t of federal actions. Immediate action i s
necessary because the past has demonstrated that
congressional members representing the eastern
two-thirds of the United States do not comprehend
the f u l l scope of the problem."
Harry Pachon and Valerie Navarro addressed the Board.
After discussion, Supervisor Dana made a motion that the Bo
instruct the Chief Administrative Officer and the Directors of
affected Departments to determine the cost and overall impact
the County for providing welfare, health and other services to
undocumented workers, their c i t i z e n children and the
newly-migrated, as well as to amnesty a l i e n s soon to be e l i g i b
to receive benefits.
(Continued on Page 3)
- 2-
�Syn. 47
(Continued)
Supervisor Molina o f f e r e d an amendment to Supervisor Dana's
motion t h a t the Board i n s t r u c t the Director of I n t e r n a l Services
in c o n s u l t a t i o n w i t h the Chief Administrative O f f i c e r and
Directors of a f f e c t e d Departments t o :
1.
Determine the cost and o v e r a l l impact t o the
County of p r o v i d i n g welfare, health and other
services f o r undocumented persons, t h e i r
c i t i z e n c h i l d r e n , the newly migrated, as w e l l
as amnesty persons soon t o be e l i g i b l e t o
receive b e n e f i t s , including examining these
costs r e l a t i v e t o the costs of services
d e l i v e r y t o a l l County residents;
2.
Estimate a l l tax and fee, including, but not
l i m i t e d t o , b e n e f i t assessments, ticlcets,
l o t t e r y sales, u t i l i t y surcharge, sales, and
property tax revenues t o a l l respective levels
of government from t h i s population,
concomitant w i t h service e l i g i b i l i t y and
demand;
3.
Estimate a l l revenues already accrued t o the
County and a l l other levels of government from
the r e c e n t l y documented Amnesty (IRCA)
population d u r i n g the period p r i o r t o Kay 1991
d u r i n g which time County service d e l i v e r y t o
the Amnesty population was l i m i t e d by Federal
law;
4.
Review and report on existing studies,
including but not limited to, research from
Rand, the Heritage Foundation, the Center for
U.S. Mexico Studies at UC San Diego, San Diego
Community College, and UCLA's School of Social
Welfare and ongoing research of the economic
costs and benefits that the undocumented
population i s estimated to bring to the
County, including a review of studies on a l l
taxes and fees paid by undocumented
populations to each level of government
r e l a t i v e to services received from that l e v e l ;
(Continued on Page 4)
- 3 - A-3 -
�Syn. 47
(Continued)
5.
Develop a system that w i l l allow for written
expert testimony on this issue; and
6.
Provide a report to the Board within 180 days
with an interim report due in 90 days.
Supervisor Dana accepted Supervisor Molina's amendments.
Supervisor Antonovich offered an amendment to Supervisor
Dana's motion to include in the report:
1.
The impact that a legal work permit system
patterned after England and other European
countries would have;
2.
The cost of the underground economy;
3.
The cost to individual School D i s t r i c t s , the
Justice System and the Probation Department;
and
4.
An inventory l i s t i n g of those using Public
Housing within the entire County; also include
Allen Nelson, the former Director of the
Immigration and Naturalization Service and a
representative from the Fair Immigration
Reform Coalition to also be involved in the
study.
Supervisor Dana accepted Supervisor Antonovich's amendment
After further discussion, i t was the consensus of the Boar
instruct the Chief Administrative Officer to provide a report
within 30 days, outlining the methodology and sources to be u
to conduct the study.
Therefore, on motion of Supervisor Dana, seconded by
Supervisor Molina, unanimously carried, Supervisor Dana's
aforementioned recommendations were adopted, as amended.
11203-2.com
Copies distributed:
Each Supervisor
County Counsel
Aud i t or-Contro H e r
- 4 -
�ATTACHMENT B
PROPOSED METHODOLOGY FOR STUDY OF IMMIGRATION
IMPACTS ON LOS ANGELES COUNTY
B-1
�COUNTY OF LOS ANGELES
CHIEF ADMINISTRATIVE OFFICE
1 « "Q.
March 12, 1992
To:
Eacn Supervisor
Frcrr,:
Richard B. DixonJ ^ T ^ t
Chief Aamimsirative Office/-^
Sucjecr.
STUDY OF THE IMPACT OF UNDOCUMENTED PERSONS AND OTHER
IMMIGRANTS ON COUNTY COSTS AND SERVICES
On December 3, 1991, the Board directed that a comprehensive study on the impact of
immigration on tne County be undertaken. The study is to estimate the cost and overall
impact on County services, estimate revenues to aii levels of government, review and
repon on existing studies, estimate the cost to school districts, estimate tne impact on the
underground economy, and inventory use of pubiic housing in the County.
The Director of the internal Services Department (ISD) wfll coordinate the study overall.
My office will assist in collecting needed information from County departments and outside
agencies for use by the ISD, and we will also provide independent comment on eacn
pnase of the study.
The Board also instructed this office to provide a report, outlining the methodology and
sources to be used to conduct the study. Attached for your review is the methodology
for tne study, which was developed in collaboration with the Department of internal
Services. Consistent with your Board's direction that we consult with interested outside
panies, we also discussed the methodology with Alan Nelson, former Commissioner of
the immigration and Naturalization Service, Valerie Small Navarro of the Mexican
American Legal Defense and Education Fund, and Harry Pachon of the National
Association of Latino Elected and Appointed Officials.
Please contact me, or your staff may contact Mark Tajima at 974-1348 if you have any
questions.
RBD:GK
RJT:jSkvi»v«tf
Attachment
c:
County Counsel
Executive Officer, Board of Supervisors
Director of internal Services
Affected Departments
- B-2
-
WE CONSERVE PAPER - COPIES OP THIS DOCUMENT AM TWO-SIDED
�Re
Marcn 6,
PROPOSED METHODOLOGY FOR STUDY OF
IMMIGRATION IMPACTS ON LOS ANGELES COUNTY
On December 3, 1991. the Board directed me conduct of a comprehensive study cr
impac of undocumented persons, their citizen children, the newly migrated, and arr.r
persons. The County departments and agencies, whicn will play an active rcie .n
st-cy. include:
internal Services Department
Chief Administrative Office
Department of Children's Services
Department of Health Services
Department of Mental Health
Department of Public Social Services
Probation Department
Department of Regional Planning
Sheriff
Assessor
Treasurer and Tax Collector
Public Library
Community Development Commission
Superintendent of Schools
Countywide Criminal Justice Coordination Committee
The study will include: estimates of the cost and overall impact of immigration on th
County; estimates of revenues to all levels of government from the County's immigrar
populations, including amnesty persons; a review and report on existing studies on th
economic and fiscal impact of undocumented persons; an estimate of school distnc
ccsts: an analysis of the impacts of the underground economy and of a legal work permi
system; and an inventory of uses of public housing,
Prpject Managgment/coprflinatlgn
The internal Services Department (ISD) will coordinate the overall study. The Chiei
Administrative Office (CAO) will assist in collecoon of information from other County
departments and outside parties and will provide independent comment on each phase
of the study. Given the scope and complexity of the study, the participation of many
County departments, as identified above, is required. Departments providing direct
services will assist in identifying costs and data pertaining to the populations they serve.
The proposed methodology, including a oreliminary listing of sources, follows:
WE CONSERVE PAPER - COPIES OF THIS DOCUMENT ARE TWO-SIDED
�Step 1.
Literature Review and Identification of Available Data
fo..-^
The internal Services Depanment will conduct the technical review of existing studies.
The review will include all the studies specified in the Board order: Rand, Heritage
Fcurcation, me Center for U.S. Mexico Studies at U.C. San Diego, San Diego Community
Cc:iege. and UCLA's School of Social Welfare. In addition, with the assistance of the
Courrys Pucnc LOrary, and outside experts, other studies will be identified. The review
will fcc-js on recent studies of immigrant populations in California and will include research
on the underground economy and on potential impacts of a legal work permit system.
The review will clearly distinguish the types of immigrant populations which were studied
and assess the applicability of research findings to our study. The CAO will provide
independent comment on the literature review.
Data will be gathered from all levels of government including, but not limited to, the
following:
Federal
Bureau of the Census
Immigration and Naturalization Service (INS)
Department of Health and Human Services
Department of Labor
Congress
General Accounting Office
Internal Revenue Service
Office of Management and Budget
Department of Finance
Health and Welfare Agency
Franchise Tax Board
Board of Equalization
Commission on the Lottery
County
Chief Administrative Office
Department of Children's Services
Department of Health Services
Department of Mental Health
Department of Public Social Services
Probation Department
Treasurer and Tax Collector
Public Library
- B-3 WE CONSERVE PAPER • COPIES OF THIS DOCUMENT ARE TWO-SIOED
�Countv fCont.)
Community Development Commission
Sheriff
Assessor
Countywide Criminal Justice Coordination Committee
Superintendent of Schools
This phase of the study is made more difficult and time-consuming because cf the limited
actual data on the County's legal and undocumented immigrant populations. What
current County-specific data is available tends to be piecemeal and often is unpublished.
Even the actual number of legal immigrants in the County is unknown because they are
not required to report current addresses to the INS. Moreover, the immigration status of
persons are not identified in the Census, and detailed 1990 Census data on foreign-bcrn
persons have not yet been released.
Step 2.
Consultation with Experts and Interested Parties
During this phase, there will be consultation with experts in the areas of immigration,
public finance, and demography and with other interested panies, who will be identified
by ISD and CAO staff. Outside input will be especially sought on research design issues
and elements of the study which rely heavily on non-County sources of information. The
CAO will work with ISD to ensure input from a broad spectrum of outside experts and
interested parties. There also will be consultation with others who are conducting similar
research, including, but not limited to, the following:
Mellon Foundation-funded Urban Institute case studies of the impact of immigration
m selected areas, including Los Angeies County. The Urban Institute is a
nonprofit, multidisciplinary research organization with expertise in not only
immigration issues, but also on public finance, population studies, and
intergovernmental issues. Its staff have just completed its literature review and is
beginning its research phase, which coincides closely with ours.
The current 1991-92 Los Angeles County Grand Jury review of the impact of illegal
immigration on the County, which includes an assessment of the costs to the
County of providing services to undocumented persons. Price Waterhouse has
a contract with the Grand Jury to assist in the study.
Research on tha fiscal impaa of undocumented persons in San Diego County,
commissioned by a State Senate Commrttee on Border issues, which is being
conducted by two San Diego State University professors in conjunction with the
State Auditor General.
The CAO will provide independent comment on the scope of consultation and the results.
WE CONSERVE PAPER - COPIES OF THIS DOCUMENT ARE TWO-SIDED
�Step 3.
Data Collection
The data collection phase of the study is closely related to the review of the literature and
identification of available data sources. County staff have obtained, from the INS. user
taces of a major Federal-funded sample survey of the pre-1982 legalized alien population,
whicn will be extremely useful. Other data on immigrants in the County are also being
requested from INS. in addition to immigration data, data is being collected from County
cepartments and outside agencies, as identified in Step 2. The CAO will assist m
collecting needed information from County departments and outside agencies for use Dv
ISD.
We will provide independent comment on the availability of relevant data.
Step 4.
