What could have been
The $115 million in opioid settlement money sent to state prisons left a lot of missed opportunities on the cutting room floor.
Arizona is in its third year of divvying up the hundreds of millions of dollars from pharmaceutical settlement lawsuits intended to mitigate the decades of devastation the opioid crisis continues to cause.
This year’s statewide allotment of that money will go entirely to the state prison system.
But that windfall for prisons came at the cost of several potential life-saving programs like setting up detox centers in struggling rural counties, supplying school nurses with naloxone to reverse overdoses and giving universities grants to find best practices to treat the ever-evolving epidemic, according to a draft spending plan from the Arizona Attorney General’s office.
State legislators and Gov. Katie Hobbs gave this year’s $115 million of the opioid settlement money to the Department of Corrections to use for opioid-related treatment in prisons, including $75 million to backfill last fiscal year’s prison spending.
State prisons provide medication-assisted treatment to ease the brutal withdrawal of suddenly halting opioid use. But the opioid epidemic exists outside of prisons, too, and the opioid settlement money is supposed to fund a variety of solutions.
The Arizona Attorney General’s draft opioid spending planning for FY2025
$15 million: Grants to rural county governments and providers to create evidence-based detox centers in places with the greatest need for them.
$15 million: Grants for schools and other providers to train school counselors on opioid prevention designed to meet the needs of the target school population.
$11.5 million: Grants for new re-entry programs to help formerly incarcerated people affected by the opioid crisis reintegrate into society.
$10 million: Increase medication-assisted treatment in rural areas, increase the supply of naloxone across the state and create a statewide media program between the governor and AG offices on opioid remediation messaging.
$10 million: Medical care to help incarcerated people who are withdrawing from opioids.
$5 million: Grants for veterans services organizations that treat opioid use disorder.
$5 million: For universities to research opioid remediation tactics, new treatments and best practices while partnering with stakeholders to effectively use resources.
$3 million: Grants to regional emergency shelters serving homeless populations and helping people transition into housing.
$1 million yearly: To fund a bureau in the AG’s office to manage opioid remediation programs and collaboration across the state.
$500,000: For naloxone vending machines
$100,000: Grants for education/community groups to purchase naloxone for school nurses to have on hand.
A series of national settlements reached since 2021 forced big pharma companies and drug manufacturers to cough up billions that have been distributed across the country to combat the opioid crisis.
Those companies’ complicity in the overprescription of painkillers got people hooked on opioids, and the national crackdown on prescription opioids has led many users to transfer to cheaper options like heroin and fentanyl.
Former Gov. Doug Ducey championed a set of laws intended to address the opioid crisis in 2018 that made it harder for doctors to prescribe opioids, allowed more people to administer naloxone and put money toward treatment programs.
But overdoses continued to spike.
Five people die from opioid overdoses every day in Arizona. There have been 724 confirmed opioid deaths so far this year, and 1,928 last year, according to the Arizona Department of Health Services. 2022’s deaths were slightly down from the previous year after continuously climbing since Ducey declared a state emergency in 2017.1
But deaths now more than double what they were in 2017, when Arizona was alarmed enough to ramp up efforts to combat opioid overdoses.
This year, the AG’s office planned on dispersing $75 million to $82 million of those settlement funds, based on which appropriations the Legislature would approve, per spokesperson Richie Taylor.
To distribute such large sums of money, 90 cities and towns and all 15 counties signed onto the One Arizona Plan in August 2021. The entire pot of money is at an estimated $1.12 billion over 18 years — 56% of that will go to local governments and 44% to a statewide fund. The yearly allocations are fluid based on when the money from the various lawsuits rolls in.
The AG’s Office held town halls in places like Cochise and Mojave counties and heard the need for detox and rehabilitation centers to meet the increasing demand that the growing addiction crisis brings to their communities.
“I would frame it as a missed opportunity. This was really a well-thought-out plan that was developed with stakeholder input about what really was needed,” Taylor said.
