The ICE Man Cometh? The Economic Impact to Elk Grove If I.C.E. Comes to Town
Obviously, the human toll of mass deportation would be much greater than the economic impact to Elk Grove.
On August 22nd, the U.S. State Department announced it would be screening 55 million U.S. visa holders for potential violations that could lead to visa revocation and deportation. The vetting process will be continuous and will include reviewing social media accounts, law enforcement records, and immigration histories of visa holders (including expired visas). Setting aside the local political jingles like “We are a compassionate City” and “Welcome to all" the fact is the U.S. Immigration and Customs Enforcement (“ICE”) agency is on the move across the country and Elk Grove is not exempt from the potential deportation of its unauthorized residents, including those who have overstayed their visas.
Besides the personal impacts of deportation, I wanted to briefly assess the potential economic impact of mass deportation on the local Elk Grove economy and the City’s budget. This assessment is obviously not precise and I have used several AI sources to assist in this study. It will take some time for the U.S. government to sift through 55 million computer files. But in the meantime, it is important to ask, what if…
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Assuming that the vast majority of those Elk Grove sales were made by Elk Grove residents, then the per capita total retail sales in 2022 was $19,986 per person. Assuming a five percent inflation rate of goods prices from 2022 to the present, it can be estimated that each person in Elk Grove will spend roughly $20,985 this year. Removing 7,182 people and businesses could lose about $150.7 million in annual revenue if mass deportation occurs.
Sales tax revenue accounts for roughly 49% of the City’s budget revenue. The City receives .75% of the purchase price as sales tax and an additional .70% of additional Measure E sales tax revenue, or a total of 1.45% sales tax from purchases. Removing $150.7 million in purchases by deported residents, the City would lose approximately $2.1 million in direct sales tax revenue. Since it is estimated that households spend about 7% of their purchases on non-taxable items such as unprepared foods, the net total hit to the City budget would be reduced to about $2.03 million per year.
Obviously, the human toll of mass deportation would be much greater than the economic impact to Elk Grove. Non-deported persons residing in those households might also lose whatever financial aid the deported residents may have been contributing to the household expenses, such as EBT food and cash stipends.
Business will take a hit if the ICE man cometh, but I’m sure the continued population growth of new residents will more than make up for the loss in the long term. As for the City, a $2 million hit to their warchest is a drop in the bucket. I’ve seen them blow more than that chasing MSL soccer and zoo dreams!
