Immigrants in Austin pay more taxes, have more spending power than in other large Texas cities

A new study shows immigrants have an outsized impact on Austin’s economy.

Overall, 4.8 million immigrants in Texas paid $34.8 billion in taxes and had an economic footprint of $109.9 billion, according to an analysis of 2017 census data from the bipartisan immigrant advocacy group New American Economy.

Researcher Andrew Lim says immigrant populations have fueled much of the growth in Texas, and particularly Austin, over the last decade.

“Texas obviously is one of the most rapidly growing states – and Austin in particular,” Lim says. “We have looked at different metro areas and how they’ve been growing, and immigrants are disproportionately responsible for a lot of that growth in terms of population and providing workforces that meet the needs of expanding businesses or expanding industries.”

Though Austin’s share of immigrants is comparatively smaller than that of other metro areas, Lim says the population’s purchasing power and taxes paid were proportionally greater than in Dallas, Houston and San Antonio.

Overall, Austin’s nearly 300,000 immigrants had the highest combined spending footprint and taxes paid, compared to their overall size. Immigrants had a purchasing power of $7.4 billion and paid $2.5 billion in taxes, the study found. But Austin’s overall population share of immigrants in Texas was smaller than in other large metro areas.

“Within the context of Texas, Austin may seem to have a lower share of immigrants,” Lim said. “But when you look at other cities in the U.S., it is one of the top cities.”

However, Lim says, Texas policies like the state’s 2017 ban on so-called sanctuary cities has a chilling effect on the overall economic imprint of immigrant communities. The law gives police the right to question the immigration status of anyone they stop.

“You do see direct and indirect economic effects … either from business owners who no longer have the workforce they’re used to, especially in key industries like agriculture or construction,” he said. “But also at a local level, you’re having basically dollars removed from the community because people are no longer there to spend that money.”

This legislative session, Lim said, NAE is keeping an eye on two bills that would rescind in-state tuition for undocumented students at public universities. If passed, he said, that bill could make higher education for undocumented immigrants “prohibitively expensive.” NAE researchers predicted that could lead to a loss of $400 million a year in economic activity.

Photo: A new analysis from New American Economy found foreign-born workers account for more than half of construction jobs in fields like drywall installation, flooring, roofing and masonry.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT. Photo by Renee Dominguez/KUT.

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