This article is part of MACo’s Policy Deep Dive series, where expert policy analysts explore and explain the top county policy issues of the day. A new article is added each week – read all of MACo’s Policy Deep Dives.
As big companies are forced to pay up, Maryland counties are working closely with the state to unweave a dynamic distribution formula for opioid settlement funds. Despite the effort on both the state and county side, it is an entirely new process that is bound to experience some growing pains. With a number of accounts designated to receive deposits, different pools of money have designated strings attached. In an attempt to de-mystify the process, the policy deep dive this week will highlight where that money goes. This article will explore everything from who controls the funds and how much has made its way to the local governments so far to what roadblocks still exist.
BACKGROUND
The first round of opioid settlement funds arrived in Maryland this past November and it was covered on the Conduit Street Blog. While additional funds are anticipated from the remaining companies, counties are still waiting for guaranteed disbursements out of the initial deposit from November. The confirmed county-by-county totals from two of the five funding avenues can be found here. These local allocations will continue to roll out over the next 18 years, with varying regulations as to how those funds can be accessed and used.
STATE AND LOCAL PARTNERSHIP
Despite a change in leadership, the Moore-Miller administration has picked up where the process left off from the previous administration, making sure opioid settlement funds make their way to the locals in a targeted and organized manner. Last week the Opioid Operational Command Center (OOCC) held a webinar for 80+ county officials looking for more information on how to access opioid settlement funds. Both the national and state settlement agreements outline how this money is required to be allocated and used, which is generally for opioid remediation efforts in affected communities.
FUNNELS FOR FUNDS
When the money first arrives in the state, there are three initial funnels:
- Opioid Restitution Fund (ORF) – 15%
- Targeted Abatement Subfund (TAS) – 60%
- Local Allocation – 25%
The 25 percent, local allocation is a direct payment to local governments based on the formula established in the subdivision agreement. The payment comes to local governments from the settlement administrator, which is the law firm BrownGreer PLC. As an example, during the first round of distributions, $13.5M of $60M went direct to local governments as calculated by the formula.
The remaining 75 percent goes directly to the state and lands in one of two accounts, which are the ORF and the TAS. While the State receives a substantial chunk of the money, a portion of that is earmarked and guaranteed to also go to local governments through the (TAS). But the State must release those funds themselves to the locals. For instance, in this first round, a total of $24M was confirmed for local governments from the TAS on top of the $13.5M direct from the settlement administrator. As an example, Baltimore County will receive a total of $7.8M from the initial round – $2.8M as a direct payment from the settlement administrator and an additional $5M from the TAS. The 15% that lands in the ORF is for permitted use by the State.
LOCALS CAN GET EVEN MORE
During the county leadership call with the OOCC last week, an additional avenue for counties to receive settlement funds was outlined in great detail. This opportunity is available through grants offered by the OOCC via a segment of the TAS called the State Discretionary Abatement Fund. County Health and Human Service Divisions and Correctional Departments are likely recipients of these awards to the extent they apply.
KINKS TO WORK OUT
No new process is without a learning curve and this one is no exception. Counties are waiting for a number of clarifications from the Office of the Attorney General (OAG) regarding the process for different types of counties to receive the guaranteed funds. As an example, Anne Arundel has received the $1.5M from the settlement administrator but has not received the remaining $2.8M from the State as required from the first round of funds.
The agreement between the state and counties specifies that the TAS funds, earmarked for qualifying charter counties, should be distributed within 30 days of the deposit being made to the TAS or 30 days from when they established their local abatement fund. Anne Arundel’s fund was established almost a year ago, but since the money arrived to the State in November, they have not seen the TAS amount deposited.
This deadline has been missed for deposits to a number of qualifying charter counties with local abatement funds already in place. Additionally, there is remaining confusion about what documentation or proposals are required by participating counties. A local abatement plan outline was discussed as a requirement on the call with the OOCC but this requirement is somewhat contradictory to the settlement agreement language specified above. The OAG is currently getting to the bottom of this and will advise shortly so stay tuned here for more updates.
CONCLUSION
Counties are eager and ready to put this money to work for residents. The permitted uses are expansive, encompassing everything from education in schools for promoting youth resiliency to local jails needing to offer medication-assisted treatment for inmates. It was even confirmed on the OOCC call that capital projects would be eligible if the use is consistent with opioid remediation efforts. Counties will continue to work with the State to find ways to open up these funding channels, which is imperative as settlement money will roll in for at least the next 18 years. Getting the process streamlined now will ensure communities that need these services are able to access them without delay.
More opioid settlement coverage from the Conduit Street Blog.
