Fear may cause revenue drop, treasurer says
Fear may cause revenue drop, treasurer says

The apparent exodus of thousands of Hispanics due to fear of Oklahoma's new immigration law could explain the recent drop in sales tax revenue, a top finance official said.

"If it is true that a lot of people left this state because of that bill, as we're hearing anecdotally, then you would expect to see a dip in your sales tax collections,” state Treasurer Scott Meacham said.

"From a state revenue standpoint, there may be an impact.”

The House author of the immigration law, state Rep. Randy Terrill, said the downturn in tax collections was expected.

However, Oklahoma will have a net savings because less money will be given to illegal immigrants or spent on expenses caused by them, he said.

"There appears to be significant anecdotal evidence that illegal aliens are leaving the state of Oklahoma, particularly in the northeast part of the state in and around the Tulsa area” and the Panhandle, Terrill said.

"So certainly there is some indication that House Bill 1804 is having a contingent effect of causing illegal aliens to leave the state of Oklahoma by denying them access to jobs, as well as taxpayer-funded benefits.”

An estimated 100,000 to 250,000 illegal immigrants have been living in Oklahoma, he said.

House Bill 1804 took effect Nov. 1.

Meacham, who serves as Gov. Brad Henry's Cabinet secretary of revenue and finance, said it will be interesting to note sales tax collections for the next few months to see whether the dip in sales tax collections continues.

The next revenue report on state tax collections is expected Tuesday.

Last month's report showed sales tax collections for September produced $123.7 million for the month of October.

That amount was $400,000, or 0.3 percent, below the same month last year and $6 million, or 4.6 percent, below estimates.

It was only the second time in the past 12 months that sales tax collections failed to exceed the amount of money collected for the same month the previous year.

The earlier downfall in sales tax activity for January was blamed on bad ice storms.

The timing of October's lower-than-expected sales tax collections could be just "coincidental” to the implementation of HB 1804, Meacham said.

Exact figures are difficult to obtain because it's unknown how many illegal immigrants have been living or continue to live in the state.

The loss of that many people would result in fewer goods — food, clothing and supplies — being bought, Meacham said. The state collects sales taxes on those items.

It's clear a significant number of Hispanics have left the state.

"The problem right now that I'm hearing out there is labor supply issues in the ag sector, in the energy sector, in the construction sector, in various pockets around the state,” Meacham said.

Landscape contractors are having difficulty hiring employees, even when offering jobs at $15 an hour, or about twice the minimum wage, he said.

Terrill, R-Moore, said figures compiled last year by a House study gathering information on preparing HB 1804 indicated illegal immigrants contributed about $21 million a year in tax collections — about $11 million in income tax and about $10 million in sales tax.

"I would compare and contrast that with the direct cost of illegal immigration that came out of that interim study that showed the direct cost was in excess of $200 million,” he said.

The cost of illegal immigrants is a drain on the state's public schools, health care, prisons and welfare system, he said.

"That doesn't even count the cost to private individuals who get smashed into by an uninsured illegal alien,” Terrill said. "It's pretty clear that when you compare the $200 million in direct costs versus the $21 million that illegal aliens contribute that illegal immigration is a net financial drain to the state of Oklahoma.”

Meacham said the state could save money in the long run by having fewer illegal immigrants. But the state has to get through the immediate struggles of having less sales tax revenue and labor shortages that will see construction and other costs increase.

"Like a lot of things you may have to live through some short-run pain,” he said.

"The question is how long does the short term last, how many years, and what does that do to the economy in the meantime.”

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