(The Center Square) – The City of Los Angeles declared itself a sanctuary city in advance of the second Trump presidency, which would bar city cooperation with immigration enforcement and providing of immigrant data to the federal government.
However, the city’s fiscal weakness combined with its reliance on federal funding for migrant services could leave it short on funds if Trump withholds federal funding to compel deportation compliance.
The city’s new ordinance — passed unanimously by city council — prohibits the use of city resources from being used for immigration enforcement or cooperating with federal authorities engaged in immigration enforcement. The ordinance also bans the direct and indirect sharing of data with federal immigration authorities.
“More than one out of three people who live in Los Angeles, including my own parents, are immigrants. One in ten [LA residents] are undocumented,” said Councilmember Hugo Soto-Martinez in a statement. “We refuse to stand by and let Donald Trump deport our neighbors, family, friends, and coworkers.”
With 3.8 million Los Angeles city residents, and Los Angeles County’s over 800,000 undocumented immigrants — by USC estimates — more concentrated in the City of Los Angeles, it’s likely Los Angeles has at least 380,000 undocumented immigrants.
The City of Los Angeles received $22 million earlier this year from FEMA for migrant services, just one funding source among many, and non-inclusive of other federal grants to non-government organizations and other groups that provide benefits for migrants.
With the city described as “broke” by the city controller and now having to borrow $80 million to make court-ordered lawsuit payments, it’s unclear how the city can afford migrant services on its own if the Trump administration decides not to continue federal funding for migrant services.
Should the Trump administration stop all federal funding to Los Angeles for its non-cooperation with federal immigration officials, the city would find itself in a difficult financial situation. However, some fiscal analyses suggest that the city’s budget could be improved by cooperating with immigration authorities.
California could spend approximately $15 billion in state tax revenue on healthcare for the state’s 2.7 million undocumented immigrants this year, or nearly $6,000 per individual.
Based on the average undocumented worker wage in California of $13 per hour, an undocumented immigrant makes $27,040 per year, paying $464 in state income taxes. Assuming 30% of income goes to rent and the rest goes to sales-tax qualified spending, that’s another $1372 in state sales taxes, and $426 in City of Los Angeles sales taxes.
That’s well short of just state MediCal spending per undocumented individual, and of the $3,076 spent by the City of Los Angeles per resident.
Economic analysis presented earlier this year as Congressional testimony suggest that illegal immigration is a major financial drain, despite illegal immigrants having very high rates of work, due to low taxes paid on low average earnings. These low earnings then qualify households headed by undocumented immigrants for legally receiving welfare transfers on behalf of their American-born children.
Another analysis from the center-right Manhattan Institute estimates that the average native-born American is a net $256,000 drain on federal finances, while the typical illegal immigrant, who the Hastings Center says has less than a high school education, arriving between the ages of 25 and 34 is a net fiscal drain of $320,000.
“Immigrants of any age who never obtain a high school diploma are net fiscal burdens costing $40,000–$150,000 to the federal government over their lifetime, relative to a native-born person,” wrote report author and researcher Daniel Di Martino, an economics researcher and graduate fellow at the Manhattan Institute.
