Researchers generally agree that the main areas where illegal immigrants increase governmental costs are education, healthcare, and criminal justice, but that illegal immigrants also pay property, sales, and some income taxes to offset governmental costs. It appears that most of the financial burden of illegal immigration is borne at the state and local level because illegal immigrants qualify for few federally funded benefits. The two most comprehensive studies reviewed concluded that the costs of illegal immigrants outweighed the revenues at the state and local level. Several less-comprehensive studies showed more mixed results because they focus on different levels of government or don’t consider all major costs or revenues attributable to illegal immigrants. Illegal immigrants tend to be concentrated in low-skill, low-education industries such as farming, cleaning, and construction. National job market studies we reviewed showed that illegal immigrants have a negative impact on wages and job opportunities of low-skilled, least-educated native-born workers. Overall, Kansas-specific information is sparse: State agencies generally haven’t tried to identify specific costs or revenues attributable to illegal immigrants for Kansas. Similarly, neither the Kansas Department of Labor, nor any of the Kansas universities have tried to study the economic effect of illegal immigration on this State.
Department of Labor: Reviewing Error Rates for Unemployment Benefit Payments, A K-GOAL Audit of the Department
For 2005, the U.S. Department of Labor reported that Kansas had the highest unemployment benefit overpayment rate in the nation; nearly 45% of all unemployment benefits were paid in error. Almost all of Kansas’ payment errors occurred because unemployed workers didn’t register for job services –an eligibility requirement contained in State law. Historically, Kansas’ Department of Labor hasn’t enforced the requirement to register for job services, and there have been no consequences at either the federal or State level. To help reduce the unemployment benefit overpayment rate, in November 2006 the Department implemented a new regulation that requires only the “highest need” unemployed workers to register for job services. The regulation eliminates the registration requirement for more than 90% of the unemployed Kansans who previously were required to register. Although Kansas’ error rate likely will drop sharply as a result of the new regulation, the lower error rate is being achieved at the expense of the broader goal of helping unemployed workers find jobs through the registration process. Other states we contacted require most unemployed workers to register, but have taken different approaches to keeping their error rates low, including cutting off benefits for workers who fail to register, and looking for ways to automatically register unemployed workers when they apply for benefits.
Department of Labor: Reviewing the Effectiveness of Accident Prevention Programs Required Under the Workers’ Compensation Law (limited-scope audit)
The Legislature created the Accident Prevention Program in 1993 to improve workplace safety and reduce accident claims. In our 1999 audit of the Program, we concluded that the Department of Human Resources (now Labor) was doing almost nothing to ensure that insurance companies complied with this aspect of the State’s workers’ compensation law. As a result, the 2000 Legislature imposed a higher standard on insurance companies and strengthened the Department’s oversight role for the Program. However, this audit found that the Department still is providing inadequate oversight regarding the Accident Prevention Program. Department officials haven’t made any significant changes to their oversight of insurance companies’ accident prevention services since the law was changed in 2000.
Unemployment Benefit Payments: Reviewing Benefit Payouts and Changes in the Number of Employees Determined To Be Eligible (limited-scope audit)
From 2002 to 2004, unemployment benefit payments in Kansas increased dramatically. In 2003, when the unemployment rate was 5.3%, payments peaked at $375 million or more than twice the amount paid out in 1994, the last time the unemployment rate was similar. Concerns had been expressed that the increase in payments was attributable to the Department of Labor adopting a more employee-friendly philosophy in deciding claims and appeals. This does not appear to be the case. There were no significant increases in recent years in the rate at which applicants were granted benefits, or in the rate of appeals being decided in favor of employees. More likely, the increase was caused by the combination of more people being unemployed, their benefits being based on higher wage levels, and their periods of unemployment lasting longer than in the past.
