By Paul Vallas

September 2^nd, 2026

A report issued by Chicago’s Inspector General confirmed that $639.7 million was spent on the city’s migrant response between 2022 and 2024, addressing the influx of nearly 50,000 individuals—mostly from Venezuela—who arrived from the southern border [1]. According to the report, the vast majority of these funds went toward 38 designated shelters [1]. In total, these new facilities offered five times the number of beds the city routinely makes available for Chicago’s resident homeless population [1].

While the total figure represents a combination of federal, state, county, and municipal funds, Chicago taxpayers were directly responsible for more than $269 million of the bill [1]. In addition to emergency shelter, new arrivals received meals, clothing, healthcare, and legal services under what City Hall calls the “New Arrivals Mission.” That $639.7 million total does not include public education costs [1]. Analysis by the research group Wirepoints estimates that educating migrant children costs Chicago Public Schools anywhere between $215 million and $410 million annually [2].

Mayor Johnson and allied reporters and commentators have touted the Inspector General’s finding that city administrators accounted for funds and generally followed procurement rules [1]. What was downplayed, however, was the underlying policy reality: $639.7 million was spent on migrants by a city facing chronic annual financial crises—crises that municipal leaders routinely address by raising taxes and fees and by deferring financial obligations.

Concurrently, state audits from the Illinois Auditor General revealed severe oversight gaps in emergency staffing contracts [3]. Primary vendor Favorite Healthcare Staffing received hundreds of millions of dollars across state and local accounts [3]. Audit reports showed that state payments to the vendor included $78.5 million for nearly 470,000 hours of “standby time”—effectively paying idle contract employee’s regular rates between $50 and $156 per hour, and up to $234 per hour for overtime, during periods of inactivity [3].

This represents only the latest spending controversy for a state that will have spent over $2.5 billion on migrant care through 2025, driven largely by state-funded healthcare programs and welcoming centers [4]. An Illinois Auditor General (IAG) report highlighted that state-funded healthcare benefits for non-citizens exceeded original legislative budget estimates by $1.6 billion [4]. Lawmakers and fiscal watchdogs have rightly criticized the administration for shifting funds away from budgeted priorities and operating with limited transparency [4].

Lack of fiscal accountability at the state level extends far beyond migrant programs. Illinois has consistently been late with mandated financial reporting, while audits of state agencies—the results of which are casually dismissed by Governor JB Pritzker as being repetitive—reveal systemic flaws. Another audit by the IAG found that the state overpaid $5.24 billion in unemployment benefits between fiscal years 2020 and 2022 due to fraud and weakened internal controls during the pandemic [5].

As residents watch their property taxes and municipal fees continue to rise, the city’s operational choices signal skewed priorities. While Chicago managed almost $640 million to shelter and support 46,282 new arrivals, the city funds only about 3,000 beds for its broader homeless population and fewer than 150 beds for victims of domestic violence [1]. Meanwhile, the Mayor has delivered fewer than 600 affordable housing units to date, despite promising 10,000.

Both Mayor Johnson and Governor Pritzker defend their response as a moral imperative rooted in humanitarian values, while directing blame at Texas Gov. Greg Abbott. Yet, the attractive array of services offered—including housing, healthcare, income support, legal aid, and more—created a clear incentive structure. State and local leaders could have slowed or even stopped the influx at any point by financially penalizing non-compliant charter operators or airlines for transporting undocumented migrants to Illinois, and by impounding buses used for transportation.

The current scope of expensive services that are part of these sanctuary policies goes far beyond what Mayor Harold Washington intended when he established Chicago’s initial Sanctuary City framework in 1985 [1.2.4]. That policy—often referred to as the “Don’t Ask” rule—was designed for a specific purpose: to prevent police and city employees from inquiring about immigration status or assisting federal immigration enforcement, thereby fostering community trust so all residents could report crimes without fear of deportation [1.2.1, 1.2.3].

Washington would likely be dismayed to see that basic protection morph into a comprehensive social welfare system that competes for resources with long-neglected Black and Latino neighborhoods. The reality is that while massive funding flowed to emergency newcomer services, the progressive promise to invest heavily in Chicago’s historically disinvested communities remains largely unfulfilled.

Make no mistake: city and state sanctuary policies for undocumented migrants were part of a strategy, also deployed by other blue states, to offset significant losses in population. States like Illinois and cities like Chicago chose the sanctuary route rather than address the underlying causes of population loss, which would have required a serious reassessment of progressive frameworks characterized by ever-expanding government and continuous tax and fee increases.

