The Dream Act Would Boost New York’s Economy

The Dream Act Would Boost New York’s Economy

December 20, 2017. On September 5, 2017, the Trump administration announced that it would revoke the Deferred Action for Childhood Arrivals (DACA). This program provided immigrant youth who are currently undocumented and arrived in the United States before the age of 16, work authorization, protection from deportation and the sense of security of being able to live a life like everyone else in the place they call home.

It only took a matter of minutes for the Trump administration to negatively affect the lives of 1,300,000 DACA-eligible youth in the United States. In New York State, 76,000 of these immigrant youth are our neighbors, students, friends and family. Each day approximately 122 individuals lose their DACA status and the fear of detention or deportation to a country foreign to them is instilled.[1]

The Dream Act would fix the problem that Trump created, yet asked Congress to solve. The Dream Act would provide work authorization and a clear pathway to citizenship for Dreamers.

While the primary beneficiaries would be Dreamers themselves, the Dream Act would also help the overall economy flourish. New York has a large economy with a $1.5 trillion state gross domestic product. Passing the Dream Act would boost that by $1.8 billion annually, according to a report by the Fiscal Policy Institute based on analyses by the Center for American Progress and the Institute on Taxation and Economic Policy. That’s a modest but indisputably positive economic repercussion of doing right by these immigrant youth. It’s also a conservative estimate: with the passage of the Dream Act, young immigrants’ contributions would likely increase by considerably more as they enroll in college and obtain higher education degrees that allow them to work in different jobs. If half of the eligible population takes this path, the annual increase to New York State GDP is estimated at $5.8 billion .[2] And, while it’s difficult to predict what businesses Dreamers might start, it’s worth bearing in mind that immigrants and their children are responsible for the creation of 43 percent of America’s Fortune 500 companies.[3]

Dreamers already contribute to state and local tax revenues. Through property tax, sales tax, and income tax, Dreamers are currently responsible for $115 million in New York state and local tax revenue. With the termination of DACA, the state can expect to lose at least $43 million. That’s assuming that the immigrant youth who received DACA stay in the state, continuing to pay sales taxes and pay the rent that helps owners pay property taxes. Income tax compliance would, however, likely decline. The hit to tax revenues would be considerably higher if these young people were all deported—$115 million, not including the costs of disruption of the workplace and families, or the expense of enforcement needed to carry out mass deportations.

If Congress passes the Dream Act, in addition to an increase in government revenue there will be an increase in government costs. These costs are for the most part investments for economic growth and the health of our communities, such as higher education and medical coverage. For both New York and the country as a whole, the Dream Act would be good for the economy, would raise revenue, and would entail added government expenses to improve future economic productivity and to help our communities to thrive.

It is worth noting that a recent report of the Congressional Budget Office (CBO) estimated at the federal level the costs would be higher than the increased revenues. But as Douglas Holtz-Eakin, the former director of the CBO, explained: that score “does not reflect the real policy choice,” since it compares the Dream Act to the status quo of March 2017 when DACA was still in place. “The real choice,” as he put it, “is between a legal netherworld with DACA suspended but deportations not yet being pursued and legal permanent resident status.”[4]

What’s most important, in the end, is that the Dream Act would place young immigrants on the same footing as all state residents, paying their fair share of taxes, receiving their fair share of services, and rising to the level of their potential.

Dreamers have gone through our American school system. Many have considered the United States their home from the time they first learned to talk. Many have been our neighbors for decades. It is good for them, and good for all of us, when immigrants are afforded the same opportunities as all other residents. Our success, together, will only make New York stronger.

FPI’s report about the positive impact of the Dream Act on New York, and information about parallel analysis for other states, is available here.

By: David Dyssegaard Kallick and Cyierra Roldan

[1] Top 5 Reasons Why the Dream Act Can’t Wait Until 2018: https://www.nilc.org/issues/immigration-reform-and-executive-actions/dreamact/5-reasons-dream-act-cant-wait-til-2018/

[2]Boost to state GDP from passing Dream Act: Center for American Progress: https://www.americanprogress.org/issues/immigration/news/2017/10/26/441298/the-state-by-state-economic-benefits-of-passing-the-dream-act/

[3] Almost half of Fortune 500 companies were founded by American immigrants or their children: https://www.brookings.edu/blog/the-avenue/2017/12/04/almost-half-of-fortune-500-companies-were-founded-by-american-immigrants-or-their-children/

[4] Douglas Holtz-Eakin, “CBO and the Dream Act,” American Action Forum’s The Daily Dish, December 20, 2017.