Legislators eye opioid settlement for budget holes
To plug budget holes next year, Oklahoma legislators plan to use nearly half the money in a special fund devoted to holding funds from settlements with opioid manufacturers.
The budget proposal legislators unveiled this week would appropriate $ 28.9 million in the upcoming fiscal year from the state's Opioid Settlement Fund, which includes funds from the state's settlements with Endo Pharmaceuticals and Teva Pharmaceuticals USA and affiliated drug companies.
It's the first time funds from the Opioid Lawsuit Settlement Fund will be used, and money would be divided up among seven state agencies to use for opioid abatement.
Currently, the fund holds just over $68 million, according to the Office of Management and Enterprise Services. Not included is the state's $ 270 million
settlement with Purdue Pharma.
The opioid settlement funds are a small part of nearly $ 900 million in revenue legislators are using to fill the large part of an estimated $1.3 billion hole in next year's budget. The $ 7.7 billion budget still takes a roughly 3% hit over the current year's budget.
The budget proposal, which was sent to Gov. Kevin Stitt on Thursday, also taps into the state's Rainy Day Fund, sweeps some agency revolving funds and temporarily diverts funding for some transportation projects and reduces direct contributions to the state's retirement accounts.
House Appropriations Vice Chairman Kyle Hilbert, R-Bristow, said when the budget was in the planning stages, legislative staff reached out to specific state agencies to ask how much they typically spend trying to deal with the effects of the opioid epidemic.
Those agencies will receive similar funds next year, but with the money coming out of the Opioid Lawsuit Settlement Fund rather than from general appropriations.
“We were careful to use those funds for opioid-related expenditures,” Hilbert said.
But House Minority Leader Emily Virgin, D- Norman, said members of the House Democratic caucus didn't feel confident they got enough clarity from House budget writers to be sure the funds will be used only for opioid abatement.
“It is a symptom of the larger problem that we are using a lot of onetime money to fill the budget hole, and this is one instance of that because this is a limited pot of money and it absolutely should be going towards opioid abatement,” she said.
The general appropriations bill, which makes up the bulk of the state budget, passed the House on a party- line vote. Democrats opposed the bill.
To settle their portion of a lawsuit in which they and other drug companies were accused of contributing to the opioid crisis in Oklahoma, Teva and its affiliates settled with the state for $85 million. Endo settled for $ 8.75 million.
The settlements are not an admission of wrongdoing.
Both agreements called for the bulk of the money to be deposited into a newly created account within the state treasury.
The funds can only be used to respond to the state's opioid crisis, according to the settlement agreements.
When the details of the agreement were being worked out last year, Stitt, Senate Pro Tem Greg Treat and House Speaker Charles McCall intervened to say the funds should be in the Legislature's control, due to a change in state law. A month prior, legislators passed legislation to require any funds from lawsuits or settlements involving the state of Oklahoma go into the state treasury.
Oklahoma State University Center for Health Sciences also received money from the opioid lawsuit settlements — almost $ 200 million from the Purdue Pharma settlement was dedicated to research.
“When you look at it, the money we actually have — the Teva money, the Purdue money, this is being used to fix shortterm ( opioid) problems and the Purdue money is being used to fix longterm problems, so I think we are doing both,” Hilbert said.
Stitt can either sign or veto the budget. He also can choose to line- item veto specific parts of the budget. The Legislature can override a veto with a two-thirds majority in both chambers.