'Left with nothing': Funding shortfall cancels Minnesota's opioid response grants

Colleen Ronnei, who launched a school-based addiction awareness program after her son Luke fatally overdosed at age 20, cleared her schedule when she heard applications for Minnesota's new opioid epidemic response fund were available.

The Chanhassen mom, who founded a nonprofit called Change the Outcome, spent three days and $2,500 to complete a 36-page proposal by the late May deadline. But shortly after submitting the request for $120,000, she got a response that gutted her: The round of grant-making was canceled because of "insufficient funds."

"I was sick," Ronnei said through tears. "It was like, are you kidding me? Three days after the dang thing was due. ... I can't begin to express the disappointment."

Change the Outcome was one of more than two dozen programs that sought but failed to receive funding through Minnesota's landmark Opioid Epidemic Response Law, which in its early going has suffered a revenue shortfall and seen legislators influence the spending of funds raised by fees on drug manufacturers.

Passed in 2019, the program was expected to raise $20 million to fight the opioid crisis through those fees. A 19-member citizen advisory council was established to make recommendations on distributing millions in revenue to addiction treatment and prevention programs.

But the fees have so far fallen $7 million short of projections. That, along with decisions by state legislators, left the council's coffers too depleted to fulfill the council's goal of funding more services.

Twenty-seven applicants, including treatment centers and programs focused on American Indian women, Asian communities and the homeless, were left empty-handed.

Now, just one year after the law took effect, frustrations over communication and accusations of legislative meddling are fueling calls to change the process to ensure the law's original aims are met.

"We didn't get any say," said Dr. Anne Pylkas, an addiction medicine specialist who chairs the advisory council. "It leaves the little dogs with nothing."

The opioid response law, which passed with bipartisan support after years of negotiations, increased annual registration costs for companies that make and distribute prescription painkillers to up to $250,000. Those fees should have totaled $20 million this year.

But as of late June, the state Board of Pharmacy collected just $12 million, as some companies failed to pay. Several stopped doing business in the state rather than pay the fees, while others asked for extensions because of COVID-19's economic strain, Executive Director Cody Wiberg said.

Under the "best case" scenario, he said, the fund will hit $15 million by mid-July. While advocates and lawmakers expected some companies to bow out, the size of the hole came as a surprise.

"When the revenue projections came in I think everyone got a gut punch," said Rep. Erin Koegel, a Spring Lake Park Democrat who serves on the advisory council.

As part of the 2019 deal to pass the law, legislators earmarked portions of the revenue for various causes, including overdose prevention and traditional healing programs. Half the available money would go to counties and tribes to pay for child placement and protection services strained by the epidemic.

Decisions on the remaining funds, projected to be in the millions, were supposed to be left to the advisory council. Over the winter, the panel got to work. In late April, a request for grant proposals was released by the Department of Human Services (DHS).

Launching the process took longer than expected. Some legislators and advocates raised concerns about the timeline for getting funding out the door. With the council's approval, lawmakers crafted legislation to distribute $2.7 million of the remaining cash to groups that had received state funding in the past, including medication-assisted treatment programs and groups distributing overdose rescue drugs. The measure passed in the final days of the regular session with broad bipartisan support.

"We wanted to get back out there and replenish the supplies, the narcan supplies and the core nonprofits that were currently out providing those services," said Sen. Mark Koran, R-North Branch.

But because of the funding shortfall, there wasn't enough money left for the nonprofits that had applied directly to the council. On June 2, just days after the grant deadline, the request for proposals was officially withdrawn.

In a statement, DHS said the council "will continue to do its important work supporting sustainable treatment and recovery services across the state," including reviving the grant process next year.

But the Legislature's involvement frustrated some activists and grant-seekers, who felt lawmakers' actions undermined the intent of the new opioid law.

"I drove down to St. Paul to testify for three years," said Shelly Elkington, an advocate whose daughter died of an overdose in 2015. "The premise of the bill [was] that the most affected people in the state would be able to have a say on where the most needs are."

Pylkas, the council chair, shared those frustrations. Legislators, she said, set the council up for failure by demanding members deliver recommendations in March, months before the deadline for companies to pay the fees, then "stole [the funding] and gave it to the same old people." The way the spending bill was written left them with little wiggle room to use the fund, she said.

"We spent the majority of our time from September to May talking about how do we make sure the little guys get this money [and ensure] that it goes to the places that really need it," she said. "We had really great ideas about how to do that. And that was the point."

Koran said he, too, hoped the grant-making process would support "new and creative ways to provide" treatment and other services. But he said the size and pace of the council forced legislators' hands. The proposal process was projected to take months.

"Every single group there is doing what they should do, they should fight and represent," he said. "But [with] the number of experts there, the philosophies get debated more than the content of trying to provide solutions."

Koran, who serves on the council, wants to consider streamlining membership to improve the process. Others want to see changes to protect the council's autonomy. Koegel, who co-sponsored the spending bill, has committed to advocates that the Legislature won't step in again next year.

"This year we're going to have to stick to the tried and true," she said. "Hopefully next year we can get some innovative programs to help people get treatment."

Ronnei is facing a possible funding shortfall of her own, as she builds toward her goal of reaching more students statewide. She isn't sure what's next for her effort. But she, too, wants to see changes in the initiative's second year.

"The law needs to be rewritten," she said. "So we don't get the scraps [of what] everyone else takes."

Torey Van Oot • 651-925-5049