Budget diversion of opioid settlement funds outrages advocates

Budget diversion of opioid settlement funds outrages advocates / July 1, 2025 / NJ Spotlight

By Bobby Brier

Protests erupted during a Senate voting session and advocates staged a “die in” at the State House over a move by lawmakers to send a portion of New Jersey’s opioid settlement funds to four of the state’s largest hospitals without specifying how the money would be used.

Under the opens in a new windowbudget language approved by lawmakers Monday, $45 million from the state’s Opioid Recovery and Remediation Fund would be distributed to Hackensack University Medical Center, RWJBarnabas Health, Cooper University Hospital and Atlantic Health System. RWJBarnabas and Cooper would receive $15 million each, while Hackensack would receive $10 million and Atlantic Health $5 million.

“I take no position on whether the hospitals should receive funds, but these settlement funds are not general revenues for the State,” Attorney General Matthew Platkin said in a opens in a new windowstatement.

“They are the result of some of the most significant lawsuits ever filed by Attorneys General across this country to force companies to pay back the blood money that they stole in fueling the opioid epidemic. Spending this money in this way is a slap in the face to every family who lost a loved one in this devastating crisis, which continues to claim the lives of thousands of New Jerseyans each year,” Platkin said.

Democrats who control the Legislature passed a state budget Monday that spends $58.8 billion — a record amount for state government. It raises taxes by $1 billion on a range of products to support that spending, which includes major increases in tax relief programs for property owners and renters in this legislative election year. And lawmakers added several hundred million dollars in pet projects in the late stages of budget negotiations.

Murphy signed the budget and its package of $1 billion in tax increases into law late Monday.

How to spend opioid settlement funds

The language in the budget comes after the state’s Opioid Recovery and Remediation Advisory Council — a nine-member panel that includes treatment and recovery experts, social service leaders and people who have experienced addiction — released a opens in a new window108-page strategic plan last month with opens in a new windowrecommendations on how New Jersey should spend opioid settlement funds.

The council was formed in 2023 to advise the state on how to invest its share of New Jersey’s payout from opens in a new windownational opioid lawsuit settlements, a total of $1.3 billion over 15 years to be paid by drugmakers, marketers and distributors who opens in a new windowflooded the nation with highly addictive medications. opens in a new windowHalf of that $1.3 billion is going to the state government while the other half is being distributed by the counties and about 250 municipalities under the settlements’ terms.

Public health experts, including Jenna Mellor of the New Jersey Harm Reduction Coalition, said in an interview with NJ Spotlight News that the budget language is a “gut punch” to everyone who has buried loved ones due to drug overdoses.

“We’re doing this in their honor and their legacy because they are powerful, important people and we were just told none of that matters,” said Mellor, the executive director of the coalition. “That we will take away the money that is promised to you, we will take away the money that will fund harm reduction expansion that’s saving lives [and] that will fund overdose response.”

Vitale: An ‘awful idea’

The language was inserted into the budget on Friday night without public notice or explanation, the coalition said in a statement. The diversion of the funding to the hospitals violates settlement agreements requiring funds to supplement, not supplant, existing expenditures and to be used for new “evidence-based interventions,” according to the coalition.

Bre Azañedo of BLM Paterson Harm Reduction Center said in a statement that people will die because of this decision.

“The services we provide work because we don’t charge for them or ask for insurance like a hospital does,” said Azañedo. “We give out free Narcan, reverse overdoses, and provide counseling and support no questions asked. Now, these frontline organizations may have to cut staff and services while hospital executives and their lobbyists get rich.”

Sen. Joseph Vitale (D-Middlesex), chair of the Senate Health, Human Services and Senior Citizens Committee, told NJ Spotlight News that he did not know who put the language in the budget, but that it was an “awful idea.”

“Hospitals do some work in this space and I’m grateful that they do, but this particular resource was dedicated to a pre-existing blueprint to provide services statewide through a variety of different provider organizations [and] advocacy groups in the most effective low-cost manner,” said Vitale.

Senate President Nicholas Scutari (D-Union) and Assembly Speaker Craig Coughlin (D-Middlesex) did not immediately respond to requests for comment regarding why this money was diverted and why this happened just before the budget deadline.

The case for the hospitals

Cathy Bennett of the New Jersey Hospital Association said in a statement to NJ Spotlight News that New Jersey hospitals are “on the frontlines” of the opioid crisis and are national leaders in “evidence-based” treatment, prevention and recovery while offering medications for opioid-use disorder, mobile clinics and Narcan distribution, among other resources.

“As essential partners in a coordinated public health response, substance use disorder experts in New Jersey hospitals are working with community-based organizations to provide lifesaving assistance on a daily basis to tens of thousands of patients struggling with opioid addiction,” said Bennett, the president and CEO of the association. The New Jersey Hospital Association is a nonprofit trade organization that delivers support and services to the state’s hospitals, health systems and other health care providers.

Advocates, including Elizabeth Burke Beaty of Sea Change Recovery Community Organization and Harm Reduction Center, said they are “terribly upset” over the $45 million diversion and called it an “ambush.”

“This is, in my eyes, just a ploy to buffer their pockets because they’re afraid of the Medicaid cuts,” said Beaty, the president of Sea Change. “[I] just think they found a way in and took a money grab wherever they can get it.”

While the budget passed both the Senate and the Assembly, Gov. Phil Murphy could still veto the resolution that calls for the $45 million in opioid settlement funds to be diverted to the four hospitals.

— John Reitmeyer and Lilo H. Stainton contributed reporting.