The fiscal balance for native households (TN - EN) and immigrant-headed households (TM - EM) measured separately need not equal zero, however; there can be fiscal redistributions within the household sector from one group to the other. Table 6.2 shows that in New Jersey in fiscal year 1989-90 there was a net fiscal redistribution from native households to immigrant households at both the local and state levels of government. At the local level, the average native household in New Jersey paid an additional $144 per native household to offset the negative fiscal balance of $922 per immigrant-headed household imposed by current New Jersey immigrants.30 Table 6.2 reveals that the negative fiscal balance for immigrant households originates from the differentially high spending for immigrant families, particularly on K-12 education services. New Jersey immigrant families have more children than native families do on average (see Table 6.1), and in addition, Asian families in New Jersey tend to live in high-expenditure school districts. Immigrant households also receive more "other services," including local welfare services; this gap is particularly large for Latin American immigrant families. Interestingly, the fiscal gap between native and immigrant households is closed slightly by the fact that immigrant families in New Jersey—particularly those from Europe/Canada and Asia—pay more in local taxes than do native households.

At the state government level, immigrant-headed households in New Jersey are also in negative fiscal balance, by $562 per immigrant-headed household. To cover this shortfall, native resident taxpayers contribute a positive fiscal balance of $88 per native household.31 The main sources of immigrants' negative balances at the state level are higher spending for K-12 education aid (because

   

behalf of the federal government. Thus the federal government does not appear in AN and XN. Businesses and, to a lesser extent, nonresident tourists are included in AN and XN, however. Expenditures for business and nonresident tourist services (XN) cannot be estimated directly. Revenues from business and tourists (AN) can be estimated, however. Assuming businesses and tourists are mobile and will not locate in any state that exploits them fiscally, the analysis assumes AN= XN. Given this assumption, then [TN - EN] ·∙ N + [TM - EM] ∙ M ≡ 0—that is, the full household sector is in fiscal balance. In Table 6.2, balance is achieved by subtracting directly measured business taxes from the Garvey and Espenshade estimates of uniformly allocated state services. The remaining deficit for the household sector is then an estimate of the unmeasured business or tourist taxes in excess of business services. This final residual is also allocated to the business sector and netted uniformly from all households' state services.

30  

This required surplus of $144 per native household is just sufficient to offset the negative burden of $922 per immigrant household, so that the overall local government sector remains in balance: ($144/native households) · (.865 native households/all households) - ($922/immigrant household) ∙ (.135 immigrant households/all households) = 0.

31  

Again, the $88 per household contribution from the native population is sufficient to cover the net fiscal transfer of $562 per household received by the immigrant population and keep the state budget in overall balance: ($88/native households) · (.865 native households/all households) - ($562/ immigrant household) ∙ (.135 immigrant households/all households) = 0.



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