Data Analysis and Deveiooment of Cost and Revenue Estimates
The data analysis element of the study will be an ongoing process, following the collection
of data. The ISD will have overall responsibility for analysis of data and development of
cost and revenue estimates, while the CAO will provide for coordination with other County
depaaments and outside parties, including coordinating the review and comments on the
estimates. As in other stages of the study, there will be consuitation with outside experts
and other interested parties in analyzing revenue, cost, and demographic data. In
consulting with outside parties, the confidentiality of County records on individuals will b
maintained.
This element of the study will include analyses of demographic, cost, and revenue data,
as described beio*:
Demographics
Because of the lack of hard demographic data on the County's immigrant populations,
a key element of the study will be the development of estimates of the demographic and
socio/economic characteristics of the County's legal and undocumented immigrant
populations. This profile is especially needed for the revenue estimates. The ISD, in
consultation with the CAO and Regional Planning, win prepare demographic and
socio/economic analyses of the County's immigrant populations. These analyses will rely
heavily on existing studies and data sources, espeoaJiy INS data on certain categories
of legal immigrants, and on Current Population Survey and Census data on foreign-bom
persons. County staff will consult with INS, Census Bureau, State Department of Finance,
Urban institute, and other demographers familiar with population data on immigrants.
Services/Cos^s
For a number of major program areas, the department/agency which provides the
services or has a direct working knowledge of the area will play a major role in developing
cost estimates for those services, as specified below:
- B-4 WE CONSERVE PAPER - COPIES OF THIS DOCUMENT ARE TWO-SIDED
�Program Area
Lead Aoencv
Hearth Programs
Mental Health
Welfare Programs
Chiiaren's Services
Justice System
Deoartment of Heatth Services
Depanment Mental Health
Depanment of Public Social Services
Department of Children's Services
Countywide Criminal Justice Cocrdir
Committee (CCJCC)
in these program areas, some actual utilization or survey data exists which can be ;
m developing cost estimates. For example, certain costs for services provided by
Depanment of Heatth Services, Depanment of Mental Health, Depanment of Public SServices, and Depanment of Children's Services to newly legalized aliens are curn
identified by the County in order to claim State Legalization Impact Assistance G
(SLIAG) funding. In addition, actual caseload data is available on immigrants' us*
public assistance programs (e.g., Aid to Families with Dependent Children) for wi
immigration status is a condition of program eligibility.
For other services for which no data exists or which are equally provided to all Coi
residents, cost estimates will be developed based on the demographic profile of
County's population.
Rgygnyes
No actual^ data is collected on taxes and fees paid by immigrants. The use of a sami
survey of'the County's population to estimate tax revenues is not feasible. Even if it w*
possible to draw an unbiased random sample of the total population, the reliability
survey responses would be questionable. This is because many, if not mo
respondents may not know how much they pay in various taxes (e.g., sales and exci
taxes), and may be reluctant to reveal detailed information on their finances aj
immigration status.
Based on a preliminary review of the research literature, it appears that the best apprc :
to estimating revenues is to base them on a comparison of the relevant demographic a
socio/economic charactenstics of the immigrant population with tax incidence data,
tax revenue model will be developed by ISD with which to estimate major tax revenue:
which account for the bulk of total tax revenues paid to respective levels of govemrr
it is noteworthy that personal income taxes and social insurance taxes (e.g., the Soct
Security payroll tax) together account for over 80 percent of total Federal tax revenue;
while personal income and sales taxes together account for over two-thirds of total Stat
tax revenues, and the property tax is, by far, the biggest source of County tax revenues
To the extent possible, the effects of immigrants on the overall economy, including th
underground economy, will be taken into account in the revenue estimates.
WE CONSERVE PAPER - Cfl£l£S OF THIS DOCUMENT ARE TWO-SIOED
�•6 •
The revenue estimates will be more complex than the cost estimates, and the review of
the existing research literature and consultation with outside experts will be especially
important in the development of the revenue estimates.
The CAO will provide independent comment on each element of the data analysis,
including demographics, services/costs and revenues.
Step 5.
Preparation of Draft Report
ISD staff will prepare a draft of the final report following the completion of the data
analyses and final cost and revenue estimates. The CAO will comment independently on
the draft final repon content and findings.
Step 6.
Request for Public Comments
Following completion of the draftfinalreport, the draft report will be circulated for public
review and comment prior to submitting the final report to the Board on June 3, 1992.
Simultaneously, the CAO will submit independent comments on thefinalreport.
Step 7.
Submission of Final Report
ISD will submit the final report to the Board. The CAO will submit independent comments
at the same time.
3/12/92
- B-5 WE CONSERVE PAPER - CQElH OP THIS DOCUMENT ARC TWO-SIDED
�ATTACHMENT C
LETTER FROM STUART E. GOTHOLD, SUPERINTENDENT OF
LOS ANGELES COUNTY OFFICE OF EDUCATION
-C-1 -
�^ Z /
L O S A n g e l e s C o u n t y Office of Education
St.in ( Coi^o o
February 19, 1992
Richard B. Dixon, Chief Administrative Officer
Chief Administrative Office
County of Los Angeles
713 Hall of Administration
Los Angeles. CA 90012
L,* , s
8 «. ,
C
#
Dear Mr. Dixon:
On January 17, 1992 you requested that the County Office of
Education coordinate the development of cost estimates for
school districts within the County. This request was part of a
December 3, 1991 Board of Supervisors instruction to you that
County departments conduct a comprehensive study of the
impact of immigration on Los Angeles County. We are sorry to
inform you that our Office cannot materially help you in this
pursuit, for several reasons that are enumerated below.
First, unlike departments of County governmsnt. the Los Angeles
County Office of Education's most immediate client base is other
organizations (school districts) rather than individuals. A
primary function of this Office is to advise and assist school
districts whose daily business Is the teaching of this County's
youth. We do not maintain a student level data base of detailed
demographic information on public school students in this
County; each school district has its own studsnt information
system.
Second, school districts art prohibited by law from collecting
information relating to immigration status. Tht United States
Suprtmt Court has rultd in P/y/arv. Dot (457 US 202, 1982),
that undocumented children and young adults have tht same right
to attend public primary and secondary schools as do United
States citizens and ptrmantnt residents. In addition to this
right, undocumented students have in obligation undtr stats law,
as do all othtr studtnts, to attend primary and secondary
schools until they reach a mandated agt.
- c-2 9300 imptnai Highway. Oownty. CiRfomu 90242-2890 (3101 922-6111
�More specifically to the current request, public schools a
prohibited from engaging in practices which may chill
of access to public schools as established by Plyi&r
Public schools are prohibited at any time from:
. Requiring students or parents to disclose or document their
immigration status;
• Making inquiries of students or parents which may expose
their undocumented status; and
• Requiring social security numbers of all students, as it may
expose the undocumented status of students or parents.
If a child's school file should contain information exposing the
student's undocumented status, the Family Educational Rights
and Privacy Act (FERPA) and various state privacy acts prohibit
schools from providing any outside agency-including the
Immigration and Naturalization Service-with such information
without first acquiring permission from the student's parents.
Even the act of requesting permission of undocumented par
may have the affect of chilling the student's Plyler v. Doe
of access and, thus, constitute a prohibited practice.
Given these federal restraints, and given our role to act as an
advocats and consul to school districts of this County, we are
unable to comply with your request.
Last, representatives of this Office, including mysslf, have met
several times with Mark Tajima of your staff in an effort to
determine how, if at all, we may assist you. it was brought to
Mr. Tajima's attsntion by those outside our Office that data
collected by ths Bilingual Education Office of tha Stats
Department of Education, through its Language Census might be
of soma help to him in his task of estimating documented and
undocumented persons who have migrated here, as well as their
citizen children, and ths amnesty parsons soon to ba eligible to
receive benefits. We hava pointed out to him that this Language
Census data has savers shortcomings which make its use
impossible for ths task before him. To briefly summarize these
shortcomings: the limited-English proficiency (LEP) data that i ^ ^
collected specifies only that a student is not proficient i r ^ P
�English, and the primary language spoken at home. The languaa
Census does not indicate the race, ethnicity or country of origin
of any pupil, nor does it have any information relating to
immigration status, such as citizenship, current legal status of
the pupil (documented, undocumented, amnesty, or otherwise), or
the place of birth of the pupil or his parents.
As we pointed out to Mr. Tajima, many native-born pupils
entering County schools at kindergarten are limited-English
proficient. The percentage of LEP students who were native born,
versus those who immigrated is unknown: the one published
discussion of what percentage of LEP students might be assumed
to be immigrants is not referenced with a footnote (it does not
appear to be based on a specific study), and it is made clear in
that published discussion that it is theirs and anybody else's
guess what the relation is between LEP status and immigration.
We have heard estimates ranging between 5 and 50% of LEPs
being born m the United States. Based upon our study of this
issue, it appears that all information on the relation between
LEP and immigration status is essentially folklore, based upon
whom you talk to, or secondary rsasearch with leaps of faith,
rather than on primary research.
Nonetheless, we provided that public information to Mr. Tajima
at his-request with best wishes that he could find some way to
use it.
Good luck with this project and I hope that we will be better
able to comply with your next request.
S2.1i
Stuart E. Gothold
Supsrintsndsnt
cc:
Janics Crawford
Marilyn Gogolin
Phil Kauble
Jim Parker
Mark Tajima
- C-3
-
�ATTACHMENT D
LETTER FROM CARLOS JACKSON, EXECUTIVE DIRECTOR
COMMUNITY DEVELOPMENT COMMISSION/HOUSING
AUTHORITY
-D-1 -
�February 11, 1992
~Z:
Richard 3. Dixcn, Chief A d n i n i s t r a t i v e o f f i c e r
F?.:M:
Carles Jackson, Executive Directo]
SUBJECT:
IMMIGRANTS UTILIZING PUBLIC HOUSING
This nercrandun i s i n response t o the Board order requesting tha-.
nhe Corr.umty Development Cor.niss lon/Hous ing Authority survey
p u b l i c housing a u t h o r i t i e s to determine the number of various
categories of ir.rigrants (and t h e i r children) who u t i l i z e public
hcus mg.
The public housing authorities' programs are federally funded and
governed by federal regulations. Since 1986, the U.S. Departnenr.
of Housing and Urban Development (HUD) has prohibited public
housing authorities from imposing citizenship requirements on i t s
applicants. On July 31, 1986, HUD issued Notice PIH 86-18 which
indicated that public housing authorities were not to require
applicants or tenants to provide documents regarding citizenship or
alien status.
Subsequent notices from HUD (Notice PIH 86-25, November 24, 1986,
and Notice PIH 87-28, October 30, 1987) stated that public housing
authorities must refrain from inquiring as to citizenship or alien
status of applicants and family members in connection with
selection for admission, or for the purpose of determining
e l i g i b i l i t y for continued assistance. As a result of this federal
r e s t r i c t i o n , no data i s available on the various categories of
immigrants who use public housing.
If you have any questions regarding this matter or require
additional information, please feel free to contact me or Donald J .
Smith, Assistant Executive Director, at (213) 260-2030.
CJ:MQ
- D-2 -
�ATTACHMENT E
COMMENTS RECEIVED ON THE STUDY
These are all the written comments received
relative to the many drafts of the report.
