A study by the Institute on Taxation and Economic Policy estimates Kentucky stands to gain $23.2 million in increased revenue should Congress pass a comprehensive immigration reform bill.
The 50-state analysis assumes that a pathway to citizenship for the 11 million undocumented immigrants in the country will be included in any legislative package.
That would add around 80,000 new Kentuckians who would fully participate in the state and local tax systems.
According to the study, those immigrants who are living in the U.S. illegally are already paying $10.6 billion a year in state and local taxes nationwide, which is $58.8 million in Kentucky.
Supporters of immigration reform argue the added revenue demonstrates creating legal channels for the undocumented helps immigrant and native households, especially in poorer states.
“Some people would be surprised by how much undocumented immigrants already pay in taxes, including sales, property and income. But immigration reform would increase those contributions especially with income tax by creating a legal path for full compliance,” says Anna Baumann, a research associate with the Kentucky Center for Economic Policy, a non-partisan group that studies economic issues in the state.
Among the report’s Kentucky findings, it shows the undocumented immigrant population in the state currently pays $15.3 million in personal income taxes, $4.8 million in property taxes and $38.8 in sales and excise taxes.
Immigration reform passed the Democratic-controlled Senate in a bipartisan vote last month despite opposition from Senators Mitch McConnell and Rand Paul, who cited a lack of stricter border security provisions.
The Senate version has been declared “dead on arrival” by Republican leaders in the GOP-controlled House, however.
Congressman John Yarmuth, D-Ky., is a member of the a bipartisan “Gang of 7″ crafting a bill in the House. He remains optimistic a bipartisan bill can pass the, adding the report provides another incentive for lawmakers who are still undecided.
“This study is further confirmation that reforming our immigration system to ensure every individual working and living here is paying taxes and contributing fully to society will benefit our economy and all American families–the same way immigrants have driven our economy for the past three centuries,” he says.
The bipartisan group Yarmuth belongs to continue to meet behind the scenes to hammer out the final details.
There has been a wide arrange of supporters who have come out for comprehensive reform, including former President George W. Bush who is urging House Republicans to back the bill. But a number of GOP lawmakers have voiced concern that no matter how strict border security measures are in the House version it won’t make it through a conference with the Senate.
“There’s a lot of suspicion and concern about what the overall plan is of leadership here,” Congressman Thomas Massie, R-Ky. told WHAS radio show host Mandy Connell on Wednesday. “We want to make sure if we vote on anything that we have a guarantee from our leadership of who the conferees are. It has to be somebody we can trust not to give the store away.”
Observers have suggested waiting until after the August recess to deal with immigration reform as it appears top GOP lawmakers are predicting a long, slow death for the proposal. But for Kentucky advocates, the financial incentives for reforms should be on the minds of the state’s congressional delegation.
“We’ve got to think about the immigrants who are already here and there potential tax contributions to the state,” says Baumann. “As all of our congressmen should know, Kentucky has a serious structural deficit and we’ve had to cut state budgets by a lot in the last many years. An annual $23.2 million is no drop in the bucket, and it would go a long way to repairing some of those cuts.”