Kentucky Local Governments Have Spent Only 10% of Opioid Settlement Dollars Despite Continued Need

A new analysis from the Kentucky Center for Economic Policy reveals a troubling gap between available resources and urgent community needs: local governments across the state have spent only about 10% of the opioid settlement funds intended to combat the addiction crisis, leaving more than $109 million sitting unspent while overdose deaths continue to devastate families.

The Scale of Unspent Resources

Between 2022 and 2038, Kentucky will receive more than $1 billion from national opioid settlements with pharmaceutical companies found complicit in sparking the epidemic. Half of these funds go directly to the state's 120 counties and 149 city governments to invest in treatment, recovery, harm reduction, and prevention programs.

According to the report released in late June 2026, local governments had received $122.4 million from settlements through the end of fiscal year 2025. Yet counties had spent just 8.5% of their allocated funds, while cities had spent only 16.8%. At the end of FY 2025, $109.8 million remained available—$86.5 million for counties and $23.3 million for cities.

"These funds are often referred to as 'blood money'—restitution for lives lost," the report notes. "It is essential that local governments invest these dollars wisely to save more lives in their communities."

Half of Local Governments Spent Nothing

The spending gap is particularly stark at the local level. In FY 2025—the first year detailed reporting was required—51% of Kentucky's local governments reported zero opioid settlement expenditures. Among counties, 42% spent nothing; among cities, 59% made no expenditures at all.

When asked to explain the lack of spending, roughly a third of localities provided no explanation. More than a quarter said they were still in the planning process. Several counties reported confusion about what expenditures are allowable, while some cities explicitly stated they were "saving the funds to spend at a later date."

Overdose Deaths Declining, But Crisis Persists

The report comes as Kentucky reports its fourth consecutive year of declining overdose deaths. According to the Kentucky Office of Drug Control Policy, 1,110 residents died from drug overdoses in 2025—a 22.9% decrease from 2024 and the lowest number since before the pandemic.

The statewide overdose death rate now stands at 24.3 deaths per 100,000 residents. Fentanyl and methamphetamine remain the drugs most frequently identified in overdose deaths, though both showed significant decreases from the previous year.

However, public health advocates caution that 1,110 lives lost is still too many—and recent federal funding cuts to health and human services programs have heightened the importance of deploying settlement funds effectively.

Good Spending vs. Problematic Spending

The Kentucky Center for Economic Policy analyzed $12.2 million in county expenditures from FY 2025 and categorized them based on alignment with evidence-based practices outlined in the 2026 National Roadmap for Spending Opioid Settlement Funds.

Examples of effective investments include:

Jefferson County allocated $130,796 to Feed Louisville/C.A.R.E. (Creating Action, Resources, and Empowerment), which provides harm reduction supplies, overdose prevention education, naloxone distribution, wound care, and connections to treatment for people experiencing homelessness.
Floyd County directed $100,000 to its school district's Family Resource and Youth Services Center to assist children and families affected by opioid use with basic needs including food, clothing, bedding, and utility assistance.
Eastern Kentucky counties including Letcher, Lee, Owsley, and Whitley are funding community resource "hubs" that combine harm reduction services, treatment navigation, peer support, and assistance with housing, transportation, and employment barriers.

Problematic expenditures identified in the report include funding for ineffective prevention programs, unproven treatment methodologies, and law enforcement-focused responses that don't address the public health dimensions of the crisis. The analysis found $1.7 million in problematic spending among the expenditures reviewed.

What Communities Can Do

The report emphasizes that local governments have significant flexibility in how they use settlement funds, with allowable uses falling into four main categories:

Prevention — Education, training, and support for families, schools, and communities
Harm reduction — Naloxone distribution, syringe service programs, and overdose prevention
Treatment — Detoxification, counseling, inpatient and outpatient care, and medications for opioid use disorder
Recovery support — Supportive housing, peer support, reentry services, and employment assistance

The Kentucky Opioid Abatement Advisory Commission, which oversees the state's $900 million share of settlement funds, has adopted Johns Hopkins Principles for the Use of Funds, which discourage using settlement dollars to replace existing funding sources.

What's Next for Kentucky

With overdose deaths declining but still claiming more than three lives per day across the state, advocates are urging local governments to move from planning to action.

"Moving forward, Kentucky's local governments must be proactive in investing their opioid settlement funds rather than holding them," the report concludes, "and must ensure the monies are spent on programs and strategies that will save lives."

The Kentucky Center for Economic Policy has developed a model ordinance to help counties establish advisory councils that can guide effective spending, and interactive maps are available showing how much each locality has received and spent.

For families seeking addiction treatment resources in Kentucky, the SAMHSA National Helpline at 1-800-662-HELP (4357) provides free, confidential, 24/7 treatment referral and information services.

If you or someone you love is struggling with substance use, help is available. Visit our treatment resources page to learn about options for recovery support.