At a meeting held in December 2022, the Mendocino County Board of Supervisors made the decision to allocate $63,000 from their opioid settlement funds towards addressing a budget shortfall. This move comes as part of an ongoing effort to utilize the settlement payments, which will continue to arrive annually until 2038, as a consistent source of revenue for the county.
In recent years, as state attorneys general have reached settlements totaling over $50 billion with companies involved in the production and sale of opioids, there has been a strong commitment to ensuring that these funds are used for addiction treatment and prevention. This commitment stems from the desire to avoid repeating the mistakes made during the tobacco settlement of the 1990s, where funds intended for smoking cessation programs were diverted to other purposes.
However, concerns have arisen regarding the transparency surrounding the utilization of these settlement funds across the country. Local leaders are grappling with the difficult decision of using the funds to address immediate financial needs or investing them in the fight against the ongoing opioid crisis. Mendocino County, located in rural Northern California and burdened with the highest rate of overdose deaths in the state, has chosen to allocate over $63,000, approximately 6.5% of their total settlement cash received over the first two years, to cover a general budget shortfall of $6 million. This amount will be used as a recurring payment, given the annual arrival of the settlement payments until 2038. To bridge the remaining gap, the board has tapped into retirement reserves and delayed repair projects and equipment purchases.
Glenn McGourty, chair of the board of supervisors, emphasized the legal obligation to balance the county’s budget and the need to find available funds. Vice Chair Mo Mulheren added that the use of the settlement funds for employee health insurance premiums, wage increases, and cost-of-living adjustments was justifiable due to the overprescription of opioids and the subsequent costs of addiction treatment for county employees and their families. Mulheren believes that these funds will help make the county “whole again” after years of financial strain caused by opioid-related health insurance claims.
However, individuals with substance use disorders and their loved ones have expressed a desire for the funds to be directed towards supporting recovery efforts and preventing opioid-related deaths within their communities. With over 100,000 Americans dying from drug overdoses in the previous year, there is a strong belief that the settlement funds should be used to address the consequences of corporate practices that promoted and distributed painkillers.
Mendocino County’s financial challenges are exacerbated by declining tourism and tax revenues, along with increasing costs for law enforcement, correctional facilities, and behavioral health programs, largely due to the impact of the opioid epidemic. This situation echoes the experiences seen with the tobacco master settlement agreement of 1998, where funds intended for anti-smoking initiatives were diverted to other uses over time. Matthew Myers, former president of the Campaign for Tobacco-Free Kids, highlights the growing concern about states’ track records in handling settlement funds, with an increasing amount being spent on unrelated expenses.
To address the potential misdirection of funds, attorneys general negotiating the opioid settlements have implemented restrictions on their usage. A minimum of 85% of the funds must be devoted to opioid remediation, with guidelines specifying various strategies for their allocation. The remaining balance can be used freely, but there are concerns about the potential for misuse. Different states have varying degrees of strictness in their guidelines. In California, for instance, 70% of the settlement funds are funneled into an abatement account, with spending strictly focused on future opioid remediation efforts as identified by the state. The state Department of Health Care Services has taken initiative in providing guidance and assistance to local governments to ensure appropriate use of the funds. They possess the authority to challenge misappropriation through legal means if necessary.
However, there is a caveat in the oversight system. The department can only regulate funds that come from the abatement fund and an additional 15% received directly by the state. The final 15% is allocated directly to local governments, who have the freedom to utilize the funds as they see fit in relation to opioids. This explains why Mendocino County was able to use $63,000 to address their budget shortfall, as well as their intention to allocate future funds in a similar manner. While this usage is technically legal, some individuals question its appropriateness.
Jacqueline Williams, executive director of the Ford Street Project, a nonprofit organization running Mendocino County’s sole adult residential addiction treatment program, expresses disappointment in funds being diverted away from directly combating the crisis. She believes that the magnitude of the need warrants a different allocation strategy for the opioid settlement money.
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Rohit Malhotra is a medical expert and health journalist who offers evidence-based advice on fitness, nutrition, and mental well-being. His articles aim to help readers lead healthier lives.
