Tennessee is the first state to tell the federal government that it can’t be forced to pay for the federal refugee resettlement program on the constitutional basis of federalism and the Tenth Amendment. It is suing the federal government over its continuation of refugee resettlement in Tennessee after the state withdrew from the program.
When the state withdrew more than 10 years ago, the federal government turned program administration over to the federal contractor, Catholic Charities of Tennessee, a nonprofit organization that earns most of its revenue from federal grants and contracts related to the refugee program. Catholic Charities immediately increased the number of refugees placed in Tennessee by nearly 50 percent, reaching an annual high-water mark of more than 2,000 per year by 2016. (Tennessee refugee numbers are down recently only because the overall national refugee quota was slashed after 2016.)
Although many costs fall to state taxpayers from refugee resettlement, such as public schools, special medical needs, and English Language Learner and interpreter services, the suit singles out the cost to state taxpayers for TennCare, the state’s Medicaid program, and asserts the right not to pay the state portion of the Medicaid bill for refugees placed in Tennessee. Federal reports of refugee welfare usage show that, even five years after arrival, about 45 percent of refugees across the nation are in the Medicaid program.
The Tennessee General Assembly filed suit against the federal agencies responsible for the resettlement program over the right to enact the state’s annual budget without diverting TennCare funds to the federal government for refugees. The suit was heard in district court in March 2018 with the public interest law firm Thomas More Law Center (TMLC) representing the state legislature pro bono. The suit was dismissed on the grounds that the state legislature “lacked standing.”
Thomas More appealed, and the case was heard March 19 in the U.S. Sixth Circuit Court of Appeals, where most of the oral arguments revolved around the legislature’s right to even bring such a suit.
How We Got to This Point
The original federal Refugee Act intended to insulate states from program costs. The bill’s Senate sponsor, Edward Kennedy, stated specifically that “[s]tate and local agencies . . . not be taxed for programs they did not initiate and for which they were not responsible.”
As passed, the act intended for the federal government alone to fund the program it was creating. While ensuring that refugees are eligible for all welfare programs upon arrival on the same basis as U.S. citizens, Congress authorized federal reimbursement for three years of states’ portion of program costs for Medicaid and other state-specific costs generated by the resettled refugees.
Federal support to states for refugee costs was reduced shortly after passage of the Refugee Act and, by 1991, reimbursement for Medicaid and cash welfare was eliminated. Federal reports admit that as Congress reduced funding for the refugee resettlement program, the costs were shifted to state governments. During the 1992 reauthorization of the act, a Senate report acknowledged that “[s]ome smaller states indicate that they may eliminate their refugee programs entirely with such a cut [reimbursement to states]. And a consequence of such funding cuts is pressure to reduce the number of refugees admitted for resettlement…”
To add insult to injury, regulations issued during the Clinton administration make it impossible for a state to stop paying program costs by withdrawing from the refugee program, as in Tennessee. Today states that withdraw find resettlement continues under federal contractors acting without any oversight from state authorities yet with the state continuing to pay certain costs that were once the responsibility of the federal government.
After the Obama administration raised the annual refugee quota to 110,000 for FY 2016, Maine, Texas, New Jersey, and Kansas asked to withdraw from the program. Twenty-five states sued the federal government in an attempt to halt the planned large-scale Syrian resettlement. Except for Tennessee’s, no state refugee lawsuits are active today, partially due to Trump administration cuts to the refugee quota, now at 30,000 for the current fiscal year.
Can Feds Force States to Pay for Programs?
Only the Tennessee lawsuit used the Tenth Amendment to address the imbalance of power between state and federal government shown by the intentional shift of costs from the federal government to the states. Surely the Constitution limits the federal government’s power to use state taxpayer money to fund a federal program that the state does not want to participate in.
The 2012 landmark case National Federation of Independent Business v. Sebelius is cited as a precedent in the Tennessee lawsuit. While upholding most Obamacare provisions, Sebelius allowed states to decline its expansion of Medicaid.
In writing of this modest curb on federal dominance in the power relationship between the state and federal governments, Chief Justice John Roberts may have formulated the case for Tennessee best: “we look to the States to defend their prerogative by adopting ‘the simple expedient of not yielding’ to federal blandishments when they do not want to embrace federal policy as their own. The States are separate and independent sovereigns. Sometimes they have to act like it.”