Reviewing Certain Aspects of Utility Regulation by the Kansas Corporation Commission
In general, we found that the Corporation Commission hasn't developed written procedures for granting certificates of convenience and necessity, but it does have standard practices. The Commission applied these practices consistently in all cases except for when Rural Telephone Company applied to serve an area that was already served by United Telephone Company. Treatment of this application may have been different in part because this was the first application that would allow competition within a local telephone service area. The Commission also hasn't developed written procedures for handling ratepayer complaints. Nonetheless, the complaints we reviewed appeared to be handled well. Although our review of the staff’s follow up on Commission orders identified only three instances where follow-up appeared to be deficient, those instances occurred on fairly major issues. In addition, we identified some instances where the Commission cited serious and ongoing problems with the services a utility provided, but never required the utility to take corrective action. The Commission hasn’t established any controls to prevent conflicts that might arise from hiring employees who've worked for utilities. Commissioners told us they are currently working on policies to address potential conflicts of interest.
Reviewing Selected Issues Related to Workers’ Compensation
For the most part, Kansas’ workers’ compensation benefits are neither high nor low when compared with other states. Based on available information, Kansas’ premiums also were slightly below the median for other states and increased at about the same rate as premiums nationally. Over the past few years, laws have been enacted that increased maximum payments for disabilities and death benefits, and required vocational rehabilitation to be provided for many workers’ compensation cases. No information exists to determine their exact cost impact. Other states have enacted a number of measures aimed at reducing litigation, controlling medical costs, reducing fraud and improving workplace safety. Those measures include using arbitration services, implementing medical fee schedules, performing utilization and bill reviews, creating fraud hotlines and investigation units, and overseeing workplace safety. Finally, we found that workers’ compensation agencies in some states have developed extensive data collection systems that allow them to answer basic questions about workers’ compensation, such as which injuries are most frequent or most expensive.
Examining Increases in Expenditures from the State Workers’ Compensation Fund
Between fiscal years 1983 and 1992, expenditures from the Fund more than quadrupled to nearly $33 million. The Fund’s expenditures increased primarily because more claims were opened than closed each year, creating an ever-growing pool of active claims for which expenses are being incurred. In addition, medical costs have skyrocketed, and amounts that can be paid in compensation for lost wages have increased over the years. Because of legislative actions and judicial decisions, Kansas currently has one of the most liberal second-injury funds of all the states we contacted. Limiting the Fund’s coverage would not reduce workers’ compensation costs. It would simply shift those costs from the Fund back to the insurance companies and employers. Other states have implemented a number of alternatives to control workers’ compensation costs, but Kansas does not have the basic management information needed to take similar measures. Although administrative costs have increased more slowly than benefit-related costs, the Department could do more to control attorney costs.
The State’s three major training programs are well coordinated, but the audit raises administrative concerns about each one. The Job Training Partnership Act, which primarily serves economically disadvantaged people or those who have other barriers to employment, is being administered in compliance with federal requirements. But funding inmate programs with Job Training Partnership Act funds may create a potential liability for the State if the Department of Labor disallows the expenditure of those funds for inmates who are not released within a reasonable period of time.
Wage Rates for Construction of the Coliseum at Kansas State University
For Riley County, some of the specific hourly wage rates developed through surveys by the Department of Human Resources are significantly higher or lower than rates for surrounding and similar counties. Several rates also changed significantly from 1985 to 1986. The use of data supplied by one contractor for individual rate determinations and other weaknesses in the Department’s methodology have helped cause such variations.
Reviewing Accountability for Protesting Unemployment Claims
In seven of the eight agencies reviewed, a specific person has been assigned to review unemployment claims. Little training and few guidelines have been provided for properly responding to claims. The audit describes steps planned by the Department of Human Resources to assist agencies in responding to unemployment claims.
Guidelines developed by the Department of Human Resources can help reduce the amount of judgment involved in deciding who is qualified for unemployment claims, but they cannot eliminate it. Most employers say they protest questionable claims, but fewer will appeal the decision if their protest is over-ruled. The State agencies that fail to protest or respond to questionable claims generally do not understand about when a response is warranted.
Examing Space Utilization At The Kansas State University Veterinary Medicine Complex