Leading harm reduction organizations and direct service providers across New Jersey are condemning the state Legislature’s budget proposal that would divert $45 million in opioid settlement funds to four hospitals with no strings attached or information on how the funds will be spent.

In just one year, this diversion would give away 10 percent of the state’s share of remaining settlement funds through 2038. If the raid is continued in future years, it would deplete all remaining settlement funds for the state with no money left for anything else, including the funds that the state’s opioid advisory council already directed to harm reduction, housing, legal service, and wrap-around support programs.

Even with the recently announced Purdue settlement, the state expects to receive roughly $540 million over the next 12 years, averaging $45 million per year.

“This is a blatant, shameful misuse of opioid settlement funds. We're talking about literal blood money from the drug companies that profited from the overdose crisis, and they’re stealing it. This settlement was never meant to be a slush fund or go to big hospital systems with no strings attached,” said Jenna Mellor, Executive Director of the New Jersey Harm Reduction Coalition and member of the New Jersey Opioid Recovery and Remediation Fund Advisory Council. “If this money is taken, the state will not be able to pay for the life saving harm reduction services it’s already committed to.”

The opioid settlement funds, paid by pharmaceutical companies specifically to address the ongoing overdose crisis they created, will instead go to RWJBarnabas Health ($15 million), Cooper University Hospital ($15 million), Hackensack University Medical Center ($10 million), and Atlantic Health System ($5 million).

"We've been very vocal about our concerns over the impact of Medicaid cuts, but funding enormous health systems is not going to solve the overdose crisis," said Tonia Ahern, Community Coordinator for the National Center for Advocacy and Recovery. “We hear horror stories all the time about people being mistreated and discriminated against at the hospital with no accountability. And what happens to people once they leave with no support, or access to medications and individualized care? It’s going to fall on harm reduction and recovery organizations to pick up the pieces, and now with less funding."

Earlier this month, the New Jersey Opioid Recovery and Remediation Fund Advisory Council released a five-year strategic plan detailing how the state should spend opioid settlement funds. While funding for hospital systems was not included in the plan, the $45 million diversion would be the single-biggest expenditure from the settlement fund in Fiscal Year 2026, surpassing the $36 million proposed for all other initiatives combined.

“This goes against everything we fought for, both where the money’s going and the process that got us here. There was no conversation with people on the ground doing the work or even the people on the advisory council,” said Bre Azañedo, program manager at the BLM Paterson Harm Reduction Center and member of the New Jersey Opioid Recovery and Remediation Fund Advisory Council. “We have outreach teams out here saving lives on a shoestring budget. We should be funding the people and organizations on the frontlines. The hospitals don’t need the money.”

The advisory council’s strategic plan was the culmination of a 15-month planning process that included input from direct service providers, public health experts, people living with a substance use disorder, people in recovery, and family members who lost loved ones to an overdose. Meanwhile, the $45 million diversion was quietly introduced and approved by lawmakers on Friday night with no community input or budget language available to the public.

“If you want to know why fewer people are dying from overdoses, it’s because of the community-led harm reduction work that’s happening here in Newark and all across the state. Our team is reversing overdoses almost everyday, keeping our neighbors alive and connecting them to the care they need,” said Rey Chavis, Executive Director of the Newark Community Street Team, which operates a Community Overdose Response Team and harm reduction center. “With the Trump administration already cutting funding for nonprofits like ours, the state needs to ask itself who needs this money more, the small organizations punching above their weight and saving lives, or hospital systems with million-dollar executives and massive budgets.”

The diversion may violate the opioid settlement agreements’ requirement that funds be used to establish new evidence-based practices rather than cover costs that institutions would otherwise bear themselves. There is nothing in the budget resolution advanced by lawmakers specifying how the hospitals will use the diverted funds.

“This doesn’t pass the smell test,” said Nikki Tierney, J.D. and Licensed Clinical Alcohol and Drug Counselor. “The settlement agreements are crystal clear that these funds must supplement, not supplant, existing expenditures and be used for new evidence-based interventions. We haven’t seen anything that outlines what the hospitals plan on doing with these funds or if they meet even the most basic terms of the settlement. This not only goes against the letter and spirit of the law, but it has to be the least efficient use of these funds.”

The diversion sets a dangerous precedent that treats opioid settlement money as a general slush fund rather than a dedicated resource for addressing the ongoing public health emergency. If this diversion continues in future years, as is common in the state budget, it would drain the entire settlement fund and result in cuts to the types of evidenced-based overdose prevention efforts behind New Jersey’s recent decline in overdose deaths.

"These dollars came with a promise from our elected officials and now they’re trying to break it,” said Elizabeth Burke Beaty, President of Sea Change Recovery Community and Harm Reduction Center, which released the New Jersey Roadmap for Opioid Settlement Funds earlier this month. “If you talk to people who are suffering and those in recovery and actually listen, they’ll tell you exactly what they need: housing, transportation, wraparound peer support, family support, harm reduction, ongoing medication-assisted treatment, and employment. What they don’t need is for our opioid settlement funds to go to hospitals without any plan, oversight or input from the people closest to the overdose crisis.”

The organizations are calling on legislative leadership and Governor Murphy to reverse the $45 million diversion before the final budget is signed into law. They also called for the settlement funds to have lockbox protections to prevent similar diversions in the future.

"It’s not an exaggeration to say this is a matter of life and death," said Mellor. “This money was supposed to fund services proven to save lives, and now lawmakers have to decide if they’re going to take that away.”

Advocates and direct service providers will be in Trenton on Monday for the final vote on the budget bill.

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About the Organizations:

New Jersey Harm Reduction Coalition (NJHRC) works to create a New Jersey that values the safety and dignity of all people who use drugs through evidence-informed harm reduction services, technical assistance, and policy advocacy. NJHRC operates a statewide mail-based harm reduction program and a drop-in harm reduction center in Middlesex County.

Newark Community Street Team (NCST) provides community-led overdose response and harm reduction services in New Jersey's largest city. NCST coordinates with partners, including city agencies, service providers, policy organizations, and more in order to improve the quality of life of citizens in the City of Newark.

BLM Paterson is a Black youth led, member-based organization dedicated to transforming the city of Paterson to ensure safety and justice for all Black people. BLM Paterson operates a harm reduction center and mobile unit that provides resources, care, and support to people who use drugs in the City of Paterson.

National Center for Advocacy and Recovery (NCAAR) promotes recovery and wellness through advocacy, education, and progressive policy initiatives that identify substance use as a public health concern, reduce stigma and its related harms, and fosters macro and micro-level systems change.

Sea Change Recovery Community and Harm Reduction Center is a non-profit organization based in Ocean County with a mission to crush the stigma of Substance Use Disorder, save lives and help people thrive.