Undocumented Immigrants in Colorado: What They Cost, What They Pay

Research shows undocumented immigrants in Colorado are a significant contributor to the state’s economy and they contribute as much in sales, property, and income taxes as they cost in K-12 education and other mandated services. Read the full findings of Colorado’s Undocumented Immigrants: What They Pay, What They Cost In Taxes here.

The population of undocumented immigrants in Colorado has declined in recent years, tracking the downturn in the economy, but the debate over immigration has only grown more heated. Some of the heat generated in that debate comes from claims that undocumented immigrants take jobs and overburden state resources.

Research conducted by the Bell Policy Center and the Colorado Center on Law and Policy finds:

  • Undocumented immigrants account for 5 percent of the state’s workforce and 3 percent of state personal income, and these workers produce 7 percent of Colorado’s economic output.
  • Economic activity generated by undocumented immigrant households accounts for an additional 91,000 jobs statewide, $4.7 billion in personal income and $15 billion in industry output.
  • Undocumented immigrants paid an estimated $167.5 million in income, property, and sales taxes in 2010, which covered the cost of K-12 education, emergency medical care, and jail and prison incarceration. The cost of those federally mandated services is $166.6 million.

The Bell Policy Center conducted similar research in 2006 and found undocumented immigrant households paid $159 million to $194 million in total taxes, while the cost for mandated services was about $225 million. Since 2006, the average income of undocumented households has risen, generating more tax dollars for the state. Also, the number of undocumented immigrants, especially the number of school-age children, has declined in the past five years.

“This analysis clearly shows claims that undocumented immigrants are the cause of our budget problems are way off base,” said Rich Jones, director of policy and research at the Bell Policy Center. “They are not eligible for and do not receive most government services. In fact, they pay enough in taxes to cover the costs of providing federally mandated services to them.”

“Labor by undocumented immigrants ripples through all parts of Colorado’s economy,” said Alec Harris, a policy analyst for the Colorado Center on Law and Policy. “Like all groups of workers, undocumented immigrant workers spend their earnings, which supports local businesses, enabling those companies to hire more workers. It’s a positive cycle that stimulates the state’s economy.”

Other findings:

  • In Colorado, for every job held by an undocumented immigrant, 0.8 jobs are created.
  • Undocumented immigrants work mostly in construction, services, leisure and hospitality and manufacturing.
  • Colorado had an estimated 15,763 undocumented students between 5 and 17 years old; funding for them represents less than 2 percent of total state and local K-12 spending.
  • Colorado spent $26.5 million to provide emergency medical care to non-citizens in 2010-11 (not all of whom were undocumented immigrants). That total represents just over 0.5 percent of the state budget for health care.
  • The net cost of holding undocumented immigrants in jails and prisons in Colorado was $32.5 million in 2009, or about 4.2 percent of the state budget for prisons.
  • Undocumented immigrants live in our communities, and like all Colorado consumers pay sales taxes on the goods they buy. In 2010, this amounted to $114.6 million.
  • Undocumented immigrants also paid $30.9 million in property taxes, mostly as part of their rent payments.
  • Undocumented immigrants have $30.9 million in income taxes withheld from paychecks.