Cracking down: Arizona's steps to make it tougher for illegal immigrants to work and go to college are also affecting legal residents and the economy.

• Author: McKinley, Jesse
• Position: NATIONAL

When Marco Carillo, a naturalized American citizen and a high school valedictorian, met with his college counselor, her major worry about his future had little to do with his SAT scores or extracurricular activities. It had to do with his citizenship.

"The very first question she asked me was whether I was a legal resident here," says Carillo, 20, now an electrical-engineering student at Arizona State University in Tempe. "And I said, 'Yeah, I am.' And she said, 'Oh, good, that makes things easier.'"

Such questions have become common in Arizona, where voters passed a referendum in 2006 that forbids college students who are not legal residents from receiving state financial assistance, and prohibits in-state tuition for illegal immigrants.

The referendum is one of several actions taken by Arizona officials and voters on immigration. The state has also moved National Guard troops to its border with Mexico, and in what may be the most significant step, enacted a law against employing illegal immigrants.

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The law, which threatens to revoke the license of--and potentially put out of business--any employer who knowingly hires an illegal immigrant, is just one example of the scores of state and municipal laws across the country meant to address illegal immigration in the belief that Washington has not done enough about it.

But Arizona's new law, which is thought to be the toughest in the nation, has shaken businesses, scared workers, delighted advocates of stricter immigration controls and added to tensions in a state already divided over who belongs here and who does not. Even before the law took effect in January, several employers reportedly dismissed workers whose legal authorization to work could not be proved.

Some legal residents are also unnerved by the law, particularly those with family members who are in the United States illegally.

Juan Jose Araujo, 44, is here legally--but his wife is not. She wants the family to return to Mexico because of the difficulty in finding a job and what the family considers a growing anti-immigrant climate here.

"We don't have family or anything in Mexico," says Araujo, who has lived in the U.S. for 24 years. "I wouldn't have anywhere to go there, but we have to consider it."

NO 'RED CARPET'

There are already signs of flight among Arizona's Hispanic immigrants: Families are moving out of apartment complexes, and public schools in heavily Latino districts are reporting a drop in...