Dream Act fiscal impact remains murky -- Gazette.Net


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It might not be prompting the multimillion-dollar ad war of the casino ballot question, but the Maryland Dream Act referendum has fostered its own heated debate, in part over the potential impact to the state’s taxpayers.

So many variables are involved that it’s difficult to pin down the would-be costs and benefits if some children of undocumented immigrants were allowed to pay in-state tuition at Maryland’s institutions of higher learning, as called for in the law, which the General Assembly passed in 2011.

Still, both sides — and less passionate analysts — continue to weigh in. Ultimately the voters will decide the issue; a petition drive put the law on the Nov. 6 general election ballot.

Just this week, a study released by the University of Maryland, Baltimore County concluded that the act could benefit state and local governments by $6.2 million per year, but opponents were quick to blast the report’s findings.

Numbers gleaned from Texas and California, which offer a form of the Dream Act, present a fiscal picture unique to those jurisdictions. Even so, their experiences are likely to have one thing in common with Maryland — undocumented students make up a small percentage of public university enrollment.

The report by UMBC’s Maryland Institute for Policy Analysis & Research estimates that about 435 students per year would take advantage of the act in the state.

The fiscal costs of the program — measured as per-student funding that subsidizes high school and higher education — will be about $3.6 million for county governments, $3.6 million for the state and $200,000 for the federal government, according to the report.

But such costs will be more than offset by increased tax dollars as well as a drop in spending on incarceration and other social programs that is expected to accompany a more educated population, the report says.

The state and county governments stand to share an estimated $6.2 million, while the federal government would get about $18.4 million, it concludes.

The report also states that potential revenue loss at community colleges would be offset by the increased education subsidy that will accompany additional students, and the revenue loss across all 12 state universities would be approximately $1.8 million per year, or about 0.1 percent of total tuition and fee revenue.

But critics of the Dream Act, such as Del. Patrick L. McDonough (R-Dist. 7) of Middle River, rejected the report’s findings this week, arguing that a negative economic impact was far more likely.

“The loss of out-of-state tuition revenue caused by the Dream Act will dramatically impact community college operating revenues,” McDonough said in a statement Tuesday. “This reduction, without question, will reduce the number of slots available and displace students’ access.”

The opponent group Help Save Maryland argues that the state could see substantial losses from such displacement — as much as $44,000 per student over four years, said Brad Botwin, the group’s director.

That estimate includes the difference between out-of-state and in-state community college tuition for two years, plus the difference in tuition at the University of Maryland for two years, Botwin said.

The total current cost in tuition and fees for a full-time, in-state undergraduate at the University of Maryland, College Park is $8,908; for out-of-state undergraduates, the cost is $27,287.

The UMBC report argues that because the law requires Maryland students to attend two years of community college — which has open enrollment — before transferring to a four-year institution, and because university guidelines require the acceptance of all eligible community college transfers, displacement won’t be a problem.

The report also estimates that Dream Act students will make up about 0.6 percent of the total number of students at the state’s public higher-education facilities, a number comparable to what supporters of the law have projected.

The researchers project that the increased income, sales and property tax revenue that would accompany a more educated work force would outweigh the costs of the new law.

Texas, California Dreamin’

In the 11 states that have implemented similar laws, the number of undocumented students taking advantage of the in-state tuition rate has been less than 1 percent of their higher education students — even in states with large immigrant populations such as Texas and California, said Kristin Ford, spokeswoman for the Educating Maryland Kids campaign, which supports the legislation. Both of those states enacted laws similar to the Maryland Dream Act in 2001.

In fiscal 2010, 16,476 undocumented students — known as affidavit students — attended Texas’ public universities and community colleges, representing about 1 percent of total public enrollment, said Dominic Chavez, spokesman for the Texas Higher Education Coordinating Board.

Subsidizing those students cost Texas about $12 million in formula funding in fiscal 2010, but the students also paid about $33 million in tuition and fees that year, Chavez said.

A 2010 survey of the 22 campuses in the California State University system found that about 3,600 students had requested a nonresident tuition waiver under California’s version of the law — which offers resident tuition rates to some certain documented students and U.S. citizens as well as undocumented students. That’s less than 1 percent of the system’s 420,000 undergraduates, said Mike Uhlenkamp, CSU spokesman.

If they were charged out-of-state tuition, each student would have paid an extra $11,160 per year, according to Uhlenkamp. Systemwide, that’s about $40 million in forgone revenue annually, he said.

State’s stats

In 2011, fiscal analysts from Maryland’s Department of Legislative Services used the state’s education funding formula to project the potential increase in general fund spending as a result of the act.

Current estimates put per-pupil funding for each full-time equivalent community college student at about $1,850 for fiscal 2014, according to the Maryland Higher Education Commission. If 148 additional students attend college per year because of the Dream Act, as the UMBC report estimates, those expenditures would increase by about $273,000, according to the DLS formula.

The 2011 analysis assumed at least 366 undocumented students would be added statewide as a result of the new law in fiscal 2014, increasing expenditures by at least $778,400 in that year and by $3.5 million in 2016.

But analysts acknowledged that without a more solid enrollment estimate, such expenditures could not be reliably estimated.

Critics also take issue with the future tax revenue projections.

McDonough argues that illegal immigrants won’t be able to legally work in the country, even with a college degree, and so cannot be counted on to provide more tax revenue.

Even President Barack Obama’s recent executive order deferring deportation for many who came to the country illegally as children and allowing them to apply for work permits wouldn’t prompt a major addition to the legal work force, Botwin said, adding that it was unlikely many employers would “roll the dice” by hiring graduates whose ability to stay in the country was uncertain.

The law requires that students affirm that they will seek legal, permanent residency as soon as they can in order to qualify for the lower tuition rates.

Ford, of Educating Maryland Kids, says much of the opposition to the law has been based on speculation and uncertainty about the costs that the UMBC report puts to rest.

“The report was conclusive that this will have nothing but positive economic benefits,” she said.

Still, others say the would-be costs won’t be the determining factor for many voters when all is said and done.

“Many have made up their minds regardless of cost,” said Donald Norris, chairman of the Department of Public Policy at the UMBC. “[The report is ] not going to change the minds of the hard-core opposition.”

dleaderman@gazette.net