E-1 -
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. fax
SUBJECT/TITLE
DATE
Leon F. Bouvier to Manuel Moreno-Evans re: Study of
Undocumented Persons [partial] (1 page)
05/05/1992
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
OA/Box Number:
1227
FOLDER TITLE:
The Undocumented and the Health Care Reform Plan [7]
2006-0810-F
kc216
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information |(a)(l)ofthe PRA|
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA|
P3 Release would violate a Federal statute 1(a)(3) of the PRA|
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA|
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA|
b(l) National security classified information [(bXl)of the FOIA|
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA|
b(3) Release would violate a Federal statute [(b)(3) of the FOIA|
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA)
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA)
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA|
b(8) Release would disclose information concerning the regulation of
financial institutions [(b)(8) of the FOIA|
b(9) Release would disclose geological or geophysical information
concerning wells [(b)(9) of the FOIA|
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�LEON F. BOUVIER
Mr f * . l M M i | , i O o t f b
V
FAX COVER
Date: Mav 5, 1992
TO: Manuel Moreno-Evans
FROM: Uon Bouvier
RE: Study of Undocumented Persons
You and your stafTare to be commended for the doe job you did given the fact that
you were given such little time in which to complete it and that the data needed for such
a study are so difficult to obtain if they are even in existence! Congratulations and I hope
the County Commission appreciates your efTorts.
My only comment is that you did not take any under counting into consideration.
I realize that you explained your reasons for doing so and I accept them. However, no one
really knows how many undocumented persons were omitted from the 1980 and 1990
censuses. The Bureau assumes that 2.1 million were counted. How many were not counted?
You are correct in going along with the Census Bureau methodology. However,
somewhere in the report, you should make it clear that your estimates are conservative. It
is highly possible that the number could be considerably greater; it is less likely that the
number could be lower than your estimate.
Again, congratulations. Yon did an excellent Job.
�June 10,1992
PHILIP L MAJtTlN
To: ' loannis Pi3sixniS8is-Fax-213-487-7142
From: Philip Martin
:
*
re: Immlifratlon Study
I reviewed the sections of the study that were faxed to me. I agree that
the loss of tax revenue due to illegal aliens participating in the underground
economy is small; I have no reason to quarrel with the estimate that the
majority of illegals have SS and income taxes withheld/ and that if all SS and
income taxes due from illegals and their employers were paid/ the extra tax
revenue would be less than 5 % of what the IRS it now misting.
I have 2 suggestions. First, come mention should be made of the
requirement that income taxes were first required to be withheld from
farmworkers in 1989 or 1990, and that all employers of 500) or more have
recently had to begin to report to IRS on tape or diskette. In the ease of
farmworkers, this has made some employers who used to not reporKfully)
begin to report. There may even be some data available on the number of
farmworkers filing or reported since these changes took effect All of the
estimates discussed in the section are quite old, and there have been recent
rule changes.
Second, there Is surprisingly no discussion of IRCA, Ulcgals, and the
underground economy. There is much discussion that IRCA increased both
the legal and the illegal(falsely documented) pops. In ag, IRCA seems to have
contributed to more labor contractors, precisely the employers most likely to
under-report. This also seems to be true in landscaping etc, so that there may
be the offsetting effects of tax reporting changes increat :\g compliance, but the
rise of contractors and illegals since IRCA decreasing compliance.
I was surprised to see no mention of possible illegals, underclass, and
underground connections. One theory is that illegals hold down wages, thus
driving unskilled U.S. citizens into the underground economy, and that this
indirect effect of illegals is the most important impact of illegals. I think that
such a possibility should at least be mentioned.
On guestworkers, it would help to distinguUh between free agent and
contract systems-does the alien have to have a U.S. employer before
admission or not- and between ixnmigrants(what tht 1990 Act opened up for
professionals), probationary immigrants(what Europe's guestworkers were
and RAWs would have been, l.t., if needed and goad, the alien gets to
convert from temporary to permanent status), and temporary
�workers(regardless of need and behavior, the alien is earning no credit toward
permanent status, as in Kuwait or under the Bracero program). It is true that
it is hard to predict the effects of "a" system on LA, but I think it would be
useful to make a matrix of the possible options in order to illustrate and begin
to evaluate the major systems.
I hope these comments are useful. I am in Wash DC at 202-328-9000
until mid-July, but I would appreciate 2 or 3 copies of the final study sent to
me in Ca.
�Center for Immigration Studi s
For The Study of Immigration in The National Interest
* / • • » • :V-i ( i r » : , i » ( M i r
^•r-«« a / i s j t • « o » ' ' ^ " " f U»0'5"l 0 V J O "
June 25,
1992
To:
loannis P i s s i m i s s i s
From:
David Simcox
Subject:
Los Angeles County Immigration Study
Dear Mr. P i s e i n i s s i s :
Thanks so much for l e t t i n g me see the early drafts of two
sections of the Los Angeles County Immigration Study. Here are a
few comments I have for you based on a very quick reading.
Vndgrground Econgmy
while much of the data you present here on the growth of
underground economy, tax losses, and violation of labor standards
appears accurate at the national l e v e l , anecdotal information
suggests that these trends would be much more pronounced in Los
Angeles County. There would seen to be data available from the
California Department of Labor on the recent efforts to combat the
spread of 'sweat shops' in much of California, particularly in the
Bay area and Los Angeles.
Examination of 286 garment manufacturers, many of w o were in
hm
Los Angeles and Orange County, by c a l i f o m i a labor investigators in
February 1992 found that more than seventy percent were in
violation of some provision such as minimum wage, workers
compensation, c h i l d labor, cash payment and record keeping.
Perhaps the C a l i f o r n i a Labor Department would share with you the
results of these investigations as they affect Los Angeles County.
Substandard labor conditions and poor compliance with tax and labor
provisions have an ultimate cost for Los Angeles County in terms of
revenue lost and public health and safety costs.
Potential Impacts of « T. qal Work Permit System
fl
Worth
noting
is
that
the
Replenishment
Agricultural
1815 H Street. N W Suae 1010 Wasnngton. D.C. 20006-3604 (202) 466-8185 FAX # (202) 466-8076
�Worker(RAW) Program, to cite as an example among temporary worker
programs, resulted in no. additional agricultural workers being
admitted to the United States.
Research conducted by the
Department of Labor and Department of Agriculture, as required by
law, revealed no labor shortage and no justification for the
importation of additional agricultural workers between 1988 and
1991. I t would be in the interest of Los Angeles County to have
similar disciplined, empirical measures to determine the actual
need for temporary workers under prevailing labor market conditions
in the event Congress were to enact such a program.
Clearly the Los Angeles County labor market would be
significantly affected by such a temporary foreign worker program.
Proof for this can be found in the high concentration of petitions
for workers in the Los Angeles area now filed with INS and Labor
under existing non-immigrant temporary worker provisionB(Hl, H2,
H2A) and the similarly large share of the petitions for employmentrelated immigration under the new immigrant categories of the 1990
Immigration Act.
The impact of a temporary worker program on Los Angeles
County's public finances, labor market, and social services depend
immensely on the nature of the workers recruited. I f the temporary
worker population were intended to be a substitute for the labor
supplied by undocumented imnigration, the s k i l l s and earnings
profiles would be similar, with similar consequences for Los
Angeles. If more highly skilled workers were to be recruited, the
implications for Los Angeles' finances and job market would be
considerably different. I would suggest a review of this issue by
using existing temporary worker and employment related immigration
flows into Los Angeles County as a surrogate for the likely numbers
and s k i l l s of temporary workers Los Angeles would get under
another, similar arrangement.
Thank you for the opportunity to comment. I look forward to
seeing the rest of the study.
�Offices ot
ALAN c. NELSON
Attorney At Law
Consultant on Immigration
555 Capitol Mall. Suite 310
Sacramento, Califomia 95814
Phone (916) 442-3700
Fax (916) 444-0606
Former Commissioner - U.S.
Immigranon and Saturalizanon
Service (1982 • 1989)
Consultant - The Federation for
American Immigration Reform
(FAIR)
J
July
8,
1992
Mr. Manuel Moreno-Evans
Project Director
Internal Services Department
Los Angeles County
550 South Vermont Ave.
Los Angeles, CA 90020
Re: County Study on Immigration Impacts
Dear Mr. Moreno-Evans:
On July 1, 1992, I received a draft copy of the study
t i t l e d "Impact of Undocumented Persons and Other Immigrants on
County Costs and Services". In the Board resolution of December 3,
1991, I , as former Commissioner
of the Immigration and
Naturalization Service, was designated as a participant in such
study ordered by the Board. I have had minimal contact with the
study team and the draft was my f i r s t opportunity to see the
preliminary work.
I a writing each of you at this time because there are
m
some serious flaws in the draft report which need to be corrected.
This w i l l require a substantial amount of re-work by the study
tsa=. Since there i s apparent pressure to finalize the report by
the end of July, i t i s important that the decision makers be aware
of these concerns and direct the study team to take appropriate
steps to develop the additional required information before the
report i s finalized.
I w i l l provide a detailed page by page comment within the
next week or two. However, since the major concerns listed below
require substantial re-work, they are addressed immediately.
My comments specifically address the portion of study
relating to i l l e g a l aliens (referred to in the report as
undocumented persons). While many of the same comments would be
applicable to the other categories of immigrants, the illegal alien
category i s the area of major concern to the County, particularly
�as t o what steps can be taken t o reduce the impacts of i l i e
aliens on the County budget and services.
1.
Costs and revenue projections
The d r a f t l i s t s the costs of i l l e g a l aliens to the
County, but f a i l s t o address such costs t o state or federal
governments. On the other hand, the d r a f t l i s t s revenues received
from i l l e g a l aliens from a l l sources - county, state and federal.
To have any o b j e c t i v i t y , the report must deal with "apples and
apples".
Either, only county costs and revenues should be
considered or, i f revenues from a l l levels of government are
considered, costs t o a l l levels of government must be considered.
Los Angeles remains part of the State of California and the United
States of America!
Cost impacts on the state and federal
governments likewise are impacts on the County.
I t i s hard t o know whether there was an interpretation
error or a conscious attempt t o skew the figures by not placing the
costs and revenues i n balance.
I n any event, t o have any
c r e d i b i l i t y , the report must use the same formula f o r both costs
and revenues.
2.
Work Permit System
Supervisor Antonovich asked, and i t became part of the
Board motion passed on December 3, 1991, that a study be made of
f
the European style work permit system. Obviously the purpose o
such request was that approaches be analyzed to document the lega
a b i l i t y to work and to ensure that only legal workers are employe
in Los Angeles county. The report avoids this issue. The Board
should direct the study team to pursue this concept, not only to
look at European models which could be considered for Los Angeles,
but to review other approaches to keep i l l e g a l aliens from working
in Los Angeles and to see that the jobs go to legal workers,
particularly the unemployed and those on welfare. Another aspect
would be to address the Los Angeles City operated Job Centers which
serve i l l e g a l aliens.
3.
Housing
The draft report ignores tha impacts of i l l e g a l aliens in
public housing by hiding behind federal regulations release of
information. Since most of the draft report uses estimates of
i l l e g a l alien population, clearly that approach also can be taken
with respect to i l l e g a l aliens in public housing and the cost
thereof. To avoid this area i s to ignore a significant cost and
impact of i l l e g a l aliens on the County.
4.
N m e of illegal aliens
u br
While i t i s d i f f i c u l t to estimate the number, i t appears
that the 699,000 figure i s most likely quite low. Also, why
699,000 v. 700,000? I t appears that the report i s analogous to a
store advertisement of an item for $19.95, giving the impression
the cost i s less than $20.00!
�5.
