May 2 2017

The California Endowment has partnered with Institute on Taxation and Economic Policy (ITEP) to produce a new report that highlights the tax contributions that undocumented immigrants make to California and its larger counties. The report finds that undocumented immigrants contribute roughly $3 billion in taxes to California each year, over $1.5 billion of which goes to local government.

Public discussions about undocumented Californians often lack sufficient and accurate information about the contributions of undocumented Californians, particularly tax contributions at the local and state level. This new analysis indicates that undocumented Californians living in the California pay hundreds of millions of dollars each year in local taxes to the counties where they live (more than $1.5 billion) and collectively $3 billion combined in state and local taxes in the state of California.

The new ITEP analysis provides county-by-county estimates on the current state and county level tax contributions of California’s 2.7 million undocumented Californians as of 2014, and the increase in contributions if all these taxpayers were granted legal status as part of comprehensive reform[1].

Just how much do undocumented Californians contribute California and its counties in tax revenues? ITEP estimates that undocumented California’s tax contributions total $275.3 million in the Central Valley, $282.4 million in Orange County, $218.6 million in San Diego County, $195.7 million in Santa Clara County, $118 million in San Bernardino County, $61.4 million in Ventura County, $58.9 million in Sacramento County, and $987.6 million in Los Angeles County.

Tax contributions in California would increase by an additional $422 million if all undocumented Californians currently living in the United States were granted a pathway to citizenship as part of a comprehensive immigration reform.  Granting legal status to all undocumented Californians in the California as part of a comprehensive immigration reform and allowing them to work legally would increase their effective tax rate, thereby increasing their state and local tax contributions.

As California counties and localities mull over their approach to immigrant rights issues like expanding or preserving access to health care services, accurate and objective information about the tax contributions of undocumented Californians in communities is needed now more than ever. Most state and local taxes are collected from people regardless of citizenship status. Undocumented Californians, like everyone else, pay sales and excise taxes when they purchase goods and services.  They pay property taxes directly on their homes or indirectly as renters. And, many undocumented Californians also pay state income taxes. The data below allows California counties to fully recognize these contributions to their budgets for the first time.

Property, income, and sales and excise taxes are one of the many ways that undocumented residents contribute to the health of California communities.

Find the estimates for California’s 35 most populous counties HERE.

[1] Note: To maintain statistical accuracy, counties with smaller populations of undocumented residents were combined.

* This does not include tax contribution increases at the federal level.