States are increasingly looking to opioid settlement funds as an alternative to fill gaps left by waning federal funding.

• Federal pandemic relief is drying up, Trump administration actions are throwing into question once-reliable federal funding for social services and health care programs, and congressional Republicans are threatening cuts to Medicaid.

But: Recovery advocates, family members who have lost loved ones to addiction, and legal experts say the opioid settlement money has a specific purpose – to address the addiction and overdose crisis – not to fill other budget holes.

For example:

• Nevada lawmakers are considering a proposal to use $5 million in opioid settlement money for Temporary Assistance for Needy Families (TANF) in two counties, as previous funding through federal COVID-era relief is likely to have expired.
• The argument: Some are concerned the proposal does not have a direct link to opioids. But state officials insist it is an appropriate use of settlement funds because it will help relatives raising children whose parents have substance use disorder and families at risk of losing custody of children due to substance use. But it is unclear how the dollars would be targeted these specific populations.
• In Connecticut, the governor is asking lawmakers to redirect opioid settlement money to social services that were previously funded through other means.
• In Arizona, the legislature transferred $115 million in settlement money to the state prison system last year to help close a $1.4 billion budget deficit.

Why it’s important:

• Advocates worry that using opioid funds for services that, even if crucial, are only tangentially related to addiction risks a repeat of the tobacco settlement of the 1990s.
• The opioid settlements have more guardrails than the tobacco settlements did, but there is lax oversight and enforcement.
• But: Some safety net programs that do not directly address addiction can be a lifeline for people with OUD. Putting settlement funds towards them could be worthwhile if major cuts in federal spending imperil them.
• Many organizations that work directly on addiction and recovery issues are also facing potential funding cuts.

Source: Opioid cash grab: As federal funding dries up, states turn to settlement money (CBS)