Welfare
The r e p o r t i n d i c a t e s t h a t there i s "0 cost" t o the County
f o r welfare b e n e f i t s p a i d t o i l l e g a l a l i e n s . This i s based on t h e
law t h a t i l l e g a l a l i e n s are not e n t i t l e d t o w e l f a r e . Yet, i t i s
obvious t h a t a number of i l l e g a l a l i e n s access the system by: 1)
f a l s e claims of c i t i z e n s h i p ; 2) f a l s e claims of l e g a l residency; or
3) by f a i l u r e of t h e w e l f a r e o f f i c i a l s t o v e r i f y s t a t u s . Some
estimate other than "0" c e r t a i n l y i s required.
Also i n analyzing welfare costs, t h e costs of c i t i z e n
c h i l d r e n of undocumented a l i e n s could be d r a m a t i c a l l y reduced i f
the i l l e g a l a l i e n mother e i t h e r d i d not come t o Los Angeles or l e f t
s h o r t l y a f t e r g i v i n g b i r t h t o the c h i l d , not p l a c i n g the c h i l d on
w e l f a r e . Since t h e i n f a n t c h i l d almost always w i l l accompany the
mother who would r e t u r n t o her county of o r i g j n . t h a t f a c t o r needs
to be c a l c u l a t e d and addressed i n the r e p o r t .
6.
Recommendations f o r Action
While i t i s d i f f i c u l t f o r a study team t o make d e f i n i t i v e
recommendations f o r c o r r e c t i v e a c t i o n , i t i s naive t o have a r e p o r t
on impacts w i t h o u t a t l e a s t a l i s t i n g of the types of actions t o be
considered w i t h respect t o i l l e g a l immigration and other immigrant
categories.
On January 31, 1992 I issued a d e t a i l e d r e p o r t t o
Supervisor Antonovich, c o n t a i n i n g a number of recommendations f o r
County a c t i o n t o reduce t h e impacts of i l l e g a l immigration.
Since t h e d r a f t r e p o r t appends l e t t e r s and comments by
education and housing o f f i c i a l s , I request my r e p o r t of January 31,
1992, be appended t o the f i n a l r e p o r t . As a designated member of
the study group I c e r t a i n l y should be e n t i t l e d t o submit, as p a r t
of t h e r e p o r t , my opinions and recommendations.
I t i s e s s e n t i a l t h a t the study be re-worked, w i t h
a p p r o p r i a t e r e v i s i o n s made, so a c r e d i b l e product can be developed
which w i l l be o f use t o Los Angeles County o f f i c i a l s and others on
the subjects o f i l l e g a l immigration and the impacts of immigrants
on Los Angeles County.
Sincerely yours,
Alan C. Nelson
Former Commissioner
Immigration and
Naturalization
Service (1982-1989)
ACN:ps
•cn0707«.ltt
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DOCUMENT NO.
AND TYPE
002. letter
SUBJECT/TITLE
DATE
Leon F. Bouvier to Manuel Moreno-Evans re: draft [partial] (1 page)
07/08/1992
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b(6) Release would constitute a clearly unwarranted invasion of
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b(9) Release would disclose geological or geophysical information
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�LEON F. BOOVIEfl
^ [co9']
• ; ;•• •".'','1.,
«' •*•
»
[Mr
r*j«
rlBMirio
.D
July 8, 1992
Mr. Manuel Moreno-Evans
ISD/Urban Research Section
550 So. Vermont Ave.
Suite 408
Los Angles, CA 90020
Dear Mr. Moreno-Evans:
Thank you for the copy of your 'finar draft I have read if very carefully, pamcularty the demographic
secdons.
As I mentioned in my FAX of 5 May, you art to be congratulated for undertaking such a task, given
the paucity of appropriate and reliable data.
However, I am concerned that you did not point out that your demographic (and therefore all your
other estimates) were necessarily on the low side. I don't question your methodology. I question the use of
single, rather than a range; of estimates.
On page 20, you state: 'Generally the demographers thought that our estimates of the number of
undocumented were reasonable. They emphasized that then was no way of knowing with precision the true
number, and that the numbers should be used with an awareness of this uncertainty.' But you fail to point out
that your numbers are, by definition, conservative.
In Figure 3, you rely on the census estimate of the number of illegals counted in the 1980 census, as
your stoning point. Elsewhere you correctly explain that it is not possible to take into consideration census
undercounts because they are not sufficiently speafk for your needs. However, you shouldn't confuse the actual
estimated undercounts in the census with the possible omission of illegals derived firm the indirea analysis the
Bureau underook to try to estimate the number of such persons who were aaualfy counted. So one has any
idea how many illegal residents were not counted. Thus your bottom Une number of 699,000 is a low estimate.
Unfortunately, because it is 699 amd not 700, it may well became 'mjlef in the minds of readers and media
as the 'true' number of illegals as of 199Z
Relying on such weak data sauna and methodology as you necessarily must, I would urge to you to
produce a range of estimates and not simply one number that ends up sounding so defbuave. Short of that, 1
would urge you to point out in the report that these estimates an low. The true numbers could be sipiiflcantly
higher, but we can't be certain how much higher.
I hope these comments an of some assistance to you as you try to complete this very difficult
assignment Good tuck.
Leon F. Bouvier
�Mexican American
Lagal Dtftnia
and Eduealional Fund
MALDEF
M4 3outn Jcflpg Strttt
11 m floor
Lot Angciat. CA 9 0 C u
FAX (313! «29 6018
MM
E O
To:
Manual Morano-Evana
fax: 213/487-7142
ISD/Urban Rasaarch Section
550 south Vermont Avenua, Su.^ta 408
Loa Angelas, CA 90020
r
Fr: V.l«i. s n N.v»rro
M
Immigranta' Rights Director
Dt: July 15, 1992
Rat
Comments to draft of lamact I f Ondoeuaentad Persona and
Other Immigranta on Countv casts and •ervleee
Manual, I appreciate tha opportun ty to coaoant on tha draft of
the report. If you hava not already dona so, I think i t i t
crucial to obtain comments on thif draft from academics including
Lao Estrada, David Hayes-Bautiita and Harry Pachon. I will call
you later this afternoon te follov up on these suggestions.
x.
Ttit
thwii ntlaatt
\ 1 MYiaun
Supervisor Molina's amendment to Supervisor Dana's aotlon
instructed tha Director of Internal Sarvicas to "[ajstimate a 11
from this population."
tax and faa (ale)
Although ths ZSD was operating u < er significant tias and
n
financial restraints, i t is s t i l l feasible to estimate tax on
profits made by businesses who emj loy immigrants (sea p. 44) as
well as the revenue derived from Immigrants' dollars in ths
county economy. These are exaaplae of significant contributions
to county revenues that have not l^een accounted for in the
report.
1.
infawiatiee Should be given ior Immigrants Relative to the
Hon-lmigrant Pea of Servioei Among taopla in fovertV
It is clear from studies done by I avid Hayes-Bautista that
latinos undarutilisa services relative to the numbers of people
in poverty.
NaUonti OtflM
SAUtn SBrMQ Slrvtt
iltn Roor
10J AngeiCJ. CA 90014
2«3) «29-:S'2
$43 South DMftom StrM<
Suite 750
Ch.cago. 1180605
'3121 427.9M3
i82S*eer4 Stmi
2na Floor
Stn F'incl»co. CA. 9*^09
'4-5);« «
140 E. Mouaton S U M I
733 Uth Street. N.W.
Suit* 920
Sun* 300
9«n Antomo. Tt 78205
-202) 628-ACT*
Tb« Book BuKdng
�Thm INS data bast it notorioualy i:laccxirata. A 1969 audit •howod
that about 17 parcant of tha data iroo INS cantral alian
inforaation rapoaitory vaa miaaion or incorract. "~
""Xaaigration
Policy and Uw," Vol.4, No.6, Waah: ngton, D.C.: Buraff
Publicationa, p.5, (May 3, 1990). Tha 0 O found that internal
A
docuaantation and ovarfight problaij within tha INS wara tha
cauaa of tha poor racord quality. See, G O Report, Criminal
A
AlilOUl INS' Enforeawent Aettvitlia. (November 1987)
1
1
In addition, i t would be helpful tc include inforaation on h w
o
INS derived its eatiaatea of the a nasty population (see p.15).
x
Use Of Avaraaaa t Per Capita Formujationa
Dividing costs of county services jar capita is inappropriate
where less services are provided ii lover incoaa/high immigrant
neighborhoods (see p. 29). In addition, the use of average cos
per studsnt in calculating aducatidnal costs is wrong,
overcrowded school districts, heavily populated by iaaigrants,
spend fever dollars per child.
D.
The l a p a r t Should laalufle a^eauaa Already aaaruad fee the
Couatv y r i c r ta Wav l i t i # r
ftn^ltT FWTillttgB
O B
Although Supervisor Molina specifldally requested that the
Internal Services Department analyze the revenues from this
formerly undocuaanted population, vas unable to find this
information in the report.
oct
Supervisor Gloria Molina
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
003. letter
SUBJECT/TITLE
DATE
David S. North to Manuel Moreno-Evans re: Comments on "Impact of
Undocumented Persons and Other Immigrants on County Costs and
Services" [partial] (1 page)
07/20/1992
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P3 Release would violate a Federal statute 1(a)(3) of the PRA|
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financial information 1(a)(4) of the PRA)
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA|
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b(3) Release would violate a Federal statute [(bX3) of the FOIA)
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personal privacy [(b)(6) of the FOIA|
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA1
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
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concerning wells |(bX9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
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RR. Document will be reviewed upon request.
�NRHBA
CT/LU
TEL:703-241-i209
Jul 20 92
12:35 No.001 '.01
David •. worth
July 30, 1992
To: Manual Norano-Bvan*,
Projact Director,
ISD/Urban Raaaaroh Saotlon
Suite 408
550 3. Veroont Ave.
Loa Angelea, CA 90030
Front David North
B«i Canmmntm on ^Taparrfc of Ondootmanted P«r«on«
O t h T TmlarftntB on Countv C f l « ^ >«d a ^ r v i o a "
Aa one who ha» struggled with the eubjeet for years, let ae
conaend you and your taaa for a noble effort; you have aasanbled a
vary significant body of inforaation. The aubstancs ia hard to
pin down, and i t la never easy to write a report around an outline
oreated by a lagialatlva body.
That said, let ve maXa three seta of coBaants: l) on tha
•xeoutive suwuryj 3) on tha suggestiona of the other three
conBentatorsj and 3) on other aattars.
Ii Exiratlva aumary.
Zt aaaaa to ba that your study has two
major findingsi
o
County-level revenuee froa the three populations of
interest (1139,100,000) fall far short of net county costs of
these three populations ($94«,705,000).
o These three populations generate about twelve tines as such
revenue for other government levels (federal, stats and local)
as they do for the County of Loe Angalaa.
unfortunately, the current presentation ia such that i t is
hard for the reader to ooaprehand these findinge, particularly the
first one.
Let me quote to you the second paragraph of tha executive
auaaary, t e l l you why I t confused ae, and suggest alternative copyi
•Tha net costs to tha County of providing services t© all
three iaaigrant groups, and to oititan children of
undoouaented parsons in fiscal year 1991-1992 were estiaated
�NQRTH/BIAU
TEL:703-241-1209
Jul 20 92
12:37 No.001 9.C:
to b« 9947 Billion. Tbtsa ooiti ifloludi tdjuitaonts for
intergovarnaantal rovonua roeoivod froa tho 0tato and Padcral
•ouroaa and othar progran inoona. Tha ooata by study group
ars as follovs<
H
This is follovsd by a brsakout of eosts for tha thraa
iTsaigrant groups and ths OflC ohildran of tha undoouaantad; on tha
naxt paoas ara aatiaatas of rtvanuaa produoad by tha thraa adult
populations (tha ohildran, eerraotly, being aaauaad not to provide
any revenue to the County).
