Over the past two years, state attorneys general across the United States negotiated settlements with companies that manufactured or sold opioids, resulting in over $50 billion in legal settlements.
Mendocino County B.O.S.
The promise was clear: this money would be dedicated to addiction treatment and prevention, aiming to rectify the devastating consequences of the opioid crisis.
The memory of the 1990s tobacco settlement, where funds were diverted for purposes unrelated to smoking prevention, loomed large, and authorities vowed not to repeat that mistake.
Unfortunately, recent developments in at least one California county, Mendocino, echo this history, and concerns about the lack of transparency regarding how these crucial funds will be utilized persist.
Mendocino County, situated in rural Northern California, currently reports the highest rate of overdose deaths in the state. However, the county's board of supervisors recently made a controversial decision to allocate over $63,000 of opioid settlement funds—equivalent to about 6.5% of the county's total settlement allocation in the first two years—to cover a general budget deficit of approximately $6 million.
These funds were earmarked for purposes such as employee health insurance premiums, wage increases, and cost-of-living adjustments. The board intends to rely on these funds as an ongoing source of revenue, as opioid settlement payments are scheduled to continue until 2038.
The decision has sparked outrage among community members, especially individuals affected by substance use disorders and their loved ones. Instead of supporting recovery efforts and preventing opioid-related deaths, as originally intended, these funds are being diverted to plug immediate budget gaps. This diversion is a cause for concern, particularly given the alarming statistic that over 100,000 Americans died from drug overdoses just last year.
Mendocino County officials argue that they already allocate substantial resources to address substance abuse issues, but recent declines in tourism and tax revenues, coupled with rising costs for law enforcement and behavioral health programs due to the opioid epidemic, have left them in a financial bind.
This situation eerily mirrors the misuse of funds from the tobacco master settlement agreement of 1998. While states initially received over $240 billion to combat smoking, a lack of legal restrictions allowed a significant portion of these funds to be diverted for various unrelated purposes.
Over time, the track record of states in using these funds for their intended purpose has worsened, with less than 3% of the annual payouts currently being utilized for smoking cessation or prevention efforts.
To prevent history from repeating itself, attorneys general negotiating the opioid settlements established strict guidelines. At least 85% of the funds must be dedicated to opioid remediation, with specific strategies outlined. However, the remaining 15% of the funds can be used more flexibly, a provision that has raised concerns among advocates.
States like California have taken a more stringent approach, with 70% of settlement funds channeled into an abatement account, from which funds are allocated to counties and cities for future opioid remediation efforts.
Yet, the final 15% of the state's settlement money goes directly to local governments and can be utilized for any purpose they define as opioid-related, allowing Mendocino County to allocate funds to fill its budget shortfall.
While such use of funds may be legally permissible, larger questions about its appropriateness continue to linger. Diverting these critical funds for other purposes, even if it falls within the bounds of the law, demands serious scrutiny.
Stay frosty California, it's rough out there.