New York State has earned approximately $35 million in accrued interest on the more than $3 billion in opioid settlement funds it has secured to date. Some advocates are concerned that how and where interest dollars are used could be harder to follow with provisions in Governor Kathy Hochul’s latest executive budget.
Interest income is accrued on unspent dollars sitting in the state’s Settlement Fund managed by New York’s Office of Addiction Services and Supports (OASAS), the state agency charged with administering the Fund.
“There’s a lot of money there. There has to be to earn that kind of interest,” said Rob Kent, President of Kent Strategic Advisors and Former General Counsel of OASAS.
Kent argues that appropriations in Hochul’s FY 2027 state executive budget separate interest dollars from the Settlement Fund and leave a loophole for the funds to be used to replace current spending.
“That takes the $35 million and segregates it from the rest of the settlement funds,” said Kent.
In Hochul’s executive budget appropriations, it details that the $35 million in accrued interest be “held in reserve to be allocated pursuant to a plan submitted by [OASAS] and approved by the director of the budget for uses consistent with the statewide opioid settlement agreements.”
But OASAS said in an email to Radio Catskill that any accrued interest is subject to the same state laws as the original settlement funding.
“Regarding the interest, this funding is in the OASAS budget and will be utilized in the same manner as the rest of the OSF dollars. State law does not allow for this funding to be used to supplant other funding, we have not used the funding for this purpose, and there are no plans to do so in the future,” said Evan Frost, a spokesperson for OASAS.
New York’s Opioid Settlement Fund Advisory Board has also scrutinized the Fund’s accrued interest.
“To date, the State has not released a formal plan for the use of these dollars,” the Fund’s Advisory Board outlined in its latest annual report.
The Fund’s Advisory Board can only recommend how opioid settlement funds should be used to OASAS and has previously raised concerns about OASAS’s lack of data transparency and slow response times.
The Opioid Settlement Fund Advisory Board recommended that accumulated interest be directed to smaller organizations and communities where the data shows the greatest need for technical assistance. The Advisory Board also approved motions in 2025 for more interest transparency and that interest funds are dispersed in FY 2027 and not swept into the general fund.
Some lawmakers have introduced legislation to amend the state law.
Introduced by Assemblymember Phil Steck, AB A10234 proposes to include any interest earned on state opioid settlement agreements in the opioid settlement fund per state finance law. The bill was referred to the Alcoholism And Drug Abuse Committee on Feb. 12.
New York enacted legislation in 2021 to establish a dedicated opioid settlement fund with settlement dollars from opioid manufacturers for their role in fueling the opioid crisis. More than $454 million has been made available to date, according to OASAS’s opioid settlement fund tracker, but many advocates say those dollars are being distributed too slowly and with little transparency.
READ: Advocates Say Opioid Settlement Funds in New York Are Still Too Slow to Arrive – and Hard to Track
Kent said concerns about OASAS’s ambiguity point to broader concerns among advocates that the state isn’t distributing the funds fast enough.
“The families – and I talk to a number of them regularly – are furious. Their view is this money came to the state of New York because their loved ones died or were impacted negatively because of how these defendants, the manufacturers and distributors of opioids, how they acted and the things they did,” said Kent.
Kent hopes that more “faith and credence” be given to the Advisory Board’s recommendations and more dollars go towards prevention and treatment services. Under OASAS’s existing reporting tracker, he says he can’t tell if that’s the case.
“Are [counties] buying police vehicles or whatever they might be doing? I don’t know, I can’t tell you. Or are they funding treatment prevention, harm reduction, recovery services, which really hopefully should be the focus.”
Image: Sa Thao signs the 2022 Mobile Recovery National Bus, a nationwide bus tour drawing attention to determine how billions in opioid settlement money should be used, during a stop in Sacramento, Calif. Sept. 7, 2022. (AP Photo/Rich Pedroncelli, File)