Z oould not tall, even after repeated readings, i f "net oosts"
oaused by thesa populations seant gross oosts ainus revenues
produced by these populations. Z hava bean told, by Nancy Bolton,
that tha $946,705,000 i s a total cost, and that the estiaated
$139,100,000 contribution vas not subtraetad froa i t . Further, z
gather that the 9946,705,000 figures represents pniy county funds;
this is also not clear froa tha presentation.
Your teaa sight vant to thinX about the alternative draft
language which you will find on attachaant A. zt oould ba used in
lieu of that part of the report which starts, on page a with the
headlngt "Sstlaatad Costs and Overall Zapaot on County tervioes"
and ends, in tha middle of page 3, vith the little table on the
generation of revenues for tha County.
a. V m Q r « camnmntm.
h fhr
All three of thaa have many useful
reooaaendatlona, and I would encourage you to adopt virtually all
of then.
Tea, Dr. Bouvier i s right* Ranges of estiaataa ara always
batter than hard figures, particularly a hard figure of 699,000.
I suspeot he is right about the eetlsates being eonsarvative.
Yes, Ms. faall ia right that soas of tha laalgrant
populations, particularly thoae barred by lav froa some of the
aervioes, have lover servioe utillaatien rates than tha native-born
poor, z hava suggested to Vancy lei ton SOBS naelflc ways to
incorporate that advioe. and, yes* Ns. faall i s right, Ms. Molina
did ask for some information on earlier contribution to tbe county
by the subsequently legalised. (Theee oontributlons, of oeurss,
should bs noted separately, end not stirred in vith the 1991-1992
fiseal data.)
Yes, INS data on some matters is sloppy, but having worked
with the INI legaliiatlon data sets for the U.f. Oovemaent and the
Ford Foundation over the last five years, Z have found this stream
of inforaation guite reliable* X veuld not, however, even if you
oould, try to calculate the taxaa paid by employ ars of various
groups of inmigrants. The eaployers would have hired others had
tha speolfio lamlgranta not been availablei there is no shortage of
labor in L.A. County.
Yes, Z would secure eatiaatea on tha state and federal oosts
CLINTON LIBRARY PHOTOCOPY
�NOR-h/BLPU
TEL:703-241-120Q
Jul 20 92
12:38 No.OCl P
craatad by tha four populations of Intarett, aa auggaatad by
Comffliaalonar Nalaon. (In this oaaa you Bight ba doing a l i t t l e
more than requested in the Supervisor's minutes — but bosses are
usually not upset i f you do nore work than they ordered.)
Z also agree vith hla point, vhieh Z had arrived at
separately, that to conclude that tha Department of Public Social
Sarvicas ves never outwitted by ineligible, undocumented applioanta
for cash assistancs and Pood Stamps is unrealistic. Similarly, I
agree that aoae estiaatss oould ba Bade of housing utilisation by
these populations, bearing in mind, of oourae, that the waiting
tiaes probably depress the utilisation by newly-arrived immigrants.
My reading of Supervisor Antonovich»s request for inforaation
on a work pemit systaa — unhampered by any direct contact with
his office -- i s different than the Coaaissiener's. zt sounded to
ae like a request to look at the European experience vith
guestworker programs
in tens of a possible urban bracero
program -- rather than a request to know more about eaployer
aanotiona. (Ns. Bolton has ay recent report to tha U.S. Labor
Department on the lack-luetre enforcement of that program, as well
as minimum wage enforcement, in Los Angeles County.)
a. other Mattere. I have Barked up a copy of the aanuscript
with a series of other comments, many technical and/or editorial,
and am returning i t to the teaa. Two matters should be mentioned
here i first, ay calculations of the PICA paynants aade by the
population of intereet would be slightly higher (15.1% rather than
14.1% of earned inooae.)
Secondly, while a l l the other cited
studies are helpful, serious pieces of research, Julian Simon's
utilisation of nationwide 1976 Censua data (on a previous, much
more affluent generation of iaaigrants) should be handled vith
care.
There i s no vay to say this gentlyt he caae to his
conclusion that iaaigrants contribute more the Treasury than they
use in social welfare benefits by a deliberate, slanted selection
of data, in which ha compared the social ooata of a young adult
group of immigrants to thoae of tha entire US population. (Nancy
Bolton has more on thia, as does the current issue of the Center
for immigration Studies' publication aeape.i
X vas pleaeed to have a chance to see this work, and hope that
you send me the final version. The taaa did a lot of very solid
work in a very short time.
Sincerely A*
David s. North
�Offices of
ALAN C. NELSON
Attorney At Law
Consultant oe [mmigntioQ
555 Capitol Mall, Suite 310
Sacramento, Califomia 95814
Phone (916) 442-3700
Fax (916)444-0606
Former Commissioner - U.S.
Immi eration arui Saiuralization
Service (1982 - 1989)
Consultant • The Federation for
American Immigration Reform
(FAIR)
J
July
30,
1992
Mr. Manuel Moreno-Evans
Project Director
Internal Services Department
Los Angeles County
550 South Vermont Ave.
Los Angeles, CA 90020
Re:
Los Angeles County Study on Impacts of
Immigration
Dear Mr. Moreno-Evans:
As a designated member of tha Loa Angeles County Study on
the impacts bt immigration, I submit my specific comments on the
draft report.
On July 8, 1992, Z submitted a latter vith
preliminary comments, noting that there vae eubstantial additional
work to be done on the study. Attached i s a copy of my letter of
July 8, 1992, which i a incorporated by reference and I reiterate
the points therein.
Otfrer general pointa
In addition to the points in my July 8 letter, eeveral
other general comments ara in order:
1. Conclualona
- the report needs to make apacific
conclualona in a number of areaa, particularly on the impacts of
i l l e g a l immigration.
2.
Croaa-referenclna other Studiea and recommendations: In
order for the study to have maximum value to County and outside
readers, there should be a referencing of other exiating and
pending County Studies and othar reports on immigration.
3.
Reconmanda tions or apt lone for action; while there i s
some difference of opinion, Z believe that i t would be valuable for
the report to l i s t a summary of gptiona for action. All of the
participanta from MALDEF to PAIR should hava the opportunity to
�provide such a l i s t of options so that the report can be complete.
The report need not attempt t o evaluate the recommendations.
However by l i s t i n g then, i t establishes a focal point f o r further
action. What i s the b e n e f i t of a report i f i t does not give some
"road map" f o r further action?
Specific CoTmnents
Listed i n columns are the page number of the report, the
area addressed and my comments.
Page
iv
Report peference
Preface
Kelson Comments
Need to follow preface with 3-4
page Executive Summary
1) Need range rather than
specific number. See Bouvier
comments
2) Avoid very specific figures
such as 699,000 when obviously
number i s estimate. I f range
is not used, at least give
general
number-ie
approx imately 700,000.
3)
699,000
figure
see
unrealistically low. See late
comments.
Net Costs
Need to define "net costs'*
- I s i t County share of total
costs, ie. %.
- I f this i s approach, then have
basis for estimate of federal
and i£A£fi ££fi£a.
Categories
undocumented
persons;
citizen
children
of
undocumented persons
-These should be combined (with
separate break out), since the
children ara present only
because of the parant.
-The category ehould read:
"Undocumented $399,979,000
-Undocumented parsons
($308,398,000)
-Citizen children of
undocumented persona
($91,581,000)
�Page
ttapoyt Reference
Nelson Comoa^
2
Costs
Need to add categories for
Stat? COStS and Federa] f n g ^
As noted in July 8 letter, Bust
have "apples and apples"-cannot
count revenues without counting
same costs.
S a l e s Tax
Presume sales tax is included
from later report language;
needs to be noted.
Vehicle License Fees
Should be reference to costs of
i l l e g a l aliens driving such as
accidents, uninsured motorist,
law enforcement and court
costs, etc.
Other l o c a l revenues
generated
Also
need
other
government costs
Total
generated
revenues
For undocumented this figure i s
$897,800,000. On page 2 net
county costs for undocumented
is $308,398. From this format
i t looks like revenues are 2
t i a t * coats for illegals. This
false impression needs to be
corrected by:
1) Calculate a l l federal, state
and other local £2A££ as noted
above.
2) Group the education coats
together vith other coats, so a
true picture of coats i s
presented.
School
Costs
District
This approach properly includes
coets to other county entities.
This i s supportive of ay point
and needs to be followed for
federal
and state
costs.
Following approach noted above,
there should be grouping aa
follows:
"Undocumented $1,030,196,000
- Undocumented children
($367,927,000)
- Citizen children of
undocumentad ($662,269,000)
local
�Laqe
p
6
Underground Economy
Tax revenue loss of less than
5% from undocumented does not
seem credible. This should be
closely reviewed.
Legal Work
System
See comments i n Nelson July 8
letter.
a p Q
rt
Raferenca
Permit
flelsoa Compepty
Public Housing
I do not believe reference t o
court injunction i s accurateI
believe the action i s
strictly
HUD administrative
action.
See comments i n July 8 l e t t e r .
Clearly an estimate i s feasible
and necessary since immigrants,
p a r t i c u l a r l y the undocumented,
have a s i g n i f i c a n t cost and
other impact on public housing.
-At
least
apply the
population % figures
-Since high % of low inco
persons occupy public housi
and most immigrants are 1
income, more accurate to take
population % plus additional
factor.
8
Chart 1
Also need chart f o r education
costs.
9
Census data
As noted, use a ungs, at least
for i l l e g a l s .
9
Definition
Undocumented-should
add,
"
subject to deportation for
being in U.S. in violation of
immigration lava."
15
P o p u l a t i o n
Estimation Methods
I t i s properly noted that "a
series
of
estimates
was
necessary". The report should
note when an estimate or
aaaumption i s used and what
c r i t e r i a i s applied.
Use
rangaa as noted.
Alao usa
"reality factors" such as % o
i l l e g a l aliens in prisons
hospital usage, etc. in
reaching estimates.
�U3S.
Report Reference
Nelson Comments
16
Amnesty Persons
Were number denied amnesty
added to or included i n the
i l l e g a l alien count?
16
17
Undocumented Persons
Report
notes
"indirect
techniques" used to estimate
number of undocumented. This
is reason to use ranges and
"reality factors"
17
Warren & Passel
Review carefully.
i t seems
flawed in i t s reliance on
accurate census and accurate
registrations.
Not sure
adjustments
to above are
accurate.
18
N u m b e r s
undocumented
19
Undercount issue
of
Difficult
to
believe
undocumented level only rose
40,000+ from 1980 to 1992, even
with Amnesty.
This i s reason to use a range
of illegals.
Report
needs
to aaXe a
reaeonable estimate of the
undercount to be credible.
20
Number of children
The.90 figure seems low. I s i t
accurate? Better document the
figure or reviee.
23
Figure 1
The 2.1 million undocumented in
U.S. in 1980 ie unreasonably
low.
In 1970a there ware 1
million border apprehensions
per year. Most experts say 2-3
enter for every 1 caught.
Therefore hard to believe 1980
total of 2.1 million. Batter
document the figure or reviaa.
Utilize range.
25
Figure 3
See other comments regarding
699,000 figure.
