(The Center Square) – Louisiana’s parishes are flush with opioid-settlement cash, but a lot of questions remain about how those funds are being used and how they should be used.
One answer is apparently to invest the funds using Louisiana’s state-affiliated asset management pool.
“This investment pool was created as a voluntary option for parishes to use. They can put the settlement funds in the fund, to earn more interest and disperse more for the parishes,” Theo Sanders, the asset pools executive officer, told The Center Square.
While no funds have yet to be invested, Louisiana’s Opioid Abatement Task Force is will allow parishes to invest their funds if they wish.
The pool manages assets exclusively from public entities like school boards and commissions, using taxpayer dollars. The current rate of return for the pool as a whole is 4.37%, according to Sanders.
The pool is over $5 billion dollars in the black, according to a June report from the state auditor. The fund, which holds the highest possible credit ratings, offers an online portal with unlimited accounts and manages about $6.5 billion for 931 participants, including numerous school boards and universities.
It is essentially a cooperative investment fund for local governments. Created in 1993, it lets parishes, municipalities, school boards and other public bodies pool their extra cash and invest it together – giving them access to safer investments than they might on their own.
The fund’s main goals are to protect the principal, allow participants to withdraw their money any day without penalty, and earn a competitive return. To do that, LAMP sticks to high-quality, short-term investments like U.S. government securities and top-rated money market funds. LAMP holds the highest possible credit rating from Standard & Poor’s.
As of July, the state has received $173 million in settlement funding from various pharmaceutical companies, with the state expected to secure even more. The agreement set up by the state requires that 20% of all funds go to sheriff’s departments and the rest are allocated to parishes and municipalities.
Local governments are still uncertain about specific strategies for managing the opioid crisis beyond just securing money from pharmaceutical companies.
Monique Boulet, Lafayette mayor president, questioned whether there has been any real analysis of the opioid crisis and the impact of settlement funds.
“Has it been corrected? I don’t think it has,” Boulet said, adding that she wants to understand what’s happening “on the ground from an opioid perspective,” and that there’s still “no quantitative understanding” of the situation.
“We’re still uninformed,” Boulet continued, adding that while there are attempts to address the problem, she doesn’t know “the scope of the problem” or whether the settlements are truly being used to fix the crisis.
“My goal is that we actually have a real impact,” Boulet told The Center Square in an interview, adding that how to achieve that real impact was still uncertain. “That’s what I’m trying to figure out.”
“There’s different ways to look at this,” Boulet said. “When you arrest somebody with a drug problem, jail is not really the best place. It’s not equipped to handle it, and the person isn’t going to get what they need to stabilize. We had such a severe reaction as a country to this opioid crisis that all these companies ended up settling and putting money up. The challenge now is how to actually fix it – how to use that money in the most productive way. And I don’t know that it’s enough to cure the whole problem by any means, because it’s so multifaceted.”
Task force members offered some comfort, saying that half of the money has been used directly for treatment. The rest remains unspent or has gone toward administrative costs and strategizing.
