North Carolina legislators are considering an anti-immigrant bill  (HB 786) that would impose new law enforcement costs on state and local governments and could result in additional consequences in the state’s communities. The Arizona-style “show me your papers” provision and other enforcement measures in this bill would take away from other investments state and local governments need to make—as this fact sheet  points out.
States that considered or enacted similar restrictive immigration laws and enforcement mechanisms have faced real costs to implementing such laws. In fact, the estimated cost of an anti-immigrant bill filed in Kentucky in 2011 raised concerns among stakeholders  and the bill ultimately failed to make its way to the Governor’s desk.
This Kentucky bill  comprised many of the core provisions that are in HB 786, including the “show me your papers” provision, the authorized seizure of vehicles during certain illegal activities, and new and ramped up criminal penalties. Fiscal analysts anticipated some savings but concluded that the costs of implementing the Kentucky bill would outweigh the savings, costing localities and the state, on net, approximately $40 million (2011 dollars) per year to enact.
Most of the $90 million in new spending in the Kentucky bill would have been concentrated in the jail, prison, and foster-care systems as a result of anticipated increases in the incarceration population. Other expenses would have been concentrated in indigent defense services and the court system. It is estimated that the state would have saved $50 million in the education and health and human services systems, resulting from children accompanying their parents during forced deportation and self-deportations.
Forty million is an underestimate because it does not include staff time, training expenses, or travel-related costs for identifying, arresting and transporting suspected undocumented residents—all costs that would be largely borne out by local governments. The estimate also fails to include the impending decline in local and state tax revenues resulting from workers and taxpayers being deported.
The lesson to be learned from Kentucky’s experience is that anti-immigrant bills have the potential to drain much-needed state and local revenues. This is especially true in a place like North Carolina for two reasons. First, North Carolina has the 8th largest undocumented population in the nation. The state’s population is estimated to be 400,000  undocumented persons, or 8 times as large as the 50,000 estimate assumed by Kentucky’s fiscal analysts. Second, North Carolina’s workforce is comprised of the 11th largest share  of undocumented persons in the nation—more than double Kentucky’s share, suggesting that deportations could hit North Carolina’s revenues hard. All told, the undocumented population paid approximately $317.7 million  (2010 dollars) in local and state taxes in North Carolina.
As North Carolina’s fiscal outlook remains murky , it is critical for legislators to closely examine the local- and state-level fiscal impact before enacting extensive anti-immigration enforcement measures. Following years of deep budget cuts, diverting tens of millions of dollars away from state and local investments in public structures will neither improve North Carolina nor make us safer.