�Page
p« rfc Raference
Nelson Comments
26
Studies
Report should clearly note tha
i t does not deal with nonf i s c a l factors. I t should note
that no matter what the revenue
vs. cost factors are relating
to illegal immigration- you
cannot justify illegal activity
in contravention of lavs based
on either real or alleged
economic benefits flowing from
such i l l e g a l activity.
28
Summary of s t u d i e s
(top paragraph)
The summaries listed seem to
suggest the opposite- that
there are more costs than
benefits.
Clarify.
Also
separate legal from i l l e g a l
immigration.
28
Est i o a t i n g
County Costs
Net
Be sure this section i s not
double- counting revenues,
appears this may be the cas
Indicate which departments
actual and which use estimate
ted
figures.
Do same regarding
types of services.
29
Higher
Costs
for
illegal
aliens
(par.3)
This
point
needs
to be
highlighted and also included
in the Executive Summary and
tha Report Conclusions.
29
SLIAG (par.4)
This reference supports need to
also
calculate
state and
federal costs.
30
No
welfare
undocumented
pQ
for
This i s a ridiculous statement
and must be dropped. Estimates
must be made of i l l e g a l s
drawing welfare. I f the report
adopts the finding that there
is no velfara cost for i l l e g a l s
because they are ineligible,
then the report must use the
same logic regarding employment
and revenue as follows:
1) I t i s against the law for a ^ B
i l l e g a l to vor)c in the U.S.
2) Therefore, no illegals work.
�g»gfl
Report nmf ranca
Nelson Commenta
3) Since no i l l e g a l s work, they
have no income.
4) Since they have no income,
they pay no income taxes
5) Therefore, the revenue
projections must be greatly
reduced i
30
Costs
The reference to federal and
state payment and reimbursement
is further reason to calculate
state and federal costs.
31
Table 5
Using
population
%,
particularly for undocumented,
is often unrealiatic.
In
criminal
justice
system,
evidence suggests a higher
percent of i l l e g a l s are "users"
than their % of the population.
In many caaea othar multipliers
therefore should be used.
32
Table 6
Same comments as above. As
noted the "0" figure for Public
Social
Services for
Undocumented must be changed.
I s the $16,164,000 figure for
public social services for
citizen
children
of
undocumented
less
tha
federal/state
contribution?
Clarify.
33
Grand Jufcy
The Grand Jury recommendations
should be addressed, at least
in general terms.
As noted
above, there i s need to add to
the Report:
1) Conclusions
2) Cross references to other
county studies and reports
3) L i s t of options for action
34
Property Tax
Clarify
how
property tax
revenues from illegals are
calculated.
I l l e g a l s usually
are renters. Often there are
aulti families present.
�8
£age
Report Referenea
Nelson Commenta
35
Remittances
Report needs to consider impact
of remittances on
revenue
calculations. i f ft of income
is sent to home country i t i s
not being spent i n U.S.
This
d i r e c t l y impacts sales taxes
and
other consumer taxes,
l o t t e r y expenditures, etc.
36
Revenue Model
2 & 3)
41-43
Table 7 -
44
Low
I n c o m e
Population
and
Revenues
report acknowledges
limi
revenues from study groups,
t h i s properly factored i n a l l
tha revenue calculations?
45
Tax
payments
d i f f e r e n t groups
Include i n Executive Summary
and Report Conclusions
47
Table 12
Combine
Undocumented
and
Citizen Children into single
figure as noted above.
Include the education costs in
the
Executive
Summary
and
Report Conclusions
49
Categorical Programs
Noted that immigrant children
often hava special educational
needs. These extra coats also
should
be
estimated
and
factored in the calculations.
51
Parsons in public
housing unJcnown
As stated previously, estimates
must be made. Since the study
uay
groups are low income a
houeing e l i g i b i l i t y i s
income, a factor of populati
% filiia should ba used.
(par.
n
The basic assumption that taxes
paid are unrelated to immigrant
status except by income seems
contrary t o real world and
contrary to statement i n report
noting that a lower percent of
tax withholding occurs with
i l l e g a l s (pg 63)
The per capita tax items should
be included i n the executive
Summary and Report Conclusions.
by
9
�»jp t Rafaranea
Nalaon Comants
51
Court injunction
Verify t h i s . I believe i t vas
strictly
HUD
adninistrative
action not to inquire about or
bar i l l e g a l aliens from public
housing.
53
Violation of labor
standards
(last
par.)
Such higher violations with
respect to foreign workers adds
costs
which
need
to be
i d e n t i f i e d and estimated: i e .
workers compensation, health
and d i s a b i l i t y , etc.
54-56
Legal Work
System
Permit
See comments i n Nelson l e t t e r
of
July
8,
1992.
The
fundamental point to address i s
mechanisms to assure workers
are l e g a l .
63
Taxes - 2 or more
immigrant
families
in household
In c a l c u l a t i n g revenues, i e
property taxes paid, i s this
considered - for example i f
there are 2 families i n the
household ara each given ^ of
tha
property
tax
paid?
Reasonable
estimates
and
adjustments should be made.
63
Taxes withheld
tha report eta tea "56% of
undocumented workers and 83% of
documented
immigrants
hava
taxes
withheld
form
their
wages".
I s t h i s factored i n
calculations
of
revenue?
C l e a r l y i f only 56% of i l l e g a l s
have
taxes
withheld, tax
revenue estimates need to be
adjusted to cover only such
56%.
Qr
�10
Report Reference
Attachments
78
Nelson Comments
Add Category to Attachments
entitled
"Comments
of
Participants in Study". Each
of the participants should have
the opportunity to submit
specific
comments
and
recommendations to be attached
to the report. As a person
designated
in the
Board
resolution of 12/3/91 directing
the study, I ask that my report
dated 1/31/92 be appended.
MALDEF and NALEO, as informal
participants, even though not
designated, should also be
allowed to submit
written
comments and recommendations
and likewise have them appended
to the report. This approach
presents options for future
consideration
and
action,
without
the Study
itsel
addressing such options.
it
Thank you for the opportunity to comment. I recommend
that a meeting ba scheduled of a l l participants to review and
assess tha commenta received ae wall as to develop proceedures and
timetables to finalize the report.
Sincerely,
Alan C. Nalaon
Former Commissioner
Immigration and
Naturalization Service
ACN:ps
cc:
Each Supervisor
Chief Administrative Officers
Gerri Kariya
Mark Tajima
�D
National Atsodition of Lttlno Elected and Appointed
... and the people who mppo
N M l «»
NALEO Botrd of Ditttton
Hon. Bdwtrt R. RuyOti
Mcm6«i »r Coftfmj
PmHitai. NALEO
A k i Armcndint
Amtfican AMocituon «{
R n t d Ftnoiu
Rudy Beurr*
Con-Col* Compmy
Hon PAM Oi«vu. Poet
HupiAiC Uocted l u t t l OITicnlt
Ntnoftil U4|uc d i e t
Henry C. Oint/oi
CiiMm AMK Mint«<mcm Co
Hon. AAgtlo D«l Toco
New Yen Suit Amrabiy
Rm Di M*nwo
AT*T
Arnold Flom. Prw
A F Enurpruci
Hon. RtAdolph Lunun. Prti
Ninon*! Cuiaa ol Hifi«iiK
Sclkoul ftovd Mereotn
HOB O W M Moltn*
Supemiw
CeuatY of Lot Anpia
Hon. Solomon Oni>
M«itib« of CoafRM
Hon himmlt Puior
Mere tar of C«nftm
Han. BiO Rk*»rt^n
Mtmbtr uf Corypru
Hon Itun* Ro»-UM'.nen
Memser wf Cun«r»i
Hon Riy 0 SMchw
Spc&ur. Nr» hicuco
Howe nf RepnamtititM
Hon E M M * Torrti
Mwrbet of Conimt
Hon. G*M\ VttqueT
Super-i*o*
Orinft CMmy, CA
Hon Mt/y ROK WOent
CMnetlwnmtn
Cuy of Phaern*
HMTY P Piefcon, Ph.D.
NdtAnii Uttaor
XAI.JO
U.S. Citircnship Hoiiine
(WO) 44-NALEO
Caiifornia:
(800) 34-NAl.EO
^ J i i W Garnet Street
July 30, 1992
Mr. Manuel Morano-Evetna
ISD/Urban Rasaarch Section
550 South Vermont Avenue, Suite 406
Los Angelas, Califomia 90020
Dear Mr. Moreno-Evans
I've had the opportunity to review the study "Impact
of Undocumented Persons and Other Immigrants or
County Coats and Services."
I would like to commend you and other staff meal: rt
on compiling such a comprehensive report on sue}
short notice. Tour review of the revenues generatec
by immigranta as well as tha costs gives us th*
insight that while immigrants bring in $4.3 billio
of revenues to the County, the costs to the Countattributable to immigrants is $0.9 billion. In othe
words, immigrants account for a net revenue to th
County of $3.4 billion. This finding confirms a
opinion held by many of us in the immigration field
There are, however, some problems with the study
methodology that skew the findings. These are a
follows I
o Upon review, the legal migration figures t
the County appear low. I realise that you'v
decreased the figures to account for emigratic
but X do not see a comparable figure <
relocation of legal immigrants who listed oth<
metropolitan areas as their point of entry,
not taking this factor into account the 8tu<
underestimates the numbers of IftflAl ixmigran
the County has been receiving and ska
the
figures towards overestimating
t
undocumented immigrant population.
o A email point on this issue. You cite t
NALEO study which finds that esploymsnt, he
ownership and work force participation i
legal immigrants is very high. Findings ii
this study are not taken into account becai
the "NALEO sample was primarily of pre-1!
Q J14CSutei.N E.
Waiiunjion. DC 20002
'•"vn MA. 2136
6S
O*
• 2300 W. Comnww, $t» 204 • J 4 W«i 23th S T
Chka»a.n. M623
Saa Amono, TX T O
U?
(312) 277-1440
(512) JT-MW
Fax 0121 277-1015
• 543 Eigh
New Yo
mi.
Fiui2
�Mr. Manuel Moreno-Evana - page 2
inunigrants." The study however, does not document what is t ^ B
baaia for finding that pre-1980 immigrants have d i f f e r e n t
characteristica than more recent immigrants.
o On page 33 of the study you cite that inter-governmental
transfers, e.g., block grants, are not examined by you. 'yhia
ggbgtflntiaUv rggtilts lQ Untier.rmiflAt ing
ihS. revenues
attributable tfi immigrants. According to the U.S. General
Accounting Office, there are over 50 federal revenue sharing
prograraa that use decennial census figures for the allocation
of federal formula grants. On a per capita basis this
corresponds to $200 per year/per person. If one only uses the
amnesty applicants, recant legal immigrants and other foreignborn population figures, which total close to one million
persons, than i t appears that this study leaves out — at a
minimum— $200 million a year in County revenues attributable
to immigrants. In a decade, this revenue would be $2 billion.
Given the magnitude of these figures, the study needs to take
this revenue base into account.
o My final comment i s on the estimates of the undocumented
population. While the study does cite the studies in this
area,
the documentation gives the impression that the
estimates are more exact than i s warranted. Care should be
taken, and caveats to the reader clearly given, that
numbers associated with the undocumented are based
statistical assumptions that have encompassed wide ranges
error. For example, during the 1980'a, when estimates of the
undocumented population were made to project the need for
State Legalization Impact Assistance Grants, many projections
overestimated the size of the undocumented population by as
much aa 100%.
