Senate subcommittee rejects DHCS plan to move $8.4 billion in opioid settlement money to statewide naloxone purchase

The Senate Budget Subcommittee on Health and Human Services voted to reject a Department of Health Care Services (DHCS) request to allocate $8.4 billion from the state's opioid settlement fund to a statewide Naloxone Distribution Project.

Subcommittee members said data and public testimony showed many community harm‑reduction programs were responsible for the majority of reported naloxone reversals, and they questioned moving money away from those programs. The motion to reject the DHCS expenditure authority passed 2‑0; Senators Weber Pearson and Grove Benjovar recorded “aye.” The administration said it continues to support the governor’s original budget proposal.

The subcommittee discussion focused on how DHCS’s Naloxone Distribution Project differs from the Department of Public Health’s (CDPH) California Overdose Prevention and Harm Reduction Initiative (COFRE), sometimes called the harm‑reduction program. According to Department of Finance testimony, DHCS’s project would primarily purchase naloxone at reduced cost for distribution to eligible health entities and community organizations. CDPH’s harm‑reduction program funds on‑the‑ground staffing and services at syringe‑service and harm‑reduction sites, which the Department of Finance said accounted for about 57 percent of reported naloxone reversals in California through February of this year.

Beth Castillo of the Department of Finance told the subcommittee that “the administration has decided to reevaluate its expenditure plan of the opioid settlement fund” and that the Naloxone Distribution Project was identified as an administration priority. Chair Weber Pearson and other members pressed DHCS and Finance on whether moving funds would reduce the staffing that supports naloxone distribution in communities.

Public commenters representing harm‑reduction programs, county health departments and advocacy groups urged the committee to preserve COFRE funding. Speakers said local harm‑reduction providers distribute naloxone directly, provide training, link people to care and report substantial overdose reversals. Several local program leaders described measurable local declines in overdose deaths after investing settlement funds in harm‑reduction outreach and distribution.

The subcommittee’s formal roll call followed staff’s recommendation to reject the DHCS proposal. The committee record shows the administration does not support the committee’s action and continues to back the governor’s budget plan.

The committee moved on to other agenda items after the vote; Department of Finance and DHCS staff said they would provide follow‑up information the subcommittee requested about the current balance and annual receipts of the opioid settlement fund.