Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland

September 20, 2012 – Jay Wilson and Daniel Cinquegrani

MCTL Meeting of September 20, 2012:

Our questions to and responses from Jay Wilson and Daniel Cinquegrani:

The speakers were Jay Wilson of the Montgomery County Young Democrats and Daniel Cinquegrani of the Montgomery County Young Republicans

Note: The Maryland Dream Act, a law passed in 2011 but put on hold because of a successful petition drive to put the question to Maryland voters, would let some illegal immigrants pay the lower in-state tuition rate at the state’s colleges and universities. The law would apply to illegal immigrants who have attended Maryland high schools and whose families have filed state tax returns. Students would have to attend two years of community college before applying to a four year college.

1. How many students will the beneficiaries of the Maryland Dream Act add to college populations?  The difference between in-state and out-of-state tuition for 4-year colleges is $17,000 per year ($5,000 for community colleges).  Will this additional cost to taxpayers eventually result in increased tuition costs for all?  Will it result in additional revenue for colleges?

Daniel Cinquegrani (DC): It would cost $45 – 153 million annually depending on the number of students covered. This would be about 3% of the budget of the University of Maryland system.

Jay Wilson (JW): The above number is overstated. In other states with a similar DREAM Act, the additional enrollment is about 1%. Given that Maryland has 230,000 college students the additional numbers would be immaterial. The Act is supported by the president of the University of Maryland. In the state’s university system the current tuition is about $8K annually; for out-of-staters and undocumented residents the tuition is $17K. Revenue for the universities will actually go up because students who do not go to the university now (due to the high out-of-state cost) will enroll in the university while the marginal cost of adding students to the existing classes will be minimal.

2. How many “legal” Maryland students will be denied admission to Maryland colleges due to the influx of  Maryland Dream Act beneficiaries?

JW: None, as there are separate pools for instate vs. others. Dream Act students who apply will only be competing against out-of-state students in the admissions process. They will not take slots that otherwise would go to native-born Maryland residents.

DC: The student body at the University of Maryland – College Park is 23% out-of-state; at Morgan State it is 35%. If there were 8000 additional (DREAM) students, some native Marylanders would be denied admission simply because the university would no longer have the physical capacity to educate so many students.

3. What is the cost to Maryland’s economy of not allowing undocumented students access to in-state tuition for a college education?   Will this affect employment positively or adversely?

DC: There would be no effect as Federal law prohibits the hiring of illegal aliens.

JW: As of June 2012 the Department of Homeland Security’s Deferred Action Program enables all Maryland High-school graduates who also graduate from college to legally obtain employment. Further, a college graduate will pay over $150,000 in state income tax over a lifetime.

4. How much will Maryland and Montgomery County gain from various taxes (sales, property, car registrations, etc.) from the families of Maryland Dream Act beneficiaries?  Are these families a drain on state/county services?  Which ones?  How much?

JW: A report by the American Enterprise Institute says that highly educated immigrants pay more in taxes than they get in benefits. The Social Security Administration has received over $120 billion in payments from illegal aliens, which they will never get in benefits because of their illegal status. The Supreme Court has ruled that states must educate all children regardless of their status. And an immigrant’s economic benefit to America should be measured over a lifetime, not just while they are in college.

DC: There are 250,000 illegals in Maryland of which 81,000 are illegal students. Health care costs for illegals are $167 million. The education and health care of illegals the state $1.2 billion annually.

5. Should the Maryland Dream Act pass, will current laws on the hiring of undocumented residents stymie employment of Maryland Dream Act graduates?  If yes, what is the purpose of the Maryland Dream Act?  If no, what is the projected annual contribution to state and local revenue from beneficiaries of the Maryland Dream Act?

JW: A June 2012 interpretation of existing law allows illegal aliens who are college graduates to work legally. Maryland gains over $6 billion in state domestic product from illegal aliens.

DC: Many jobs in Maryland are tied to Federal contractors, which would prohibit illegals from that employment. Even if an illegal is eligible for a work permit via the June 2012 ruling from the Department of Homeland Security, it doesn’t mean he or she will be issued a work permit automatically. There are numerous other grounds for denying such a permit.

6. The Maryland Dream Act states that eligibility for in-state tuition requires the filing of tax returns.  Critics claim that this does not require the payment of taxes.  Is this accurate?

DC: It’s true. The requirement is only that a Maryland tax return must have been filed. The illegal alien wishing to enroll at the local community college must provide documentation that their parents or legal guardians filed Maryland income tax returns for the three years that the student attended the Maryland high school and for all years that they attend the community college.

JW: Illegal aliens are already paying numerous taxes such as the sales tax, property tax, business tax, car registration fees, etc. The DREAM Act says anyone who files a Maryland income tax return fulfills that requirement.

7. To what extent will passage of the Maryland Dream Act encourage undocumented residents of other states to move to Maryland, thereby increasing the tax burden on current residents?  Since 2001, ten states have offered in-state tuition to undocumented students.  Has this increased the tax burden of those states?

JW: There is no data to support the idea of a sudden influx of illegals from other states. In states which already have a version of the DREAM Act there has been no influx but there has been an increase in total tuition revenue.

DC: It is unlikely that an out-of-state illegal would make a decision to move to Maryland based solely on the DREAM Act.

8. Is there an alternative to the Maryland Dream Act which is helpful to the Maryland economy and to the taxpayer?

DC: Being here illegally is a crime. The DREAM Act is an affront to those who came here legally and have followed all the rules.

JW: The DREAM Act benefits the military also. Texas was the first state to pass a version of the DREAM Act. Illegals have to meet all the requirements of the Act, which are quite stringent. All the research shows that illegals are a benefit to the state. No Maryland student will be displaced as illegal aliens are grouped with out-of-state students for the admissions process.

After the presentations, attendees brought up several points.

While illegals do pay into Social Security, they are legally denied from receiving the benefits. But they can get the Earned Income Tax Credit (EITC).

Tuition at Montgomery College is $1800. No one gets aid if their income is over $7500.

Actual instructional costs at the University of Maryland – College Park are $12,000 but in-state tuition is $8000. A compromise would be to charge DREAM students the $12,000 rate instead of the $25,000 out-of-state rate. Also, marginal costs are less than the instructional cost. However, the marginal cost for adding a student to a class of 400 is virtually nil while to a class of 15 that same cost is significant.

There would be no impact at Montgomery College as it accepts everyone who lives in the county and charges them the in-county rate.