A rural counties choice: Use opioid funds to pay off debts or pay them off to curb the crisis

In the past two years, rural Greene County in northeast Tennessee has raised more than $2.7 million from regional and national deals with opioid manufacturers and distributors. But instead of helping those harmed by addiction, county officials are finding other ways to spend it.

They invested $2.4 million to pay off the county’s debt and earmarked another million dollars that came over more than a decade into a fund for capital projects. In March, they appropriated $50,000 from that fund to purchase a “trash crew vehicle,” a pickup truck to drive inmates to pick up trash along county roads.

“It’s amazing,” said Nancy Schneck, a retired nurse who has seen addiction infiltrate the community, where employers avoid drug testing for fear of losing too many employees and mental health crises and homelessness are rampant. She wants to see the money go to mental health and addiction treatment. Why can’t county leaders “see that healing some people and maybe getting them out of this cycle could be beneficial?” she said.

In 2021, the latest year for which comparable data is available, the drug overdose death rate in Greene County surpassed state and national figures.

But Mayor Kevin Morrison said the county had been shouldering the costs of the opioid epidemic for years: Funded a beleaguered sheriff’s office, improved the jail – which is filled with people who have committed addiction-related crimes – and argued a drug court to divert some people to treatment. He has also suffered the indirect costs of the crisis: people leaving the workforce due to addiction, schools and social services caring for more traumatized children, and some taxpayers leaving the county altogether. Addiction isn’t the only reason for Greene County’s economic woes, but it has contributed to more than $30 million in debt.

“We’ve been dealing with this crisis for some time, but nobody wants to foot the bill when it comes,” Morrison said. “So when these funds are released, we’re paying bills that have been due for some time.”

The debate in this Appalachian county is reverberating nationwide as state and local governments receive billions of dollars from companies that have manufactured, distributed or sold opioid painkillers, such as Johnson & Johnson, Cardinal Health and CVS. The companies have been accused of fueling the overdose epidemic, and the money is set to undo that damage. About $3 billion has already landed in state, county and city coffers, and about $50 billion more is expected over the next decade and beyond.

States are required to spend at least 85% of money on opioid-related programs, but KFF Health News’ ongoing investigation into how the money is used — and misused — shows there is a large interpretation of that standard and little oversight.

That restriction did not apply to money that Greene County transferred to its capital projects fund.

In many rural communities, which have struggled to pay addiction costs for decades, local officials justify using severance funds to repay past expenses. Most of Tennessee’s 95 counties have significant debt, which can present difficult choices about how to use this money, said Robert Pack, co-director of the Addiction Science Center at East Tennessee State University.

However, he and many supporters hope that the liquidation funds will be spent on addressing the current crisis. After all, more than 200 people nationwide die of drug overdoses every day. Investing in treatment and prevention can save lives and protect future generations, they say.

“There’s no good excuse to sit on funds or put them into a general fund,” said Tricia Christensen, policy director for the nonprofit Community Education Group. The organization is tracking spending on settlements across Appalachia, which Christensen called ground zero for the outbreak. “These dollars should be used to support the people who have been hardest hit by the overdose crisis.”

Nationwide, there has been little oversight of the settlement dollars. President Joe Biden’s administration pledged to ensure funds went to address the addiction crisis, but took little action. Liability at the state level varies.

In Tennessee, 15% of state opioid clearance funds are controlled by the legislature and another 15% by local governments. Those two buckets have few restrictions.

The other 70% are controlled by an Opioid Reduction Board, which has stricter standards. When the council, which must give 35 percent of its funds to local governments, recently distributed more than $31 million to counties, it requested that the funds be spent on a list of approved projects, such as housing for the recovery and the rise of addiction treatment for the uninsured.

“I can guarantee we’re going to bird-dog” those funds, said Stephen Loyd, board chairman and recovering opioid addiction physician. If counties use them for unapproved purposes, counties won’t receive future payments, he said.

Greene County’s repayment of its capital projects fund comes from its fund — 15 percent of which is controlled entirely by local governments.

In such cases, the public can hold officials accountable, Loyd said. “If you don’t like the way money is being spent, you have the option to vote.”

Local leaders are generally not “nefarious” with these decisions, he said. They make hundreds of budget choices a month and simply don’t have the experience with addiction or health care policy to guide them in their use of the money.

Loyd and other local experts are trying to fill this gap. She meets with county officials and recommends they speak to their local anti-drug coalitions or hold listening sessions to hear from community members. Pack, of East Tennessee State, is urging them to increase access to drugs that have been shown to be effective in treating opioid addiction.

Both men point counties to an online recovery ecosystem index, where leaders can see how their area’s resources for recovery compare to those of others.

In Greene County, for example, the index indicates that there are no recovery homes and the number of treatment facilities and mental health providers per 100,000 residents is lower than the state and national averages.

“This is a great place to start,” Loyd said.

Some Greene County residents want opioid liquidation funds to go to local initiatives that are already operating in the field. The Greene County Anti-Drug Coalition, for example, hosts presentations to educate young people and their parents about the risks of drug use. They meet with convenience store owners to reinforce the importance of not selling alcohol, cigarettes or vaping devices to minors. In the future, the coalition hopes to offer lessons in life skills, such as how to budget and make decisions under pressure.

“If we can do prevention work with children, we can change the trajectory of their adult lives,” said Wendy Peay, anti-drug coalition secretary and executive director of United Way of Greene County.

The coalition has asked the county for settlement money but has not yet received any.

Nearby, in Carter County, a new residential treatment facility is taking shape on the site of a former prison. At least seven counties, cities and towns in the region have pledged a total of $10 million in opioid liquidation funds to support it, said Stacy Street, a criminal court judge who came up with the idea. Greene County is among the few local governments that have not contributed.

It will be part of the region’s drug recovery justice system, in which people with addiction who have committed crimes are referred to intensive treatment instead of prison.

There are currently no long-term residential facilities in the area for such patients, Street said. Too often, people in her court receive care during the day but go home in the evening “to the same sandbox, playing with the same sandmates,” increasing their risk of relapse.

Street said the new facility will not offer drugs for treating opioid addiction — the gold standard of medical care — due to safety concerns. But some patients may be driven to receive them off-campus.

Morrison, the mayor of Greene County, said he is concerned about contributing to the facility because it is a recurring cost and the settlement funds will stop flowing in 2038.

“There has been a lot of pressure on local governments like Greene County to try to fix this problem with this limited amount of funding,” he said, when “the federal government, which has the ability to print money to solve these problems, it’s not in this matter.”

The county is still deciding how to spend nearly $334,000 of severance funds it recently received from the state Opioid Reduction Board. Morrison said they are considering using it for the education efforts of the Drug Coalition and the County Drug Court. Given abatement board guidelines, these funds cannot be used to pay off old debts.