Author: Alliant

As some $54 billion over the next 15 years in opioid settlement funds reaches states and local governments across the nation, it is important to understand the terms of these settlements as they pertain to how the funds may be distributed and used and to stay current as to how states and local governments have begun to develop allocation plans for and make expenditures of the money. Unfortunately, some states have been less than transparent about how they intend to allocate most of their funds and in some places, controversy as to how to best to spend them has arisen.

The influx of such large sums of money to states and local communities to address such a widespread problem has led to reasonable demands that the funds be spent effectively and equitably. However, the issue of addiction is complicated and there are no shortages of opinions as to how best to address it among those in the fields of scientific research, social services, politics, and criminal justice.

According to the terms of the opioid settlement agreements, some 85% of the monies must be spent on opioid remediation uses such as addiction treatment and prevention.ⁱ  Another 15% may be spent on non-opioid remediation uses such as administrative expenses or past opioid litigation related expenses. States are required by the settlement agreement to form an advisory committee to provide guidance as to spending the opioid remediation funds (85%). These groups must have formal guidelines and a process for receiving input from local governments and the public. As of January 2023, approximately 33 states had formed such committees to make spending recommendations. 19 of these committees will have only nonbinding advisory authority as to spending. 14 states’ committees will directly disburse funds from the settlement to those with spending authority.ⁱⁱ

From state to state, however, spending to address priorities differs dramatically, usually at the local government level where most of the funds are allocated. In some localities this may result in paying to open more addiction treatment sites while in others it means buying more police cruisers.

Consequently, in some states and local communities, the topic has become a source of controversy and contention. In Pennsylvania, where the state expects to receive at least $2.2 billion in settlement funds,ⁱⁱⁱ there is a battle being waged over whether to spend money on policing or treatment.^iv By court order in Pennsylvania, an opioid misuse and addiction abatement trust was created with a 13-member oversight board^v to ensure that counties and local governments spend the settlement monies appropriately. It recently provided guidance as to the proper expenditure of the funds on law enforcement.

In New York late last year, the state rejected a proposal from the state’s Opioid Settlement Fund Advisory Board to spend some of the $2 billion it will receive in settlement funds on overdose prevention centers, otherwise known as safe injection sites.^vi These facilities allow people to use illegal drugs under staff supervision. According to the state’s letter denying the request, such facilities are in violation of state and federal laws that make it illegal to maintain property where controlled substances are consumed.

Recently, Reuters surveyed all 50 states about whether there is a process in place for non-governmental organizations involved in addressing the effects of the opioid crisis to apply for funds from the settlements. Reuters also looked for any information online about funding applications in each state. The results of the Reuters effort shows that only 16 states have a central, statewide, publicly available process for organizations to apply. Other states say they plan to have such a process soon. Many others did not supply any information in response to the Reuters’ inquiry.^vii

Surprisingly, the settlement agreements do not require states to publicly report on their expenditures of the 85% of the settlement funds to be used for opioid remediation. The settlements only require transparency as to spending for 15% of the money (to be used for non-opioid remediation). Therefore, the transparency issue is causing many to question how effectively and equitably the funds are being spent.

According to an investigation conducted by Kaiser Health News (KHN) and Christine Minhee, founder of OpioidSettlementTracker.com,^viii to date only 13 states have committed to detailed public reporting of 100% of their spending of these vast sums of one-time money. As of late May 2023, only 15 state reports (including local governments within those states) had been filed in a national tracking database for the non-opioid remediation funds (15%) and in those cases, most reference only spending amounts for attorneys’ fees and litigation costs.^ix When the reported spending of these non-remediation use funds is not for these types of costs, the reports only include dollar amounts and do not itemize the spending beyond its non-opioid remediation use nature.

In North Carolina, the state Attorney General has established, via a Memorandum of Understanding (MOU) with local governments,^x a very specific list of proper uses of the funds. The MOU also provides for a methodology for local governments receiving settlement funds to seek local government authorization before any funds are spent and to report to a centralized dashboard each authorized expenditure within 90 days of obtaining authorization for it. Annual reports are also required.^xi With North Carolina expected to receive $750 million in settlement funds, ^xii and with most of the funds being allocated to county governments, there is already developing tension about what programs are scientifically supported to treat and prevent addiction and which are not. Some of the disputes center around whether faith-based treatment programs should be funded and whether certain approved medications prescribed for opioid use disorder may be a part of any funded program.^xiii