Refugee resettlement costs are up but still a small part of welfare programs

Minnesota chips in generously to help refugees adjust to life in the United States, but these costs make up a small fraction of the overall tab for public assistance programs.

Data the state compiled for the Star Tribune show that Minnesota spent more than $180 million in state and federal dollars on cash, food and medical assistance for refugees in 2015, the most recent period available. That's up 15 percent from five years ago but still less than 2 percent of total expenses for these programs. For state-subsidized child care, however, refugee communities have come to account for more than a quarter of costs.

"In the short term, resettlement can be a very fiscally intensive exercise because of the kinds of needs refugees bring," said Ryan Allen, an expert on resettlement at the University of Minnesota's Humphrey School. "As people of working age find jobs and become more self-sufficient, benefits will accrue over time."

Minnesota has joined a roiling national debate about how the upfront taxpayer costs of resettling refugees stack up against long-term benefits as they join the workforce.

Now, the Trump administration's move to pause and shrink the resettlement program brings fresh attention to the cost question, which Minnesota has never set out to answer.

Republican state legislators introduced a proposal last spring calling for an independent audit of all federal, state, local and nonprofit expenses for resettlement in Minnesota.

Sen. Bruce Anderson, R-Buffalo, says the federal government makes all major decisions about refugee arrivals but passes part of the cost to local communities, where taxpayers have little clue what they are paying.

"They say, 'OK, states. You take care of it. You make it happen,' " said Anderson, who reintroduced the proposal this year.

In St. Cloud, retired sales manager Tom Krieg wanted to know what resettling refugees in Stearns County costs — and he went from the city's mayor to county officials to the local newspaper for answers. In response to queries from Krieg and fellow residents, Stearns County created almost 100 PowerPoint slides on the resettlement process. Krieg says he was surprised by how few answers were readily available.

"It's a Minnesota philosophy of, 'If it looks good and feels good, don't ask a lot of questions,' " he said.

The cost question is misplaced, some advocates argue. Resettlement is a humanitarian effort helping some of world's most vulnerable: single mothers, people with pressing medical needs, survivors of torture.

To Mark Sizer, the county's human service administrator, tackling this question offers a chance to dispel some misconceptions. He says some residents asked why refugees get free housing, cars and groceries. They do not.

New refugees receive a federal grant of no more than $1,125 to help pay for rent, furnishings, food and other expenses in their first three months of arrival. A small number can opt into a federal program that covers more early expenses, with a push to find a job within four months. The rest rely on public assistance programs to supplement federal dollars.

Few federally and state-funded programs here track refugee status. There's no way to glean refugee use of unemployment insurance, MNsure insurance subsidies, Section 8 vouchers and state-run housing subsidy programs, among others. The state does not know how many refugee students enroll in public schools.

Over the past three months, the Minnesota Department of Human Services crunched the numbers on refugee participation and spending in five assistance programs at the request of the Star Tribune. Jim Koppel, an assistant commissioner at the department, says the state doesn't normally track these costs because of its commitment to refugees: "We don't look at the cost of people coming to Minnesota from Iowa and compare it to the cost of people coming from South Dakota."

Spending for cash, food and medical assistance has gone up as refugee arrivals increased, from about 1,740 refugees five years ago to 2,630 during the past fiscal year. That includes a 30 percent increase in a cash assistance program for families with children, which supported about 10,740 refugee households at a cost of roughly $18.2 million in 2015.

The federal government covered almost 55 percent of the overall costs, including the entire $15 million tab for food stamps and half the $144.5 million medical assistance bill. The department said the numbers capture refugees who move to Minnesota from other states as well as most who become permanent residents after a year in the country, unless they choose to update their status.

Minnesota is known among newcomers for its generous benefits, says the state's former refugee coordinator, Gus Avenido.

According to a federal comparison, refugees in Minnesota receive $532 a month on average through its family cash assistance program, compared with about $430 nationally.

State data show almost 78 percent of Somalis exit the family cash assistance program within three years, above the 67 percent of all Minnesotans on average.

Beyond these programs, estimating costs gets trickier.

In response to a data request, the Department of Human Services found the state resettled more than 3,785 school-aged children in the past five years. But the state doesn't know how many needed English services. In recent years, the cost of educating English learners was about $9,790 in federal and state dollars, compared with about $8,080 for an average student.

For other programs, the only way to estimate refugee participation or costs is to use home or preferred language — a flawed substitute because residents who list, say, Somali could be second-generation U.S. citizens or newcomers sponsored by family.

Using language as a measure, one program where the state's largest refugee communities account for a sizable portion of the tab is subsidized child care. Almost 7,500 Somali, 300 Oromo and 200 Karen children received more than $49.6 million in state child care subsidies last year — more than a quarter of all expenses, compared with 12 percent five years ago.

Counties have two main resettlement expenses: interpreting and health care services. But counties like Ramsey, which has overtaken Hennepin as the top resettlement destination, don't separate expenses by refugee status. Stearns County estimated it spent about $80,000 to coordinate refugee health screenings and more than $368,000 for interpreting.

Ahmed Farah arrived in the Twin Cities with his sister and parents last fall after spending almost 20 of his 29 years in an Eritrean refugee camp. His father, who uses a wheelchair, qualified for Supplemental Security Income. The other family members received $250 each in cash assistance and a total of roughly $400 in food stamps.

When a warehouse job came along four months later, Farah hesitated. It would be a shift from teaching math at the camp to manual labor, with nighttime hours and more than an hour public transit commute from St. Paul to the southwest metro.

But he says, "I had to accept this. You arrive, and you have many opportunities, but it takes time."

Now off public assistance, Farah hopes to get into college and restart a teaching career.

A cost-benefit look at resettlement would factor in refugees' economic contributions — and that side of the equation can be even more challenging.

Concordia University professor Bruce Corrie points to his study of the Hmong in the state between 1990 and the early 2010s. The Hmong poverty rate more than halved, to about 27 percent; the homeownership rate rose from 12 percent to 47.5 percent; and estimated state and local taxes went up from $9.5 million to $80 million. Corrie estimated the Hmong have started 3,200 businesses in the state.

"Even if you admit in the short term there are costs, in the long term you come out ahead," Corrie said.

A Migration Policy Institute study found refugee men are employed at a higher rate than their U.S.-born counterparts and refugee women at about the same rate as the native born. Refugee reliance on public benefit programs drops off sharply over time, though it remains higher than for the native born.

Minnesota also boasts a growing refugee entrepreneurial class. The Minneapolis-based African Development Center says its member businesses created 122 jobs and retained 514 jobs last year.

"When people are thinking about costs, they think short term," said State Demographer Susan Brower. "They are not thinking about the long-term effect on our workforce."

Staff writer MaryJo Webster contributed to this report, as did Jessica Bekker, a University of Minnesota student on assignment for the Star Tribune.

Mila Koumpilova • 612-673-4781