What’s Going On With Northern Michigan’s Opioid Settlement Money?

Thanks to a series of lawsuit settlements, communities throughout the U.S. are getting millions of dollars to deal with the effects of the opioid overdose epidemic. The money has the potential to drive major leaps forward for opioid education, drug prevention initiatives, addiction treatment, expanded distribution of lifesaving medications, and more. But nearly a year after those first funds were distributed to local governments – and almost two years after the first settlement rulings came down – northern Michigan has yet to see much actual spending.

According to David McGreaham, a retired Traverse City physician who chairs the Grand Traverse County Opioid Settlement Task Force, local leaders face a dilemma in deciding how to spend settlement funds. On the one hand, McGreaham tells The Ticker “there are some worthy projects out there that could be funded quickly” – and says the task force is “just getting to the point where we would recommend releasing some of this money” so it can start making a difference. But McGreaham says there’s also some debate among task force members about whether Grand Traverse County should let its settlement funds accumulate a bit more before making any sizable allocations.

When all is said and done, the county and the city will have received millions of dollars from across more than a half-a-dozen opioid settlements. The catch? The money isn’t being paid out as a lump sum, but over the course of several years. McGreaham notes that one of the settlements – a $21 billion agreement with leading pharmaceutical distributors McKesson, Cardinal Health, and AmerisourceBergen – will bring “about $2.7 million” to the county alone, to be paid out over 18 years. Other settlements have their own timelines, and some of the lawsuits are still being settled, which means that a final, total dollar amount is still up in the air.

Based on current settlements, Grand Traverse County will receive an estimated $5.65 million in opioid lawsuit money, while the City of Traverse City will get $416,500. Those numbers will likely increase as additional lawsuits are settled.

Between the staggered settlement payouts and the uncertainty about how big a windfall is actually coming, McGreatham says that “budgeting is going to be challenging” for the task force and other entities trying to decide where and how to spend the money. So far, he estimates the county has “about $650,000 in the bank” from opioid settlements. The task force can start allocating that money whenever it chooses, and has significant leeway in deciding where to spend it. But waiting longer could unlock the potential for the county to fund bigger and possibly more impactful endeavors – such as, perhaps, a full-fledged drug treatment facility.

Beyond waiting for more settlement payments to hit the county’s accounts, McGreaham says the task force is interested to see what happens this spring when the county and the city both receive their first-ever payouts from recreational cannabis taxes. “Wouldn’t it be great if some of that money was allocated to this pool of funding also?” he muses.

There’s also a possibility that the county could combine some or all of its opioid money with other municipalities to achieve bigger aims collaboratively. “The city has money; the Grand Traverse Band of Ottawa and Chippewa Indians has money; neighboring counties have money,” McGreaham says. “Wouldn’t be great if we could all pool our resources to fund some bigger projects?”

McGreaham continues: “Really, I think our challenge is answering: How do you release some of this money now while you also continue to study how best to use it in other areas?”

It’s a life-or-death question – literally. The settlements are intended to start repairing the damage caused by the opioid epidemic, a crisis that killed nearly 13,800 Michiganders between 2018 and 2022. That death toll continues to climb: State data shows there were 2,998 overdose deaths in 2022 and 1,367 in the first half of 2023, the most current data available for last year. Grand Traverse County alone reported 264 “suspected overdoses” in 2022, and 23 of them were fatal – more than any other surrounding county.

McGreaham is adamant that the task force needs to start spending at least some of the settlement money ASAP. When asked when he expects the county will approve its first allocations, he responds optimistically: “My hope is within the next 60 days.”

The next task force meeting is scheduled for this February 28. “I don't think we're going to release any dollars for spending then, but by the next meeting after that, I think we will be the point where we can come up with some detailed recommendations,” McGreaham suggests.

And where could those recommendations lead? McGreaham says emerging priorities include “support for the drug court, more training for behavioral health folks, support for recovery coaches, housing support, support for transportation, and support for prevention efforts.” The task force has also been paying close attention to the Traverse City Police Department’s Quick Response Team (QRT), which provides “wrap-around services for people experiencing crises related to substance use, mental health, and homelessness.” McGreaham says the task force is interested in “the possibility of expanding the QRT county-wide.”

When asked where things stand for the City of Traverse City, Liz Vogel – who stepped into the city manager role in January – says she’s still getting up to speed on the matter of opioid settlement funds and hopes to attend a meeting of the county task force soon. City Finance Director Heidi Scheppe, meanwhile, confirms that the city received three opioid settlement payments in 2023, totaling just over $52,000. “I am not sure on the expenditure side yet if these funds have been earmarked for specific services,” she says. “We will be working through that in the budget process.”