Maryland DREAM Act is a Smart Economic Investment

Education is an investment that yields sizeable dividends over time. Well-educated students go on to become well-educated workers who earn more, pay more in taxes, and are less likely to rely upon public benefits. This is why the DREAM Act, and all of the state-level bills that bear its name, make so much sense. Allowing unauthorized children to graduate from high school and go on to college isn’t simply an act of compassion; it is enlightened self-interest. These children will prove to be far more costly to the state in the long run if they are less educated and living in poverty.

A case in point is the Maryland Dream Act, which allows unauthorized immigrants who graduate from in-state high schools (and meet other requirements) to pay in-county/in-state tuition at Maryland community colleges and public universities. As described in a new report from the Maryland Institute for Policy Analysis and Research at the University of Maryland, Baltimore County, the Maryland Dream Act would be a financial and economic windfall for Maryland. The report, titled Private and Government Fiscal Costs and Benefits of the Maryland Dream Act, estimates that the Maryland Dream Act would add approximately $66 million per year to the state’s economy.

However, the study cautions that this is likely an under-estimate of the law’s economic benefits. The authors write that “private benefits to students from the Dream Act include the higher post-tax earnings, fringe benefits, better job satisfaction and better health that result from more education. However, because of measurement difficulties, the only private benefit that we consider in this analysis is higher post-tax earnings.”

Likewise, the study probably undercounts the fiscal benefits of the law to federal, state, and local governments. The report explains that.:

“The fiscal benefits of the Dream Act include the increased income tax revenue, increased sales tax revenue, and increased property tax revenue that occur because more-educated individuals earn higher incomes. In addition, because more educated individuals are less likely to commit crimes and be incarcerated, are less likely to receive income support (welfare), and are less likely to receive Medicare or other government health care subsidies, fiscal benefits should also include the reduction in public spending in these areas. However, because of the difficulties with measuring other fiscal benefits, the estimates presented in this study only include increased income tax revenue, increased sales tax revenue, and reduced spending on incarceration.”

Even by this conservative accounting, the fiscal benefits of the Maryland Dream Act are substantial: $24.6 million, of which “$6.2 million will accrue to the State government of Maryland and to Maryland county governments and $18.4 million will accrue to the federal government.”

The study estimates that 435 Maryland high-school graduates will take advantage of the Maryland Dream Act to go to college each year. This may be a relatively small number of students, but it represents a sound economic investment. As one of the study’s authors told the Washington Post: “Even if the only consideration is the fiscal effects on state and local governments, the net economic effects of the Maryland Dream Act will be positive. The initial costs of the investment in education will be more than offset by increased tax revenues and lower incarceration costs from a more educated citizenry.”

The Maryland Dream Act is not only fair and compassionate, but it makes good business sense, too.

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  1. Even if the only consideration is the fiscal effects on state and local governments, the net economic effects of the Maryland Dream Act will be positive.

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