State, cities, counties reach historic agreement on allocating opioid settlement funds
AG Ellison, Gov. Walz, and partners announce historic agreement to allocate settlement dollars from opioid companies: 75 percent to counties and cities, 25 percent to State
Partners also agree to lobby for state law changes to get money directly to local units of government
December 6, 2021 (SAINT PAUL) — Along with a variety of partners including Governor Tim Walz, Minnesota Attorney General Keith Ellison announced today that in the latest step in responding to the opioid crisis that has claimed the lives of 5,500 Minnesotans and devastated countless families and communities across Minnesota, the State and local units of government have reached an agreement that will allocate 75 percent of funds received from the recent opioid settlements directly to cities and counties and 25 percent to the State of Minnesota, for spending on opioid treatment, abatement, and prevention. The parties also agree to work together to support changes to state law so that these resources flow directly and efficiently to those local units of government.
On July 21, 2021, Attorney General Ellison announced that Minnesota joined a broad multistate coalition in reaching nationwide settlements with opioid manufacturer Johnson & Johnson and the three largest opioid distributors — AmerisourceBergen, Cardinal Health, and McKesson. The settlements resolve multiple investigations and lawsuits from all parts of the United States against these companies for their role in the opioid crisis. If the settlements are fully adopted nationally, the distributors have committed to pay $21 billion over 18 years and Johnson & Johnson will pay $5 billion over 10 years. Most states have already joined the settlements, but in order for the agreements to become effective and to maximize dollars that states will receive, a critical mass of cities and counties must sign onto the settlements by January 2, 2022.
To win the agreement from counties and cities necessary to maximize the dollars that Minnesota will receive under the Johnson & Johnson and distributors’ settlement, in September 2021 Attorney General Ellison convened an advisory panel on the distribution and allocation of opioid settlement funds, composed of local, state, and community stakeholders with experience and expertise in public health and delivery of services to individuals and families impacted by the opioid epidemic. Their charge was to use their knowledge and expertise to propose the best way to use these historic resources to combat the scourge of the opioid epidemic in Minnesota. The panel included ex officio members from the Attorney General’s Office, state agencies, the Legislature, the Association of Minnesota Counties, the League of Minnesota Cities, the Coalition of Greater Minnesota Cities, and the Minnesota Indian Affairs Council.
The agreement announced today between the state, its cities, and counties is the product of the weeks of work of the advisory panel of experts and of subsequent negotiations between state and local officials. It details how opioid settlement funds, including the approximately $296 million in funds to be paid to Minnesota and its cities and counties from the Johnson & Johnson/distributors settlement, will be allocated:
- Local Government Abatement Fund. Seventy-five percent (75%) of the abatement funds will be paid directly to counties and certain municipalities that participate in the settlement. Local government funds will be directly allocated to all participating counties, and all participating municipalities that: (a) have populations of 30,000 or more, or (b) have filed lawsuits against the settling defendants, or (c) have public health departments.
- State Fund. Twenty-five percent (25) of the abatement funds will be paid directly to the State. Pursuant to state law, these funds will go into the special opioid abatement account to be overseen and distributed by the Opioid Epidemic Response Advisory Council (OERAC). The state-subdivision agreement anticipates a change to this law to allow counties to receive their share of the settlement funds directly, rather than through OERAC. The agreement requires the state and subdivisions to work together to achieve this change in law during the 2022 legislative session, and includes a provision changing the allocation between state and local governments if the statutory change is not accomplished.
In order for the agreement to be effective and for Minnesota to maximize the dollars available to it in the Johnson & Johnson/distributors agreement, all eligible counties and cities must individually consent to the agreement by January 2, 2022.
A copy of the state-subdivision agreement, along with an executive summary and frequently asked questions, will be posted shortly on the opioids settlement page of Attorney General Ellison’s website.
State leaders and parties to the agreement reacted to today’s announcement.
Attorney General Keith Ellison:
"No amount of money can ever make up for the death and destruction that opioid manufacturers and distributors caused in their pure pursuit of profit. No amount of money can bring back the 5,500 lives we’ve lost in Minnesota or fully restore the families and communities devastated in every part of our state. Now, we’ve brought together cities and counties from across Minnesota in a historic agreement to extract the maximum amount of money possible from these companies and get it to where the pain is, so we can address the suffering of families and communities in every part of our state as quickly as possible. To reach maximum settlement dollars, Minnesota’s counties and cities must now review and approve the agreement before the end of the year.
“This is what it looks like when Minnesotans work together: we work through our differences and put the common good first. I want to thank the associations of cities and counties and everyone who came to the table in good faith to reach this historic agreement. I especially want to thank Representative Dave Baker, whose policy judgment and personal pain and loss have guided the wisdom of everything we’ve done together. He as much as anyone is responsible for this historic development.”
Governor Tim Walz:
“This is an important milestone that will help bring relief to countless families in the form of treatment and prevention to combat the opioid epidemic. I’m grateful for the work of Attorney General Ellison, as well as counties, cities, service providers, and the Opioid Epidemic Response Advisory Council to find ways to get aid to communities that have been most impacted.
State Representative Dave Baker, interim chair of Opioid Epidemic Response Advisory Council:
“It’s important to maximize the dollars coming to Minnesota from companies that profited by literally looking the other way. Now with this exhaustive agreement between counties, cities, and the state, we have a path forward for deploying dollars that will help families and communities who were devastated by this crisis and help save lives in the future.
“Full transparency is also critical. We must understand how these companies misled the medical industry so that this can never happen again.”
Association of Minnesota Counties President and Lake County Commissioner Rich Sve:
"Counties are thankful that Minnesota’s plan for the opioid settlement dollars recognizes the important partnership of state and local government. This is a historic opportunity to invest in public health, human services, and public safety initiatives that address the opioid epidemic and work towards preventing the impact of addiction in the future. Counties look forward to working with the Attorney General’s Office, the Governor’s Office, the Legislature, and stakeholders to ensure the dollars have a meaningful impact for communities, individuals, families, and children.”
Coalition of Greater Minnesota Cities President and Luverne Mayor Pat Baustian:
"The opioids epidemic has had a devastating impact on families and communities throughout Greater Minnesota. Although no amount of money can make up for the loss of life, the funding from these national settlement agreements will help our communities provide services and resources to address this crisis. We appreciate the efforts and cooperation of the Attorney General’s Office, League of Minnesota Cities, Association of Minnesota Counties, and other stakeholders to reach a global agreement on how these funds should be distributed."
League of Minnesota Cites Executive Director David Unmacht
“Cities of every region and size have been impacted by this crisis, and this plan gives all access to greater resources, partnerships and solutions.” We appreciate the opportunity to work closely with our county and state partners in creating a plan that is best for the entire state.”