The idea to sweep the funding into the prison budget was designed to solve Arizona’s budget crisis, not Arizona’s opioid crisis.
Budget negotiations took place behind closed doors over a few weeks, and sweeping opioid money wasn’t part of Hobbs’ budget proposal at the start of the year. The state faced a $1.4 billion deficit, and $115 million in opioid funding plugged a significant part of that hole.
More than $50 million of that went to repay prisons’ costs for treatment already provided. And 77% of that went to Hepatitis C-related expenses.
Under the One Arizona agreement, one approved purpose is to “support treatment of (opioid use disorder) and any co-occurring… conditions.” Hepatitis C is a bloodborne virus that most commonly happens from unsafe injection practices, unscreened blood use and sex.
“(Hepatitis C) treatment obviously is a need. But, in our estimation, a hard line to draw for an opioid settlement fund purpose,” Taylor said.
The AG’s office was outraged when Hobbs signed a budget that was balanced on the backs of users who need treatment and the local communities struggling with people with addictions lining the streets.
Arizona Attorney General Kris Mayes sued Hobbs and lawmakers, arguing the sweep to backfill prisons was an illegal use of the opioid funding. She argued that misusing the money could put at risk hundreds of millions of dollars in future payments from the One Arizona agreement.
But she lost the fight in court.
While the judge in the case said Mayes’ arguments would persuade him as a policymaker, based on state law, that money was legally subject to appropriation by the Legislature.
The fund transfer was legal, he concluded. But it’s probably not the right thing to do.
It was a rare display that pitted two Democratic allies at the top of Arizona’s government against each other, with Hobbs on the side of Republican legislative leadership.
"The Attorney General is flatly wrong on the law and mischaracterized the opioid funding in the bipartisan budget," Hobbs’ spokesperson, Christian Slater, said after the ruling. "Today's ruling reflects those facts. Governor Hobbs is a social worker who secured a bipartisan agreement to treat victims of the opioid crisis and will continue to defend that funding."
But the court case was also the funeral of proposed funding for 12 different areas outlined in the One Arizona funding plan. The AG proposed $100,000 to give naloxone to school nurses, a project Republican Superintendent of Public Instruction Tom Horne is now working on.
The AG had also proposed $11.5 million for coordinated re-entry programs to help those leaving prison reintegrate into society. And a $9 million allocation over three years could have gone to emergency shelter programs.
To be clear, it’s unlikely the proposals from a Democratic Attorney General’s office would have been accepted as-is by a Legislature with Republicans in the majority.
But if the funds hadn’t been allocated almost entirely to one department, people in and outside of prisons, in active addiction and at risk for it, could have been helped by a multifaceted set of solutions intended to address a complex issue that lacks a single solution.
The entire issue has been all too reminiscent of the $246 billion tobacco settlement in the 1990s when states spent their allotment of the funds on budget gaps, remediating roads, and even renovating a morgue in one state, per Politico.
There are more guardrails around the opioid settlement dollars this time. Still, the scale of the funding and the problem stymie accountability measures. And the settlement money doesn’t come with the same level of oversight as federal grants, like the American Rescue Plan Act.
Mayes has pledged to monitor how the opioid money is spent throughout state prisons to ensure the spending doesn’t violate the terms of the settlement agreement and cost Arizona much more in the long run.
“I will continue to do what I was elected to do … and protect these opioid settlement funds that too many people lost their lives for,” she said in a statement before suing to stop the fund transfer to prisons.
That state of emergency came with heightened reporting criteria, which is why we have access to this data.
Thanks for the backstory on how the money was allocated. I really appreciate Mayes’ thoughtful list of uses for the funds. I was part of the bipartisan team that put together ideas for the big opioid bill that Ducey signed. It was one of the bright spots of his administration. When I was still in office and ranking Dem on the Health Committee, there was talk about updating it, but that never happened.
Dougs comments are spot on. The drug problem is a border control problem.