When Jeff Goerger introduced his resolution advocating for a “just and welcoming community” towards refugees, he either didn’t know that Lutheran Social Services, aka LSS, and the business communities welcomed refugees with open arms or he knew that and pretended that refugees weren’t welcome in St. Cloud. Let’s examine those premises’ credibility.

First, let’s examine the fact that LSS gets paid $2,125 per refugee that they settle. Of that $2,125, LSS (or whatever Volag that settles refugees) is required to spend $1,125 on the refugee (s). The Volag is allowed to keep the other $1,000. Let’s not forget that LSS is a charity. On that part of their charity, they send 53% of their money to their client while keeping 47% of the money for other expenses.

Next, let’s consider the fact that LSS gets a fresh batch of new clients each year. This year, 225 refugees were settled in St. Cloud. That means that LSS might potentially earn $225,000 for resettling refugees this year. Next year, they’ll get another batch of refugees to settle. That will put another pile of money into their coffers. That sounds like a pretty reliable racket to pay LSS salaries.

That’s just part of the racket, though. This article highlights why businesses want to keep this racket running. According to the article, employers “are eligible for a maximum tax credit of $9,600” if they hire people from well-defined groups. FYI- Refugees are one of the well-defined groups. From an employer’s standpoint, this is like playing Russian Roulette with an empty gun whose firing pin has been removed. Those willing to ‘play’ this game hit the jackpot…twice.

This is the public face of the resettlement program:

The other face of resettlement hasn’t been shown. That’s the face of businesses getting taxpayer subsidies on top of cheap labor. Saying that employers hiring refugees aren’t paying them upper middle class wages is understatement. Adding this federal tax credit into the equation just makes it virtually irresistible to employers. Cheap labor gets even cheaper thanks to these tax credits.

The best part for employers and the Volags is that the supply doesn’t end. That isn’t the end, though. This article ought to get everyone’s attention:

After the 90-day reception period is over, the resettlement agencies discontinue those support services, with the expectation that refugees become self-sufficient and secure employment within that period. At this point, the refugees also start receiving notifications from IOM, asking them to pay back the cost of their plane tickets, payments the agency uses to reimburse the U.S. government for covering refugee transportation.

If refugees aren’t able to stand on their own feet after that period, they’re eligible to access some public benefits, including food, cash and medical assistance, for which all low-income legal residents can qualify. (There are some forms of assistance, however, including housing programs, that new arrivals don’t qualify for unless they’ve lived in the U.S. for a certain period of time.)

As St. Cloud City Council Member Jeff Goerger pointed out at Monday’s meeting, though, none of costs for any of the resettlement services are borne by the city. As he noted, the federal, state and county governments “are responsible for the funding, management, and relocation of refugees.”

Goerger’s statement is pretty flippant. Just because those costs don’t show up in St. Cloud’s budget doesn’t mean the costs are nonexistent. As Bill Clinton once famously said, there’s no such thing as a free lunch. Whether these programs are paid through the state budget, the federal budget, the county budget, the city budget or the school board’s budget, they’re still expensive.

When the school district pays for programs to help children of refugees get up to speed with English, the school district’s property tax levy is displayed on the same form as my city property tax form. Why should I think of them as being from different budgets? As the cliché goes, it’s a distinction without a difference.

While it’s apparent that the City of St. Cloud budget isn’t impacted by the initial act of resettlement, it’s pretty apparent that the city, the counties and the state budgets are greatly impacted. Apparently, that doesn’t matter to Councilman Goerger or Mayor Kleis. Is that because it isn’t their ox that’s getting gored directly?

One Response to “The refugee resettlement racket”

  • John Palmer says:

    The parent organization for St. Cloud’s LSS reported in their 2015 federal tax filing that 95% of their budget came from federal funds and their CEO was paid over $310000. Nine other employees made over $100000 with annual salaries averaging over $150000. Total compensation for the ten employees with salaries over $100,000 comes to over $200,000.(source 990 filed by Lutheran VOLAG for FY 2015).

    Something is wrong with a so called non profit charity with high overhead and highly compensated employees when the average wage earned by refugees placed is around $11 an hour. Highly rated charities have overhead in the single digits percentage-wise and receive the vast majority of their funds from gifts. It is clear LSS operates more like a for profit business, a very lucrative one, than a charity and has a good racket going at the expense of both their clients and taxpayers.

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