Washington D.C. Faces Budget Battle Over Opioid Settlement Funds as Advocates Cry Foul

Washington D.C. is embroiled in a heated dispute over how to spend its share of opioid settlement funds, with recovery advocates and city officials clashing over a proposed budget that would redirect millions in settlement dollars to cover existing Medicaid costs rather than expand addiction services.

The controversy centers on the district's fiscal year 2027 budget, which proposes using approximately $2.3 million in opioid settlement funds to help pay for the city's Medicaid contribution — a shift that would free up general budget dollars but leave overall spending on addiction treatment flat.

The Settlement Money Debate

The opioid settlement funds come from landmark agreements with pharmaceutical companies and distributors accused of fueling the overdose crisis. Washington D.C. is expected to receive more than $100 million over nearly two decades — money intended to remediate the addiction crisis through increased services and new programs.

However, the district's proposed budget would use settlement dollars to cover existing obligations rather than expand services. An additional $5.5 million would support addiction treatment centers previously funded through the general budget, effectively substituting settlement funds for existing commitments.

"These funds were awarded to D.C. for very specific reasons and with a specific mandate, which are to remediate issues related to the opioid crisis in new and innovative ways," said Queen Adesuyi, a partner at Reframe Health and Justice and a vocal advocate for people who use drugs.

Legal Questions and Advocacy Response

The dispute has raised legal questions about whether the proposed spending violates the district's own opioid litigation law. The Opioid Litigation Proceeds Amendment Act of 2022 explicitly states that settlement funds "shall supplement, and not supplant" existing spending.

"Opioid settlement dollars are not meant to be a rainy-day fund for existing government obligations," said Shelly Weizman, associate director of the Center on Addiction and Public Policy at Georgetown Law's O'Neill Institute. "It's a pretty tightly written law where the intent is very clear: Do not supplant."

More than 80 individuals and 30 city organizations signed a letter protesting the use of settlement dollars, saying the district's Department of Behavioral Health planned to spend opioid cash to "pay off its own debts." The letter was sent to DBH Director Barbara Bazron, Council Health Committee Chair Christina Henderson, and Attorney General Brian Schwalb.

Chad Jackson, who chairs the district's Opioid Abatement Advisory Commission and is himself in recovery, called the move "supplantation" — a budgeting tactic that shifts money from one fund to another to free up dollars elsewhere.

"If the opioid settlement funds were not there, I feel pretty confident that these things would have been funded, because they have to be funded," Jackson said. "What's happening now is against the district's opioid litigation law."

Official Response and Next Steps

Councilmember Henderson and Attorney General Schwalb weighed in with a July 17 letter to the Department of Behavioral Health, expressing concern that "DBH may be using the settlement monies for other unauthorized purposes." They asked the department to explain by July 31 how it determined the proposed spending was legal.

DBH spokesperson Denise Reed said in a statement that the department is "committed to compliance with all statutory requirements governing opioid settlement funds." The department noted that the council "passed a legally-certified budget for the next fiscal year that makes the best use of all local resources, including the opioid settlement fund, to award grants to 17 community-based providers who last year served nearly 9,800 residents including 3,500 in medication-assisted treatment for opioid addiction."

The district's budget is now pending a 30-day congressional review, the final step in its annual budgeting process. Advocates say they will continue pushing for accountability in how the opioid money is spent.

The Broader Context

The D.C. dispute reflects a national tension over how to spend the more than $50 billion that state and local governments are receiving from opioid settlements. While the funds are meant to address the addiction crisis, many states are facing fiscal pressures from inflation, federal funding cuts, and rising costs — creating temptation to use settlement dollars as budget stopgaps.

Advocates warn that using settlement funds to replace existing spending undermines the purpose of the agreements and fails to address the ongoing overdose crisis. According to the D.C. Chief Medical Examiner, the district averaged 38 fatal overdose deaths per month in 2022, with numbers remaining high through 2024.

"The drug supply is getting a lot more unpredictable, which calls for some nimbleness, and it calls for interventions that are more courageous," Adesuyi said. "Unfortunately, DBH is not meeting the mark when it comes to that. It's frustrating, it's disappointing, and it's enraging because people are dying unnecessarily in the district to overdose."

What This Means for Families

For families in Washington D.C. seeking addiction treatment or recovery support, the budget dispute highlights the importance of understanding how public funds are being used — and advocating for transparency in spending decisions that directly affect access to care.

The district's Opioid Abatement Advisory Commission holds public meetings quarterly, and community members can participate to voice their concerns about how settlement funds should be allocated. The commission is tasked with ensuring that settlement dollars are spent on evidence-based prevention, treatment, harm reduction, and recovery services.

Families seeking help for substance use disorders can contact the SAMHSA National Helpline at 1-800-662-HELP (4357) for free, confidential, 24/7 treatment referral and information. The D.C. Department of Behavioral Health also provides resources through its Live.Long.DC. initiative.

As the budget moves through congressional review, advocates say they will continue monitoring the situation and pushing for settlement funds to be used as intended — to expand services and save lives, not to fill budget holes.