At a latest Nevada legislative committee listening to, lawmakers confronted off with members of the governor’s administration over the best way to fill gaping holes within the state’s upcoming finances.
At difficulty: 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 habit — needs to be funneled to 2 counties for a safety-net program, Temporary Assistance for Needy Families, which is geared toward serving to low-income kids and households.
Previous funding “will no longer be available after June 30, 2025,” the budget proposal says. By then, billions of {dollars} in covid-era aid from the federal authorities — together with a set-aside for TANF, which might cowl emergency support, job coaching, little one care, and extra — is more likely to have expired.
Recognizing each the necessity for and uptake of this help, Republican Gov. Joe Lombardo’s finances 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 finances season.
Not solely is the river of federal pandemic relief that flowed to public well being, training, meals help, little one care, and extra over the previous few years drying up, however a deluge of actions from the Trump administration has thrown into question once-reliable federal funding for a myriad of social providers and health care programs. Congressional Republicans have additionally threatened cuts to Medicaid, a joint federal and state medical health insurance program for a lot of low-income folks.
Together, these monetary headwinds have left many states attempting to find different funds to take care of essential providers.
Opioid settlement cash can appear to be a horny choice. More than $10 billion has landed in state and native authorities coffers lately and billions extra are set to arrive over the following decade-plus.
But restoration advocates, relations who’ve misplaced family members to habit, and authorized specialists say that cash has a selected function: to handle the continuing habit and overdose disaster.
Even if $5 million is a small portion of the a whole lot of thousands and thousands Nevada has received, some say spending it elsewhere units a troubling precedent. Nevada Assembly Speaker Steve Yeager, a Democrat, raised this concern at the February hearing.
“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 Department of Health and Human Services, insisted on the listening to that this was an applicable use of settlement {dollars}. The cash flowing by means of TANF will assist “relatives who are raising children whose parents are substance-abusing,” he mentioned.
In addition, Elizabeth Ray, a spokesperson for the Republican governor, informed KFF Health News that the cash would assist households susceptible to dropping custody of their kids as a result of substance use, with the aim of protecting children of their properties and “ultimately reducing the need for foster care placements.” Implementing this program by means of the state’s TANF system would “reduce start-up costs and implementation time,” she wrote in a press release.
But TANF is out there to many households residing in poverty and it was unclear how these {dollars} can be focused to such a subset.
Similar finances conflicts have surfaced in Connecticut — whose Democratic governor, the CT Mirror reports, is asking lawmakers to redirect opioid settlement cash to social providers that had been beforehand funded by means of 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 finances deficit.
National 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.”
National restoration advocate Ryan Hampton says, “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.”(Seth Wenig/AP)
Although nationwide overdose deaths have declined recently, tens of 1000’s of Americans are nonetheless dying from overdoses annually. In a number of states, together with Nevada, such deaths increased 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 habit and based a Nevada-based recovery advocacy organization. He submitted a public comment opposing the Nevada governor’s finances proposal.
Hampton and different advocates fear that utilizing opioid funds for providers that, even when essential, are solely tangentially associated to habit dangers a repeat of the tobacco settlement of the Nineteen Nineties.
At that point, cigarette producers agreed to pay state governments billions of {dollars} yearly. Initially, states spent a piece of that cash on anti-smoking applications, mentioned Meg Riordan, a vp of analysis on the Campaign for Tobacco-Free Kids, which tracks states’ spending on tobacco prevention applications.
But over time, states encountered finances crunches and plenty of raided or dissolved belief funds they’d set as much as shield tobacco cash. Instead, they funneled the money immediately into their basic funds and spent it on infrastructure tasks and finances shortfalls.
“Once the funds start going somewhere else, there’s a risk that they won’t come back,” Riordan mentioned.
Tobacco use stays a leading cause of preventable death in America.
The opioid settlements have extra guardrails than the tobacco settlement did, however KFF Health News’ 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 switch current 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.
At the February listening to, Whitley repeatedly urged that the finances proposal was misworded, making a misunderstanding. “We’ll clean that up with the language,” he mentioned.
But 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 few dozen native governments throughout the nation administer the settlements.
Ideally settlement cash provides to current providers, he mentioned, however realistically, some safety-net applications, even when they don’t immediately deal with habit, is usually a lifeline for folks with opioid use dysfunction. If main cuts in federal spending imperil these applications, utilizing settlement funds to save lots of them may very well 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 tough factor is that many neighborhood organizations that work immediately on habit and restoration points are additionally feeling the crunch of expiring federal support and anticipated federal program adjustments that would scale back their sources, Costello mentioned. When everyone seems to be strapped, deciding the place restricted settlement {dollars} can do essentially the most good turns into more and more difficult.
Some locations presciently put aside opioid settlement funds in “emergency” or “sustainability” accounts that may very well be tapped for habit providers in case of declining federal support. 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.”
Aneri Pattani:
apattani@kff.org,
@aneripattani
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