Well over 400,000 residents—disproportionately middle- and upper-income households—have left Illinois since 2020 [6]. The primary driver is a heavy tax burden; Illinois residents pay roughly 52 percent more in total state and local taxes than the national average [6]. State and local tax and fee increases extract $18 billion more annually from residents than in 2019 [6]. In a survey conducted last May, half of Illinois respondents stated they would leave the state if given the means to do so.

Policy choices are driving out taxpaying middle- and upper-income families, replacing many of them with populations that are government-dependent. IRS migration data reveals that in 2000, those leaving Illinois generated an average of over $5,000 more in taxable income than those arriving [7]. During COVID, that gap exceeded $38,000 [7]. In the post-COVID period, the differential still exceeds $24,000 [7]. This gap contributes to weak growth in natural revenue, causing state and local governments to raise taxes and fees further to maintain existing programs, worsening the flight of residents [7].

Conclusions drawn from audits and recent Moody’s assessments point to slow natural revenue growth [8]. Revenue from non-tax increases fell far below inflation, reflecting overall weakness in an Illinois economy that ranks near the bottom by every major economic indicator, including employment, which has seen little private-sector job growth since pre-COVID 2019 [8]. Net of tax and fee increases, natural revenue gains over the last two decades have averaged a paltry $317 million—less than one percent [8].

While some political strategists view this demographic transition as a means to preserve congressional mapping metrics, it erodes the state’s productive tax base while increasing the percentage of Illinois residents who are government-dependent. Absent fundamental reconsideration of state and local policies, residents should expect more tax and fee hikes that will further damage Illinois’s capacity to generate natural revenue growth [8]. Moody’s noted lawmakers found it necessary to manufacture $1.1 billion in one-time and recurring revenues just to balance the current budget [8].

As for state and local sanctuary policies, there is an urgent need to return to a rational approach toward immigration. Granting extensive safety-net benefits to individuals who enter outside legal channels hurts public finances by fostering government dependency. It also undermines the rule of law, sending a confusing message to legal immigrants who follow established processes. Sanctuary status should, at the very least, not restrict the federal-local coordination necessary to enforce current immigration laws relating specifically to public safety and national security.

City Hall should use its home rule authority to help immigrants integrate into the economy quickly—enabling them to work, build businesses, and pursue the American Dream as generations did before them without taxpayer subsidies. This can be achieved by facilitating expanded work opportunities and granting temporary work permits and operational licenses to immigrant-owned businesses that meet municipal standards. Accelerating economic independence addresses employer labor shortages while reducing long-term reliance on taxpayer subsidies.

Footnotes & Citations

1. City of Chicago Office of Inspector General (OIG): Report on City Spending and Operations for New Arrivals Emergency Response (2022–2024). Confirms $639.7 million in total city/grant spending across 38 shelters for 46,282 migrants.
2. Wirepoints Research: Up to $410 million extra being spent on children of illegal immigrants at Chicago Public Schools (May 2024). Calculates estimated costs between $215M (8,900 students) and $410M (17,000 students) using CPS’s $24,132 per-pupil operating budget.
3. Illinois Auditor General: Performance Audit of Emergency Contracting and Staffing (Favorite Healthcare Staffing). Documents $78.5 million spent on standby time for nearly 470,000–500,000 hours of unworked contract time.
4. Illinois Auditor General & Department of Healthcare and Family Services (HFS): Audits of Health Benefits for Immigrant Adults/Seniors (HBIA/HBIS). Documents $1.6 billion in budget overruns above initial legislative appropriations.
5. Illinois Auditor General: Performance Audit of the Illinois Department of Employment Security (IDES) (FY2020–FY2022). Uncovers $5.24 billion in improper and fraudulent unemployment benefit payouts.
6. S. Census Bureau & Tax Foundation Data: Illinois Population Estimates & State-Local Tax Burden Rankings. Details state net migration losses (>400k) and Illinois’s ~52% higher-than-average tax burden footprint.
7. Internal Revenue Service (IRS) Statistics of Income (SOI): Migration Data (Illinois Inflow vs. Outflow AGI Trends, 2000–2024). Documents the historical and post-COVID income differentials between out-migrants and in-migrants.
8. Moody’s Investors Service: Credit Opinion & State of Illinois Revenue Analysis. Details Illinois’s <1% annual organic revenue growth trajectory over two decades and reliance on $1.1 billion in non-recurring budget adjustments.

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Paul Vallas formerly ran the public school systems in Chicago, Philadelphia and the Louisiana Recovery School District. He was a candidate for Mayor of Chicago.