These are my preliminary comments and I appreciate the
opportunity to participate in this study. Please call m i f you
e
have any questions.
Sincerely,
Harry Pachon, Ph.D.
Director
�Mexican American
Ugai Oaftnsa
and Educational Fund
August 25,
MALDEF
M 4 Soutfi Soong 9ir««t
lllhFloof
(219) 628-2512
PAX (313) 829-8018
1992
Mr. Manual Moreno-Evans
ISO/Urban Rasearch Section
550 South Vernont Avenue, Suite 408
Loa Angelea, CA 90020
Re:
lapact of Undoouaented Persons and other Iaaigrants on
County coets and Servioes
Dear Mr. Moreno-Evans:
Although I understand that you have revised the report since I
received the draft copy, I am subaitting further coaaents based
on that draft because I was not able to obtain a revised version
However, I hope that theee comments will s t i l l be useful.
I think i t would be helpful i f the study oould present the total
cost and benefits to the county of tha general population becaus
i t may ba possible that the general population also takea out of
tha county aora than what i t contributes.
I t la not.clear whether county revenues alao include a l l forms o
immigrants' indirect contributions including tha atate and
federal taxaa Immigrants pay that are then diverted back to tha
county in the form of state or federal payments that are
population based.
Because the estimates for the costs of health services and for
public social services for recent legal immigrants ars actually
for a l l legal immigrants, regardless of date of entry into the
United Statee, the estimate i s therefore too high. Adjustments
should be aade downward or you should prominently point out thif
problem instead of i t being buried in a footnote.
Pre-1981 immigrants are lumped together with non-immigrants.
Instead they ehould have a category of their own. I t is possib
that the contribution of long-term immigrants outweighs the cosof recant immigrants, at least partially.
A child i s considered a oitisen child of an undocumented
immigrants i f one of his or her parents is undocumented. I f on
parent i s undocumented has i t been assumed that the other paren
NatfontfOMo*
634 SoutM Spring S t r w i
l l t n FteOf
Lot A n g * * . C A 80014
(213) 629-2512
FAX: (213) 629-6016
•t.
OfflOM
541 Seutft OMftoorn SlfMt
r/UC (3121 4a7.«J93
I K Swcond StrMt
2nd Floor
U n t-rancwco. CA 94108
(415) 54.1-5596
•AX. (416) 543.4836
T t * Hook SuMing
140 £ Hou«on StrMt
5^^^^ 300
c
733 i s m St
Suit* 020
watMngtor
(202) 828-4
FAX: (202)
S t n AMonto. TX 78205
(812) 224-8476
_
FAX: (612) 224^383
ContnBulion* Are Ta.
�Morano-Evans Lattar
August 26, 1992
paga 2
i s necessarily undocumented? I f so, would the calculations
change i f children who have one legal resident parent are
excluded.
In addition, because not a l l children attend public schools,
there should be some adjustment made for people who use private
schools but nonetheless pay taxes.
Generally, i t would be helpful to see the equations of how
eatimataa ara derived, for example for property tax, in addition
to stating what the source of the equation was.
I hope our these and our prior suggestions have been helpful.
Sincerely,
Valeria Small Navarro
Attorney at Law
Immigrants' Rights Director
cc:
Gloria Molina
�URBAN
2100
M STREET,
N.W. /
I NSTITU
WASHINGTON,
Jeffrey S. Passel
Director. Program (or
D.C.
/
(202)833-7200
Oirect Dial357^73
( 2 0 2 )
Researcii on Immigraoon Policy
August 26, 1992
Mr. Manuel Moreno-Evans
ISD/Urban Research Section
550 South Vermom Avenue, Suite 408
Los Angeles, California 90020
Dear Mr. Moreno-Evans:
Thank you for the opportunity to read and comment upon your study, Impact of
Undocumented Persons and Other Immigrants on County Costs and Services. The
comments included in this letter arefromseveral researchers here at the Urban Institute.
Theyrepresentonly our own opinions and do not necessarily reflect the views of the
Urban Institute.
The study is clearly an ambitious undertaking. &representsa serious attempt to answer a
number of difficult questions concerning immigrants and their participation in society.
We feel that the study is a positive step towards addressing these concerns, but should not
yet be treated as a definitive answer.
The study is somewhat uneven in documenting the assumptions on which the calculations
are based. In some instances, very detailed explanations of all of the steps and
assumptions are very clearly laid out (e.g., the estimation of the undocumented
population). In others, almost no information is given at all (e.g., the distributional
assumptions for some of the agencies). For some of the assumptions, a source is given,
but no details (e.g., the equationforestimating property taxes). Consequently, most of the
assumptions concerning costs are quite difficult to assess.
The overall context of the costs cannot be judged from thisreport.No corresponding
estimates are given for other populations in the county. The various immigrant groups
may be no different from other groups or especially from other groups with similar
incomes and/or numbers of children. For example, it is possible that, as a group, people
with children may generate more costs thanrevenues,especially when compared with
people without children.
�•
August 26, 1992
Page :
Some county funds comefiromstate and Federal payments to the county. Furthermore,
many of these funds are allocated back to the county on the basis of population. Do the
estimates of county revenues include a portion of the state and Federal funds? Obviously,
some proportion of the taxes that generate these funds are paid by the immigrants. In
addition, some portion of these funds received by the county can be attributed to the
presence of the various immigrant groups. If these funds are not included in your
estimates, you have underestimated the contribution of the immigrants.
We have a number of questions concerning the definitions of the target populations and
the impact of these definitions on your estimates:
(1)
Immigrants who entered the country before 1981 are treated the same as
native-bom citizens in the calculations. This group of immigrants should
clearly be included in the study. If necessary, the earlier immigrants could
be treated as a separate category. By excluding the long-term immigrants,
the study almost certainly understates the contributions of immigrants and
overstates the per capita costs. It is very likely that immigrants who have
resided in the country for longer periods have higher incomes and pay more
taxes than the newer arrivals. Also, the earlier immigrants probably have
fewer children and use fewer social services.
(2)
In using the Current Population Survey (CPS) and other government
surveys to characteristics of immigrants, it appears that the study assumes
that allrespondentsto the survey are legalresidents.This is clearly not th
case. Many of the respondents are undocumented; in fact, the CPS is a
principal basis for estimating the size of the post-1980 undocumented
immigrant population.
(3)
A child is considered a "citizen child of an undocumented immigrant" if the
child is a citizen and one parent is undocumented. If the other parent is a
citizen or legal immigrant, the status of the child would seem to be
different Would the calculations be substantially different if children with
one parent who is a legalresidentwere excluded?
The costs of health services and public social services forrecentlegal immigrants are
actually those for all immigrants, regardless of date of entry into the United States. The
cost estimate is therefore too high. These estimates should be adjusted downward.
The various groups have different demographic structures (Le., age and sex composition).
These structures can have differential impacts on some of the assumptions, but in most
cases little attention is paid to these basic demographic differences. For example, the
same age distribution is used for all groups in estimating the school-age population.
Finally, the impaa of immigrants on the economy of the county is given short shrift in
the report Admittedly, many of the effects are very difficult to measure, but they should
�Mr. Moreno-Evans
August 26, 1992
p
;
* '
at least be mentioned. Much of the economic literature on immigrants discusses the
')ob-creaiion effects of immigration. Thus, were it not for the immigrants, the economy of
L.A. county might be smaller, and by more than simply the number of immigrants since
there appears to be a "multiplier effect" of immigrants on empioymenL This effect is
more speculative than others, but there are some effects that are measurable. For
example, many immi grants own their own businesses. These businesses pay taxes and
licensing fees that are not included in any of the calculations. Furthermore, these
businesses often employ other immigrants and natives. By excluding this economic
component, the study understates the contributions of immigrants.
The study attempts to address a very largerangeof issues in a relatively small number of
pages. The actual documentation for thefiguresclearly is much more extensive than what
is presented. The studyrepresentsa significant step toward assessing the impact of
immigrants on Los Angeles County.
Sincerely,
sy S. Passel
Program Director
Michael Fix
Senior Research Associate
Rebecca dark
Research Associate
�Mexican American
MALDEF
034 3oum Sornq Street
Mm Floor
and Educational Fund
Let Angatoik CA 900' *
FAX (213) 629-801«
MM
EO
Tot
Manual Morano-Evana
Fr:
Valaria Small Navarro
Dt:
September 15, 1992
Re:
LA County Study on the impact of immigranta
497-7142
Manuel, I've made some suggestions to the executive Summary. In
addition, tha changes should be made to the body of the study
also. I'm vorklnc on more suggestions, but i thought T nhmi^
get vou these before the end of the dav.
p.2, After tha Demographic Eatlmatae chartt
"Significantly, the Board of Supervisors did not include as part
of the study the more established legal immigrants. There are at
least 500,000 legal immigrants who were not accounted for in the
study because they arrived in the U.S. before April 1, 1980."
p.3, After sentence in last paragraph "The eatiaatea presented
ara oaly for household revenues."
"There was no attempt to calculate the revenue generated to the
County though tha taxes paid by businesses; the multiplier effect
of added jobs through new busineesee opened by immigranta; nor
the effect of added dollars in the County'e economy because of
immigrants. Though these revenues are significant, we were
unable to calculate them due to our own Halted resources and
time. Therefore, not a l l tha revenues to the County are
a»oeuwtoed fully accounted for."
cc:
Gloria Molina
tb:lactycM.MM
National OfBca
634 South Spuxg Strimt
11U> Floor
Lo* Anatfai. CA 90014
213)629-2512
FAX: (213) 829-6016
ft«glOfMi ONtcM
642 Soum O M t o m Stf*«t
Suit* 790
CNeaao. It-WW*
312) 477-9303
FAX: (312) 427-9393
SataMto OtflcM - Sacramento - Santa Ana • El Paao
182 Soeona Strtcl
2f«J Floor
San t-ranewco. CA'j4ias
(4IS) 54.1-5598
FAX (415) >«J.«WS
733 ism Street, i
Trt* Boo* BufMing
Suit* 920
i40E.Mowatofl StaM
Waemnoton. D C JOOO;
Su.lo 300
(202) 626-4074
San Antonio, rx 76206
FAX (202) 3W-«2«>
(512) 224.S476
FAX: (612) 224-5362
Conmbvmonj
Tax Oeo^cfb'*
1
�Mexican Amtrlcan
Legal OafanM
and Eduealional Fund
MALDEF
W4 South Spnng Straci
limFtoor
l e t Anget**. CA 90014
(213)e29-23l2
FAX (213)629 8016
NM
EO
Toi
Manuel Moreno-Evans
Fn
Valerie Small Navarro
Dtt
September 16, 1992
Ret
LA County Study on tbe Impact of Immigrants
487-7142
Manuel, here are some additional suggestions from MALDEF to the
Executive Summary. (Again, as with the other comments I
suggested, changes will also need to be made to the body of the
report.) I hope they're s t i l l useful. Let me know i f you have
any questions. Thanks.
p.2,
F i r s t sentencet
We recommend changing the f i r s t sentence to read: "Revenues,
taxes and fees generated bv household income to a l l levels of
government, however, are estimated."
p.2,
second paragraph:
I suggaat adding the revenue issues that were not analyred; the
paragraph only mentions possible negative factors of immigration.
For example, I auggast adding after the clause "such as:" "the
revenue generated through taxes paid by businesses, the
multiplier affect of jobs added by businesses opened by
immigrants, the effect of added dollars in the County's economy
due to immigrants."
p.2,
Demographic letiaates Chart
I recommend putting an asterisk after the "Citizen Children of
Undocumentad" entry on the chart; and at the bottom of the chart
adding tha following statement:
*
Citizen Children of Undocumented are not immigranta.
