Key Fiscal Impacts

CSI estimates that the city will have spent between $36.3 million and $39.1 million on migrant support services by the end of 2023. This range reflects low (year-to-date average) and high (last-month average) migration scenarios. The estimates do not include private donations made to support the incoming migrants nor in-kind contributions provided by charitable organizations.

This is an increase of between $8.3 million and $11.1 million (30–40%) upon the total as of October 16.

The City’s spending patterns suggest that its migrant support services exhibit high fixed costs and low variable costs. Over the course of 2023, migrant arrival rates and shelter capacity have been weak predictors of spending. This suggests that program expenditure is chiefly driven by overhead costs like facility rents and staff salaries.

As a result, though it will help relieve shelter occupancy, the City’s decision to shorten the maximum length of shelter stay will only induce a minor cost reduction.

New Migrant Arrivals and Shelter Levels

Through October 16, 24,415 unique migrants have arrived in Denver and received government support. 18,519 of them spent at least one day in official shelters and each stayed for an average of just over 18 days.
Between September 16 and October 16, Denver experienced a migrant arrival rate over three times higher than the year-to-date average. From January 1 through October 16, an average of 74 new migrants per day arrived at local shelters. Over the last month, however, the daily average has risen to 232. This level significantly exceeds even that observed during the surge in May. Many of these people arrived on buses from Texas following a dramatic spike in U.S.–Mexico border crossings.iii Though the number of daily migrants remains higher than usual, the surge seems to be abating (see the graph above).
According to the city government’s dashboard of migrant sheltering and support data, there were 3,051 migrants in official shelters on October 16.iv This is close to the highest concurrent number that the city has ever accommodated; due to declining numbers of arrivals, though, this volume has fallen somewhat since then. Of the migrants who spend time in Denver’s shelters, about 15% stay within the city long-termv and 30% stay within Colorado.vi

Because the city government did not anticipate the need to launch a migrant sheltering program until last November, Denver’s 2023 budget includes no provision for the cost of its operation. The City has, to date, covered this cost through its contingency fund and some of its agencies’ dedicated budgets while requesting private donations and federal aid.vii So far, Denver has received $3.5 million from the state government and $909,000 from the national government to reimburse its sheltering costs. In June, the Department of Homeland Security committed a further $8.6 million of future funding.

These contributions leave about $15 million (54%) of the total October 16 cost unaccounted-for.

It is unclear how the City’s spending on migrant services has impacted other budgetary endeavors. Although Denver’s contingency fund is large enough to fund the initiative through the rest of 2023 if it must, government agencies have been made to devote substantial shares of their resources to migrant support throughout the year.

CSI estimates that the total unbudgeted liability of Denver’s migrant services will be almost $40 million by the end of December. This is nearly as much as the annual cost of the Homelessness Resolution Fund, whose establishment required express voter approval.viii

Bottom Line - The recent surge of immigration at the southern border, like others that occurred earlier this year, is largely a result of volatile federal policy and unwillingness to pursue comprehensive immigration reform. One of the consequences of that disorder is the financial burden that it thrusts upon local governments like Denver’s, which has incurred costs beyond its normal budgeted expenses as a result. Though these costs are currently being covered by contingency funds and partially reimbursed by external grants, they eventually risk either crowding out other financial priorities or increasing the ongoing cost of governance within the city—a cost that Denverites have to pay.