At a current Nevada legislative committee listening to, lawmakers confronted off with members of the governor’s administration over the right way to fill gaping holes within the state’s upcoming price range.
At problem: whether or not opioid settlement cash — paid by well being care firms that had been sued for fueling the opioid disaster and meant to assist states abate dependancy — needs to be funneled to 2 counties for a safety-net program, Non permanent Help for Needy Households, which is aimed toward serving to low-income youngsters and households.
Earlier funding “will no longer be available after June 30, 2025,” the price range proposal says. By then, billions of {dollars} in covid-era reduction from the federal authorities — together with a set-aside for TANF, which may cowl emergency assist, job coaching, youngster care, and extra — is prone to have expired.
Recognizing each the necessity for and uptake of this help, Republican Gov. Joe Lombardo’s price range proposal directs $5 million in opioid settlement money to shore up this system within the state’s most populous counties, Clark and Washoe.
The prospect of such trade-offs is smacking many states within the face as they embark on price range season.
Not solely is the river of federal pandemic reduction that flowed to public well being, training, meals help, youngster care, and extra over the previous few years drying up, however a deluge of actions from the Trump administration has thrown into query once-reliable federal funding for a myriad of social providers and well being care applications. Congressional Republicans have additionally threatened cuts to Medicaid, a joint federal and state medical insurance program for a lot of low-income folks.
Collectively, these monetary headwinds have left many states trying to find different funds to keep up essential providers.
Opioid settlement cash can seem to be a pretty choice. Greater than $10 billion has landed in state and native authorities coffers lately and billions extra are set to reach over the subsequent decade-plus.
However restoration advocates, members of the family who’ve misplaced family members to dependancy, and authorized specialists say that cash has a particular goal: to handle the continued dependancy and overdose disaster.
Even when $5 million is a small portion of the tons of of hundreds of thousands Nevada has obtained, some say spending it elsewhere units a troubling precedent. Nevada Meeting Speaker Steve Yeager, a Democrat, raised this concern at the February listening to.
“There doesn’t seem to be a direct link to opioids” within the governor’s proposal directing these {dollars} to TANF, he mentioned. Settlement cash shouldn’t be used “to backfill budget accounts.”
Richard Whitley, director of the state’s Division of Well being and Human Companies, insisted on the listening to that this was an acceptable use of settlement {dollars}. The cash flowing via TANF will assist “relatives who are raising children whose parents are substance-abusing,” he mentioned.
As well as, Elizabeth Ray, a spokesperson for the Republican governor, informed KFF Well being Information that the cash would assist households vulnerable to dropping custody of their youngsters because of substance use, with the objective of protecting youngsters of their houses and “ultimately reducing the need for foster care placements.” Implementing this program via the state’s TANF system would “reduce start-up costs and implementation time,” she wrote in a press release.
However TANF is out there to many households residing in poverty and it was unclear how these {dollars} could be focused to such a subset.
Related price range conflicts have surfaced in Connecticut — whose Democratic governor, the CT Mirror reviews, is asking lawmakers to redirect opioid settlement cash to social providers that had been beforehand funded via different means, together with federal {dollars} — and Arizona, whose legislature transferred $115 million in settlement cash to the state jail system final yr to assist shut a $1.4 billion price range deficit.
Nationwide restoration advocate Ryan Hampton expects to see extra efforts like this nationwide.
“I have a very high level of fear that states are going to be tapping into these settlement dollars in every creative way they can to fill some of these budget shortfalls,” he mentioned. “It’s a grave misuse of funds and one that is going to have dire consequences.”
Though nationwide overdose deaths have declined just lately, tens of hundreds of People are nonetheless dying from overdoses every year. In just a few states, together with Nevada, such deaths elevated within the 12 months main as much as September.
“The intent of these dollars is to save lives right now,” mentioned Hampton, who’s in restoration from opioid dependancy and based a Nevada-based restoration advocacy group. He submitted a public remark opposing the Nevada governor’s price range proposal.
Hampton and different advocates fear that utilizing opioid funds for providers that, even when essential, are solely tangentially associated to dependancy dangers a repeat of the tobacco settlement of the Nineteen Nineties.
At the moment, cigarette producers agreed to pay state governments billions of {dollars} yearly. Initially, states spent a bit of that cash on anti-smoking applications, mentioned Meg Riordan, a vp of analysis on the Marketing campaign for Tobacco-Free Children, which tracks states’ spending on tobacco prevention applications.
However over time, states encountered price range crunches and lots of raided or dissolved belief funds they’d set as much as defend tobacco cash. As a substitute, they funneled the money immediately into their common funds and spent it on infrastructure tasks and price range shortfalls.
“Once the funds start going somewhere else, there’s a risk that they won’t come back,” Riordan mentioned.
Tobacco use stays a main explanation for preventable loss of life in America.
The opioid settlements have extra guardrails than the tobacco settlement did, however KFF Well being Information’ multiyear investigation discovered lax oversight and enforcement.
Nevada and Connecticut are amongst 13 states which have explicitly restricted the apply of supplantation, or utilizing opioid settlement funds to interchange present funding streams.
Whitley, Nevada’s DHHS director, and the governor’s workplace have insisted that none of their proposed makes use of of settlement funds are examples of supplanting.
On the February listening to, Whitley repeatedly prompt that the price range proposal was misworded, making a misunderstanding. “We’ll clean that up with the language,” he mentioned.
However he additionally emphasised the significance of settlement {dollars} as federal funding sources diminish. “As ARPA [the American Rescue Plan Act] goes away and other flexible funding goes away to address problems, this becomes one that really we have to rely on,” he mentioned.
That perspective appears affordable to JK Costello, director of behavioral well being consulting for the Steadman Group, an organization that he mentioned helps a couple of dozen native governments throughout the nation administer the settlements.
Ideally settlement cash provides to present providers, he mentioned, however realistically, some safety-net applications, even when they don’t immediately deal with dependancy, is usually a lifeline for folks with opioid use dysfunction. If main cuts in federal spending imperil these applications, utilizing settlement funds to avoid wasting them could possibly be worthwhile.
“Getting people into great treatment when their housing voucher is cut isn’t really that helpful,” Costello mentioned. “Treatment isn’t going to work if they’re not able to eat or feed their kids.”
The difficult factor is that many group organizations that work immediately on dependancy and restoration points are additionally feeling the crunch of expiring federal assist and anticipated federal program modifications that would scale back their assets, Costello mentioned. When everyone seems to be strapped, deciding the place restricted settlement {dollars} can do probably the most good turns into more and more difficult.
Some locations presciently put aside opioid settlement funds in “emergency” or “sustainability” accounts that could possibly be tapped for dependancy providers in case of declining federal assist. South Dakota has such a fund with greater than $836,000, based on its 2024 opioid report. None of it has been used but.
Kristen Pendergrass, vp of state coverage for the addiction-focused nonprofit Shatterproof, hopes states flip to wet day funds first, earlier than raiding settlement accounts.
Nevada has $1.23 billion in its wet day fund, greater than the nationwide median, based on The Pew Charitable Trusts.
“It would be a slippery slope if we stop paying attention now” and permit settlement funds for use for something, Pendergrass mentioned. “The money was won to remediate harms and save lives. It should be used that way.”
