Louisville Plan to Use Opioid Settlement Funds for Existing Expenses Sparks Outcry

When pharmaceutical companies agreed to pay billions to settle lawsuits over their role in fueling America's opioid epidemic, the understanding was clear: this money would help communities heal. But in Louisville, Kentucky, that promise is colliding with municipal budget realities in ways that have advocates accusing city officials of betraying the very people the funds were meant to help.

Mayor Craig Greenberg has proposed using $8 million in opioid settlement funds to cover existing city expenses—including the 911 call center, jail operations, and a homelessness work program—expenses that have historically been paid through tax revenue. The plan has drawn sharp criticism from addiction advocates who argue it violates the fundamental purpose of the settlement money.

"That money is supposed to be saving lives," said Jennifer Twyman, an organizer with VOCAL Kentucky, a nonprofit that works with people facing addiction and homelessness. "Using it for the 911 call center and for things that have already been funded for years, it shouldn't be going to that. It's as opposite from compassionate as a city could be to take money, blood money, and use it as his pocket money."

The Budget Breakdown

Greenberg's proposal allocates the $8 million across several city agencies:

• $2 million for 911 call center expenses
• $3 million for the city's 911 deflection program, which provides non-police response to mental health crises
• $1.5 million for medical addiction treatment at the Louisville jail
• $1.2 million for Goodwill's Another Way, a work program for people experiencing homelessness
• $200,000 for Department of Public Health and Wellness personnel to administer opioid settlement funding

The city was already funding all of these programs through its general budget, with the exception of the public health administrative positions. This practice—using settlement funds to cover existing expenses rather than expanding services—is known as "budget supplantation."

A National Pattern with Local Consequences

Thirteen states have banned or restricted budget supplantation when dealing with opioid settlement funds, according to research from Johns Hopkins University. Kentucky is not among them, leaving local jurisdictions free to redirect the money as they see fit.

The Johns Hopkins Bloomberg School of Public Health, whose guidance the Greenberg administration previously cited when investing in primary prevention programs, explicitly encourages cities to "supplement rather than supplant existing funding." Their guidance warns that "given the economic downturn, many states and localities will be tempted to use opioid settlement dollars to fill holes in their budgets rather than expand needed opioid programs."

The Kentucky Association of Counties has similarly discouraged the practice in its best practices published last year, advising county leaders to "focus on supplementing resources to maximize the impact of settlement funds."

The Advocate's Perspective

Attica Scott, a former state legislator now heading special projects for the Forward Justice Action Network, led a rally outside City Hall earlier this month where advocates chanted, "Nothing about us without us." The demonstration brought together representatives from VOCAL Kentucky, the Kentucky Harm Reduction Coalition, and other groups working directly with people affected by addiction.

"That money exists because of our suffering," Scott told the crowd. "It belongs to our healing, and yet right now there are forces in this city and in the state, quite frankly, that want to take those funds and pour them into more policing, more jail beds, more punishment."

Many advocates had pushed for the settlement funds to help prevent the closure of the Arthur Street Hotel, a low-barrier shelter for people experiencing homelessness that shut its doors later in June. The hotel served as a critical resource for individuals with substance use disorders who often struggle to access traditional shelter systems.

The Administration's Defense

Matt Mudd, a spokesperson for Greenberg, defended the proposal in a statement, saying the settlement money helps communities address the impacts of the opioid crisis, including "increased overdoses, substance use disorders, demands on emergency services, public safety challenges, and strain on local resources."

"These funds are intended to support proven strategies that prevent harm, expand access to treatment and recovery services, and improve community well-being," Mudd said. Asked specifically about using the funds for existing expenses, he responded that the plan complies with state law and the settlement agreement.

At a June 2 press conference, Greenberg characterized the lack of transparency in budget documents as an "oversight" and argued that the city invests in programs serving people with addiction through other parts of the budget. He pointed to city funding for affordable housing and homelessness as addressing the impacts of the opioid epidemic, noting that "many individuals that have struggled with addiction find themselves having issues with housing, as well."

The Council's Dilemma

Louisville Metro Council members are now weighing the proposal as they finalize the city budget, with a vote expected by the end of June. The debate highlights the tension between immediate fiscal pressures and long-term public health investments.

Markus Winkler, a District 17 Democrat and vice-chair of the council's Budget Committee, acknowledged the complexity of the issue. "There's a question of do you need to expand programming with this or do you already have things in the works that are effective, so funding them with it is appropriate," he said.

When asked if he was concerned about the mayor's proposal, Winkler offered a nuanced response: "Yes and no. Is it the best use of funds? Would you ideally add new services? Maybe. But, if I sort of flip the argument on its head, the other questions would be, 'What happens when these opioid funds run out?' Now you've got to cut these programs."

The Long View

According to city officials, Louisville expects to receive roughly $57 million by 2040 from the settlements with opioid manufacturers. The current proposal represents a significant portion of the early disbursements, raising questions about how future funds will be allocated.

Advocates argue that the settlement money represents a once-in-a-generation opportunity to build sustainable infrastructure for addressing addiction—funding treatment programs, harm reduction services, and prevention initiatives that could reduce the burden on emergency services and the criminal justice system over time.

"These dollars were won because families buried their loved ones and communities fought for accountability," Twyman said. "We shouldn't have to fight again just to make sure the money actually reaches the people it was meant to help."

The outcome in Louisville will be watched closely by other jurisdictions grappling with similar decisions. As billions in opioid settlement funds flow to communities across the country, the question of whether that money will expand the safety net or simply maintain existing services will shape the nation's response to the ongoing addiction crisis for decades to come.