A Disingenuous Ruling on Immigration

In November, an appeals court stopped the Obama Administration from implementing its executive actions on immigration. This is a volatile issue, to be sure, but it's hard to see the court's reasoning as anything but disingenuous.
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In November, an appeals court stopped the Obama Administration from implementing its executive actions on immigration. This is a volatile issue, to be sure, but it's hard to see the court's reasoning as anything but disingenuous. As the Supreme Court mulls over whether to take up this case, it's worth taking a closer look at what's going on here.

The president's approach was to allow immigrants who meet certain criteria to come forward and apply for the opportunity to work legally. Those who are approved would be temporarily shielded from deportation under programs known as DACA and DAPA--Deferred Action for Childhood Arrivals and Deferred Action for Parents of Americans and Lawful Permanent Residents.

To prevent DACA and DAPA from going forward, 26 states sued the United States government, claiming they would face irreparable fiscal harm if the executive actions are implemented. In a decision that longtime Supreme Court observer Linda Greenhouse called "as cynical an exercise of judicial authority as I can remember," the appeals court agreed with the states.

According to Texas, which is leading the case, the harm the state would face is--wait for it--the cost of issuing driver's licenses to newly eligible immigrants. Processing those licenses costs money, you see.

In legal terms, that claimed cost is what gives the states standing to sue. Now, I'm no lawyer, but I am a fiscal analyst. And, to me, this doesn't sound like a sincere fiscal argument.

First of all, consider the scope. The very highest figure in the range of costs Texas presents would represent an increase of tiny fraction of one percent in the state budget.

Here's the math. Texas budgets for two years at a time, and the all-funds budget for 2016-17 is $209 billion. In connection with the lawsuit against DACA and DAPA, Texas provided estimated possible costs associated with issuing driver's licenses of between $2 million and $50 million per year.

Just for the sake of argument, suppose that the cost is at the very high end of those estimates. That amounts to one twentieth of one percent of the state budget of Texas. Even in the "worst case" scenario, this is hardly going to be a budget buster.

And, many seasoned budget analysts are scratching their heads over the figures Texas has put forward. The only explanation of the costs comes from the testimony of a state official that presents precious little detail, yet claims each license will cost between $155 and $199 to produce. That's a lot more than it costs other states. In Massachusetts, for example, an $80 fee not only covers the cost of producing a license, but also provides a tidy profit to the treasury.

And, so far we have looked just at the cost side of the equation. DACA and DAPA would also result in added state revenues.

Start with the fees people pay for driver's licenses. The cost to Texas residents of getting a driver's license is comparatively low, typically $25. There is good reason to suspect that $25 may be enough to cover the cost of issuing licenses. Even if it doesn't, though, the revenue certainly offsets at least some of the cost. In addition, there's little doubt that if these immigrants get licenses some will also buy cars. Add the car registration fees to the revenue side of the ledger as well.

More significant still is the added tax revenues that DACA and DAPA would bring. If the executive actions go into effect, states can expect higher levels of tax compliance by immigrants and their employers. And, states can expect that immigrants with work permits and driver's licenses would earn more and spend more than they do today, since they would have a better likelihood of finding the job match that makes most productive use of their skills. The Institute on Taxation and Economic Policy estimates that this combination of higher incomes and better tax compliance would bring an additional $845 million per year in state and local tax revenues around the country, including $57 million per year in Texas alone. If Texas does indeed face a cost in issuing driver's licenses beyond the fees it collects, a revenue stream of $57 million a year sounds like a pretty reasonable "reparation."

There are plenty of reasons to be frustrated with DACA and DAPA. Some advocates for immigrants say they don't go far enough, with fewer than half of unauthorized immigrants likely to get a reprieve that is in any case only temporary. Some opponents say the president doesn't have the authority to act on his own, and should really bring that matter to Congress. (Don't laugh, that's the way things are supposed to work.) The president himself fairly pleaded with Congress to pass its own immigration bill that would make these half-measures unnecessary.

But, whatever you think of DACA and DAPA, it's hard to take seriously the appeals court's argument that what really matters here is the cost states might face in issuing driver's licenses.

The United States has asked the Supreme Court to review the case. Let's hope that it does, and that the nine justices in Washington will demonstrate a better understanding of state fiscal realities than the three judges in who decided this case in New Orleans.

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