I first mentioned this in a WONK ALERT published on the 16th. At the time, I quoted an Atlanta Journal-Constitution article, which said that “The State of Georgia could raise as much as $100 million in new revenues without costing the state’s voters a dime. It could do this by tapping into money sent abroad by aliens, many of them in illegal status — and money sent abroad by drug dealers, as well, whatever their status.”
I did a little bit of digging. Here’s what David North, of the Center for Immigration Studies, had to say:
Where do I get the $100 million estimate? It works like this: Oklahoma has about 95,000 illegal aliens according to the most recent Pew Research Center estimate, while Georgia, according to the same source has about four times as many, 375,000. So that’s a four-to-one ratio.
Meanwhile, Oklahoma has set the fee at 1 percent, while Jones suggests 2 percent. That adds up to an eight-to-one differential. The latest data, for the fiscal year ended June 30, 2016, show that Oklahoma collected $12,696,976 in these fees. Multiply that by eight and this produces an estimate of more than $100 million.
Oklahoma’s experience is that this income increases by 10 to 12 percent a year.
My advice to Rep. Jones would be to modify his fee structure. Currently the bill calls for a 2 percent fee plus $10; this would cost, for a $200 check $14, or 7 percent; for $1,000 it would cost $30, or 3 percent. Tilting the formula against the little guy is, sadly, one of the things we do these days, and this could be a source of opposition. On the other hand, there has to be a minimum fee to cover the cost of the paperwork.
So it would seem to be better to have a $10 fee or 2 percent, whichever is higher. Oklahoma’s formula is $10 or 1 percent, whichever is higher. The fee for a $200 check sent from Georgia would then be 5 percent, and for the $1,000 one it would be 2 percent. That formula would stir up less opposition. Further, I gather that the Jones bill will, wisely, pay the wire transfer operators a small fee for handling these arrangements; that should reduce any opposition from the industry.
The first question I have is in regards to Mr. North’s assertion that “most of the money now being wired out of Georgia, usually to aliens’ home countries, is not now being taxed.” Not that last part, obviously. I mean, I believe that. It’s the first part. I’d like to see the data on who’s wiring that money. I plan to reach out to the Georgia Department of Banking and Finance and the Consumer Financial Protection Bureau, but I haven’t made that step yet (this post will be updated and re-posted when and if I receive a response).
If Mr. North is correct, and that the majority of out-of-state wire transfers are by illegal immigrants, then this seems like a silver slam no-brainer. As he puts it, “The State of Georgia could raise as much as $100 million in new revenues without costing the state’s voters a dime.” I’m all for that. Everybody should be for that.
Here’s the thing. The Georgia Wonk adheres to two laws. The first, obviously, is Thunderdome.
But the second is the Law of Unintended Consequences. Nothing that sounds straightforward is, because people aren’t. Make sense? I’ll be completely honest–I have no specific fears or concerns with Mr. North’s, and by extension, Rep. Jones’, plan. There’s nothing, at this point, I can point to that makes me nervous, except for the vague sense that whenever you promise $100 million without any cost to taxpayers, you’re promising something bigger than you can deliver.
Categories: Get Wonky