(INDIANA CAPITAL CHRONICLE) — Most local governments haven’t started spending their opioid settlement dollars, according to a state report released Thursday.

Four cities did not meet the deadlines for reporting expenses, leaving 644 localities in the analysis. Of these, 80% did not spend any of their restricted funds, while 82% did not put into their unrestricted accounts.

“As these record amounts of funding continue to flow into Indiana, the role of local people is vital,” said Shelby Thomas, deputy director for drug prevention, treatment and enforcement under Gov. Eric Holcomb.

“With this in mind, we have developed guidance for communities to consider when they wish to send their restricted funds,” continued Thomas. “Also included in this document is a list of tangible items that are not included as allowable expenses, as well as resources for those communities.”

The Family and Social Services Administration, the agency charged with tracking these expenditures, presented the findings to the Indiana Commission on Substance Use Disorders.

Over 18 years, the state as a whole is on track to receive more than $980 million as part of a national settlement with opiate distributors, manufacturers and dealers — with funds designated to combat substance use disorders and opioids .

Total funds will be split 50-50 between state and local government units. Generally, 30% of the money – or 15% for each level of government – ​​will go to “unrestricted” funds; the state and local people can spend it as they see fit.

The state, on the other hand, moves faster.

As of October 1, the FSSA reported that it had committed to spending more than $40 million in “restricted” funds. Such expenses are directed towards programs such as building recovery residences, street mobilization or hiring peer support specialists.

“An overwhelming majority of the funds, nearly $35.5 million … went toward treatment and recovery,” Thomas said.

In August, the State Budget Committee approved the next round of spending for $46 million.

What are these funds for?

Earlier this year, the Centers for Disease Control and Prevention had some good news: overdose deaths across the country down 3% — the first decline since 2018.

In Indiana, the decline was even greater, down 18%. Still, more than 2,000 Hoosiers died of drug overdoses in 2023, and thousands more struggle with addiction.

Funds from the National Opioid Settlement began flowing to Indiana communities in December 2022. Unlike the 1998 Tobacco Master Settlement, the funds will go to localities to target areas with high opioid overdose deaths and proliferation.

But the smallest cities received small amounts, too little to buy even a box of Narcan, prompting the state to pivot.

Last summer, the state made a change to its funding formula for communities that receive lump sums. Before July 1, anything less than $1,000 would instead go to county coffers. Amounts less than $5,000 after June 30, 2023 would also go to the counties.

Smaller units of government may choose to pool their funds with the county anyway, Thomas said.

“We’ve actually had a number of communities that, even though they’re getting a little over $5,000, it’s still not a lot of money,” Thomas said.

Both Thomas and Douglas Huntsinger, executive director of the state Office of Drug Prevention, Treatment and Enforcement, said the size of the community or the amount of the settlement doesn’t matter when it comes to spending. They said the best indication that communities will spend their settlement money is whether they choose to create a government body to oversee spending.

Only 103 localities, or 16 percent, reported the creation of a local committee, according to the report.

“That cooperation is what drives communities,” Huntsinger said.

Next Level Recovery’s online databases include a handful of communities with fewer than 2,000 residents that begin spending funds.

Thomas added that some localities may choose to let their funds accumulate in several payments before choosing to spend their dollars.

“It’s not a bad thing, necessarily,” Thomas said. “However, we know there are a lot of communities that still don’t know where to start, so we want to give them that guidance.”

A draft advisory for local units of government, shared with the Indiana Capital Chronicle, begins by directing localities to create an advisory committee, followed by an assessment of local needs. Data for such assessments can be found in state agency dashboards such as Take recovery to the next levelTHE Indiana Department of Health or the Indiana Management Performance hub.

She has Next Level Recovery a list of acceptable uses for restricted funds, but Johns Hopkins University has its own guiding principles for communities to consider. Both emphasize reliance on evidence-based practices. The state notes that smaller amounts can be used to focus on school programming or bring treatment providers into the community.

The largest single expenditure for the state has been its matching grant program, with more than $18.8 million spent so far. Another $4.2 million went toward building recovery residences, followed by $1.5 million for street teams.

Expanding the number of certified peer support professionals will cost the state another $4.8 million, but the contract will take two years to complete.

Millions will go to other state agencies, such as the Office of Judicial Administration and the Indiana Department of Corrections, over several years. Smaller entities, such as Hope Academy Recovery School, which educates youth with addiction disorders, have their own line items.