Could LI's millions in opioid settlement money go up in smoke?

Flashback, 1998.

An agreement by Big Tobacco to settle lawsuits on smoking-related illnesses nets Nassau and Suffolk hundreds of millions of dollars in revenue that will be paid out over decades.

Although the money came with no formal conditions attached, Newsday reported at the time, Suffolk made quick work of putting it toward helping residents stop smoking, or not to start in the first place.

The county did so well that, between 2000 and 2001, the American Lung Association of New York State pushed it from Grade A to Grade A+ — for spending $5.7 million of its 2001 funds on prevention and cessation programs.

Nassau?

The lung association, over the same period, pushed the county's grade down, from D to F — for spending zero of its $21 million in 2001 funds on anything having to do with curbing smoking-related illness.

Instead, Nassau used — and would continue to use — the money to paper over holes in its budget.

As a Newsday editorial noted at the time, the county became so desperate that it hired a broker to sell its settlement shares for pennies on the dollar so the county could get money immediately, rather than have to wait for it to come in installments.

The process is called securitization. An ad by the J.G. Wentworth company, which buys structured settlement payments, providing the owners with a lump-sum, uses opera to explain the process earworm-ishly well:

"If you get long term payments, but you need cash now …"

Nassau began to sell its shares when the nation's economy was booming.

Suffolk, beginning during the Great Recession of 2008, ended up securitizing shares of its tobacco settlement money over time to fill budget holes, too.

Richard Nicolello, presiding officer and one of two of the longest serving members of the Nassau County Legislature, knows full well what happened, as shares were sold during the administrations of both Republican and Democratic county executives.

(In later years, some of the funding did go to Nassau University Medical Center.)

"Every county executive has a lusting for money that will fill budget holes," Nicolello (R-New Hyde Park) told Newsday.

Democrat Robert Calarco, the Suffolk legislature's presiding officer, recalls Suffolk's decision to get "cash now." Calarco was a legislative aide at the time.

Jeffrey Reynolds, head of the Family and Children’s Association in Garden City, remembers, too. Back then, he was Executive Director of the Long Island Council on Alcoholism and Drug Dependence, known as LICADD.

All of which brings us to the present.

And to the millions of dollars that Nassau and Suffolk will be getting as a result of opioid settlements with multiple companies.

In Nassau, the funds will be placed in a lock box, Nicolello said.

"There is need, and that money will go to that need," for anti-opioid efforts, he said.

In Suffolk, Calarco sits on a committee that will determine priorities spending the county's opioid settlement money.

One thing that will make it easier, he noted, is that some of the opioid manufacturers have attached conditions to their payments.

"You can put it toward dealing with our opioid crisis, but you can't put it toward anything else," Calarco told Newsday. "That really helps because that wasn't the case with tobacco."

Steve Bellone, Suffolk's county executive, has two and half years remaining in his term.

"What I want to do is put in a foundation that will carry over to administrations that will come after," Bellone, a Democrat, told Newsday.

Reynolds said he was determined that the opioid money go toward dealing with the impact of opioid abuse and its aftermath on Long Island.

"There is need, and with the pandemic that need has been growing," he told Newsday. "We will need to deal with the impact on families who have lost people, and on communities."

Reynolds' hope is that the opioid money will reach deep into communities, including those affected by the crack epidemic, when a key tactic was to imprison addicts rather than help them.

"This could spread out to dealing with other drugs, other communities," Reynolds said.

Nicolello, Calarco and Reynolds agree on another factor as well.

"There are families, families who have lost children or parents or friends — they are not going to let this go to plug budget holes," Reynolds said.

Still, Reynolds says he's worried.

"Right now, counties are flush with money because of federal pandemic aid," he said.

There could be temptation, down the line, to make other use, where possible, of settlement money, Reynolds said.

"I hope," he said, "that we don't do what we did with tobacco."

By Joye Brown

joye.brown@newsday.com

Joye Brown has been a columnist for Newsday since 2006. She joined the newspaper in 1983 and has worked as a reporter, an editor, newsroom administrator and editorial writer.