Distinctions among classes of U.S. cititene ara prohibited
by the Equal Protection Clause of the U.S. Conatitution.
(Manuel, note that policy decisions made on thia basis are
also illegal.)
National OtNo*
634 Soutti Spring Straat
l l t n Floor
Lot AnoatM. CA 90014
(213) 059-2312
FAX: (213) 629-6016
Raglonal Offlcaa
542 Souin Ooamom Street
Suite 750
Chicaoo. iL 60603
(312) 427-9363
FAX (312) 427.9J93
Sataiuta Office* • Sacramonto - Santa Ana • El Paao
182 Second Sireet
2n0 Floor
San Franeiaeo. CA 94105
(41b) 543-5596
FAX: (415) 543-6235
Tne Boon BwOdino
733 iStfi Street, N.W
140 E. Houaton Street
Suite 920
SuHoSOO
WaaWngton. D.C. 2 X
San Antonio, TX 76205
(202) 628- 0£?
(512) 224.5476
FAX: (202) 393-'206
FAX: (S12) 224-5382
Contribution* Ara Ta« Oedueuw
4
�Morano-Evana M m
aa
September 16, 1992
page 2
p.4
MALDEF suggests that the last two sections of this portion of the
Sununary, Estiaated Revenues, Taxes and Fees te Each Level of
Oevernment, from pages 6 i 7 (Revenues Generated to All Levela nf
ggvernmtnt and Revenues Generated bv the Immigrant Groups to Each
Level of Governments be moved to the beginning of the section on
page 4. This will start this section of the discussion with the
overall picture before breaking down the revenues by level of
government.
In addition, we suggest that you add an underlined sentence (as
you have done with the costs) at the beginning stating: The
three groups of immigrants contributed over S4.3 billion to a n
Levels of government in the vear atudied.
it
p.7, Revenues Generated by the Amnesty Population In their
I n i t i a l rive Years of Legal Status
I think you should add an introductory sentence stating:
"Although, tha amnesty population contributed revenues during
their i n i t i a l five years of legal status, they were not eligible
for the vast majority of social services. In addition, the
revenues reflected in this section are not part of the revenues
discussed elsewhere."
p.11, Beginning of the third to last paragraph that starts "Of
the revenuee . . . "
W suggest that you start this paragraph with an underlined
e
sentence (as you have with the costs): The three ianigrant
qrPUPB contributed over S4.3 billion to a l l levels of government
in the vear etudied.
cc:
Gloria Molina
�National Associirion of Utlno Elected and Appointed Offlc
. . and the people who support t
.
TO: M N E M R N - V N , ISDsA^
AUL OEOEAS
P O : Rosalind Gold, NALEO OlA^
RM
SUBJECT: Estimate of Legal Permanent Residents Living in
Los Angeles County prior to April 1, 1980
DATE: September 16, 1992
As we discussed, this memorandum will set forth an estiaat
for the number of lagal permanent resident immigrants residing 1
Los Angeles County ioroediately prior to April 1, 1980. W believ
e
that tha number of non-citizen foreign-born residents in the Lo
Angeles-Long Beach S S as reported in the 1980 Census, l,172.Si
MA
is
a reasonable estimate of the legal permanent
residen
population (see Attachment 1).
The number of non-citisen foreign-bom residents in the Lo
Angeles-Long Beach S S as reported in the 1980 Census include
MA
some number of undocumented immigrant residents of the S S wh
MA
responded to the Census. However, i t slso falls to Include aoa
number of reaidents in the S S , the "undercount- of the 198
MA
Census; additionally, because legal permanent residents share som
of the characteriatics of those residents most likely to b
<
undercounted (for example, low income and education levels, fea.
of responding to tha Census because of their own or other f 11'
members' immigration status, and difficulties completing English
language questionnaires), the number of those undercounts
residents includes some number of legal permanent residents. 0
;
the national level, according to estimates of demographers such ai
Warren and Passell, approximately 2.1 million undocumento*
immigrants were counted in the 1980 Census. However, the tota:
number of undercounted residents of the nation,
approximate!'
2.6 million exceeded the number of undocumented included in tha
Census. Consequently, we believe that at the very leaat, th
number of undocumented immigrants included in the 1980 Censu
figure for non-citizen foreign born residents equals the number o
legal permanent residents not included in that seme figure bee s
of the undercount, and we believe that i t is very likely th
number not included becauae of the undercount could even excee
the number of undocumented who were included. Assuming, at th
very least, that thoae two numbera are equal, the 1980 Cenaui
figure for non-citisen foreign-born i s a reasonable estimate o
the legal permanent resident population because the number o
undocumented included in that figure ia offset by the number o
legal permanent residents who ere not Included.
Please do not hesitate to call me at (213) 262-8303 if you hav
any questions regarding this eetimate.
I.' S. Cilirenship Hotline
800>a.NAlFn
Caliibrma.
.K00,;.4.\ALEO
(
• MO* Otrntt Suwi
• 701 G. SUMC S.E. • 2»0 W, Cooumrc St* 2M • 364J W « i J
Los Angclft, CA 90023 Wuhingion, D C 20003
S u Antonio. TX 71207
Chicago, IL i
(2I3)2*24J03
(202)546-2536
(312) 2274919
(312) 277.1
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�BOARD OF SUPERVISORS
COUNTY OF LOS ANGELES
wEMee=s of -v«€
GLORIA MO.
XENNETH Hi
iS6 HALL OF AOMINISTPATION LOS ANGELES. CALIFORNIA 90012 ' 974-4111
EDVUNO 0. EOELV
OEANE 0*
GLORIA MOLINA
MICHAEL 0 ANTONOV:
SUPERVISOR. FIRST DISTRICT
October 28, 1992
Mr. Manuel Moreno-Evans
Internal Services Department
Urban Research Section
550 South Vermont, Room 408
Los Angeles, California 90020
Dear Mr. Moreno-Evans:
Comments on the Immigration Study
I f i n a l l y had a chance over the weekend to read the f i n a l
d r a f t . I hate to see the label " f i n a l " because the study
seems to improve with time and exposure to interested
parties. Nevertheless, I have some concerns and suggestions
I'd l i k e you to consider.
I) It's unfortunate that tax revenue/fees from immigrant;
owned and/or frequented businesses are not included. Absent
that estimate for businesses, many of which also employ
immigrants, the revenue numbers are understated. This is
especially the case for county revenue since commercialindustrial property i s 37% of our tax base. Not providing
some estimate of immigrant related business revenue
effectively attributes that revenue to the "rest of the
population" which i s not accurate. I think i t would be more
accurate to come up with some estimate, however rough.
Judging from the Muller and Espenshade (1958) study, i t can
be done, since the costs for services in many departments
were apportioned based on the county's demographic profile,
why not apportion business taxes and fees on that basis?
2) In light of the national debate about immigration and
its impact on the economy, i t would be helpful to enlarge
the "economic impacts" literature review in chapter IV.
While your research necessarily focuses on the narrow issue
of costs and benefits to county government, the fact i s
immigration i s allowed or tolerated for its economic,
p o l i t i c a l and social consequences. I t may well be (in fact
probably is) the case that immigrants as a class are and
always w i l l be a net cost to county government but a net
�-2gain to the county economy. That p o s s i b i l i t y deserves
f u l l e r exploration.
:
3) I think thera- should to be ' , adjustment on the cost side
a
to reflect the $50-50 million the county will receive in
SLIAG • funds as i-einibursement for services rendered to the
amnesty population in Lhc study year FY 91-92.
. ) I -.-.realize the ioiira motion asked you to focus on recent
4
immigrants.: Hov.cver, there will be a natural tendency for
readers and others to generalize about immigrants as a
whole.. The study only covers immigrants since 1980.
However, ycu point out; that in 1980 there were 1.1 million
legal permanent residents in the county. In addition there
were, almost half a million naturalized citizens. Both
groups are arguably immigrants and those s t i l l alive and
living in the county today are paying taxes and using
services. Because 6C the 1980 cutoff this large group of
well over 1 million immigrants ends up being counted in the
"rest of the population" category,. Because they tend to be
older and better off financially/ this group probably pays
more taxes and consumes fewer services than recent
immigrants. At a minimum this caveat: should be made
somewhere (perhaps in an Introduction which acknowledges
some of the methodological and data limitations) because the
bias from not going back before 1981 i s to overstate the net
cost of immigrants.
5) The analysis of school district costs i s the least
satisfactory part of the study. That's because the
limitations of the study's methodology—a cost-benefit
analysis at a point in time—are most apparent here. Unless
one takes a longer, historical view public schools will
always be a loosing proposition, regardless of their ethnic
or economic makeup. Kids don't pay taxes and their parents'
taxes only cover a fraction of the costs, costs that are
very high. Such costs only make sense i f you view them as a
social investment by people and institutions (corporations,
for example) who may not have children yet have an enormous
stake in the next generation of citizena and workers. Newly
arrived immigrants are like children in that respect.
Regardless of their country of origin, society has to make a
sizeable investment in them until they become established
and begin to pay their way. The study's methodology doesn't
allow for this longer view, a limitation that i s compounded
by the exclusion of pre-1980 immigrants. At a minimum i t
would seem appropriate to add some acknowledgment of the
fact that adult immigrants represent human capital and bring
with them the accumulated Investment of their native country
(including advanced degrees in many cases) that helps to
balance the cost of educating their children.
�-36) The above discussion of school, costs raise a basic
methodological limitatibh that I believe should be
explicitly stated in the report. Cost-benefit analysis i s
seemingly neutral or judgment- free.• But in fact i t tends
not to be because Of an implicit-, or culturally based
assumption that things;, that d n - t pay forthemselves are not
p.*
good or are at best suspect.". T I t * s.: important to stress that
the focus of the study i s quite narrow—the costs and
benefits of recent immigrat on to.;coo.nty government in
fiscal year 199i-92. .The cost-benefit to the economy and
society or to higher levels of government i s not addressed.
Nor can we conclude that cost-benef.it findings for the
county will be true .tenyears^ fromnow or were true ten
years ago. The snap sHot, tKe study represents^is being
taken after a decade, that probably saw the,largest influx of
immigrants in the county's history, before those Immigrants
had a chance to establish themflelyes. economically and during
the worst economic c r i s i s thii state-find region have
experienced since the Depression. , ;Given these odds, there
is no way a cost-benefit analysis could show positive
results. The study does document convincingly that the
county i s paying more than i t s f a i r share of the costs of
absorbing the huge influx of immigrants (legal and
otherwise) that federal, policy allows and that federal and
state policy and court decisions mandate that we serve. But
i t does not answer whether immigration has been or will be
beneficial to the larger society and economy. I know you
understand'the distinction but I ' not sure the casual reader
m
w i l l . So I think i t ' s Important to say something up
front-on p 1 of the Executive Summary or in an
lntroduction--that makes clear what the study is riot, as
well as what i t i s .
;
;
I hope these comments and suggestions are taken in the
s p i r i t in which they are offered—as constructive
suggestions and additions to an interesting and important
research report. I appreciate the patience and
professionalism you and your co-workers have displayed. If
you have any questions, don't hesitate to c a l l .
ncerely,
nd
et Deputy
JR/sl
cc:
Honorable Gloria Molina
William F. Stewart, Director
�
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