Immigration Surge Strains State and Local Budgets by $9 Billion in 2023, Says CBO

WASHINGTON — A recent report from the nonpartisan Congressional Budget Office (CBO) reveals that the surge in immigration since 2021 has resulted in a net cost of $9.2 billion for state and local governments in 2023. The influx, which saw around 4.3 million immigrants enter the country during this period, generated approximately $10.1 billion in state and local tax revenue.

Despite this significant tax contribution, expenses related to services for these new arrivals surpassed revenues. The CBO estimates that expenditures for goods and services amounted to $19.3 billion, with a considerable focus on education and shelter provisions.

The reported net cost translates to about 0.3% of overall state and local spending. “State and local governments experienced a dual increase in both tax revenues and expenditures in 2023 due to the immigration surge,” the CBO stated. It further noted that the rise in spending outpaced revenue gains.

In an alternative analysis, the CBO suggested that when factoring in indirect effects, including enhanced property taxes and economic activity, the net loss could reach approximately $9.8 billion. The total increase in spending was calculated at $28.6 billion, while revenues rose by $18.8 billion.

Most of the new immigrants settled in six states: California, Florida, Illinois, New Jersey, New York, and Texas. In public schools nationwide, about 550,000 children, representing 1.1% of students, were immigrants who arrived post-2021. The CBO projected that this increase led to a spending rise of $5.7 billion for public education due to lower English proficiency among these students, necessitating additional support services costing $1.2 billion.

Shelter services also constituted a significant expenditure, with New York, Massachusetts, Illinois, and Colorado collectively spending $3.3 billion in 2023 to provide shelter, food, and legal assistance to the immigrant population.

The Biden administration faced an unprecedented wave of migration at the southern border, the highest in 20 years, in 2021. In response, various programs were initiated to facilitate work permits for migrants and allow them entry while their asylum applications were processed.

Additionally, the Center for Migration Studies has reported that the number of people in the U.S. without permanent legal status rose by 2 million to a total of 12.2 million by 2023, based on recent Census Bureau data.