Philadelphia criticized for how it's spending millions from opioid lawsuits

Ever since moving in five years ago, Tiffany has been unable to open her house's windows. The sills were rotting from water damage, and opening them posed a hazard.

"The front windows have to be screwed shut, because they'll literally fall in on you," she said in August. But she couldn't afford to replace them. "It would be really nice... to just open the windows and have a breeze, instead of having 10 fans going."

Tiffany got her wish in September: contractors came and installed six new windows — free. The repairs were part of a city project funded by opioid settlement dollars.

Local governments are starting to receive those funds from drug manufacturers and distributors following a 2021 lawsuit over the pharmaceutical industry's role in fueling the opioid crisis.

NPR is identifying Tiffany by her first name only because she's worried about becoming a target of theft.

She lives in Kensington, one of Philadelphia's poorest neighborhoods, and the hardest hit by the city's opioid crisis.

The billion dollar open-air drug market in Kensington has been dubbed the largest on the East Coast.

Philadelphia received $20 million in settlement funds in 2023. Over a third of that pot, $7.5 million, was set aside specifically for Kensington, and divided into five "buckets" — for parks, schools, home repairs, rent relief, and support for small businesses.

Upgrades and investments in these areas will improve the lives of Kensington families and children, according to community leaders and residents.

It is a step towards repair, after years of coping with the fallout from drug use, overdoses and crime, they say.

But not everybody agrees with how the city is using that money.

On June 20, the Pennsylvania Opioid Misuse and Addiction Abatement Trust – an independent body that oversees how local governments use opioid settlement dollars – voted that all of the Kensington spending did not comply with federal guidelines.

"This board is very cognizant of the problems besetting, particularly, the Kensington area," said trust chair Thomas Van Kirk in June.

"However, we believe that the programs that were outlined in the use of opioid money is inappropriate, it does not comply with exhibit E."

Exhibit E was created as part of the lawsuit's settlement. It's a list of approved — but not required — spending categories. It includes purchases of opioid reversal medications such as Naloxone, and of medications that treat opioid addiction, such as buprenorphine.

Other approved uses include recovery services, clean syringe exchanges, and addiction treatment focused on pregnant women and those in jail or prison.

The dispute reveals differing philosophies over how to use the money.

As of 2019, the ongoing opioid epidemic has killed more than 500,000 people since 1999, according to the Centers for Disease Control and Prevention.

Some want a stricter interpretation of the national guidelines.

But others argue that addressing the root causes of addiction, such as local poverty and neglect, will help prevent future cycles of drug use and help affected neighborhoods rebuild.

In its initial decision, the Pennsylvania trust voted that much of the community investment spending in Kensington was non-compliant, but did approve outlays for its Overdose Response Unit , a city department focused on the epidemic, and nonprofits that address housing and treatment services for people with substance use disorder.

Philadelphia officials decided to appeal the decision, and on Oct. 3 the trust issued a partial reversal: it ruled funding for Kensington schools, parks, and rent and mortgage relief was compliant with federal guidelines.

But the board maintained that $3.4 million in funding for home repairs like Tiffany's, as well as support for small businesses, was non-compliant.

On Nov. 4, the city filed a challenge with the Commonwealth Court of Pennsylvania, arguing the trust's ruling used "an impermissibly narrow reading of Exhibit E."

If the trust's ruling stands, it could mean that next year the trust could reduce or withhold additional settlement funds from Philadelphia.

Addressing the indirect impacts of addiction

Tiffany's was just one of 400 Kensington homes that will be repaired with settlement funds.

In addition, 250 families will receive mortgage or rental support, distributed by the nonprofit New Kensington Development Corporation , according to Executive Director Bill McKinney.

McKinney disagreed with the trust's decision on housing. The settlement money should go to people living with addiction and those living it, he and other advocates say.

"That can't be how this story ends. This is one of those opportunities to actually stabilize some of these spaces," McKinney said.

Darlene Burton has lived in Kensington for 28 years. She's slated to get her leaky roof repaired.

Residents of Kensington need the "uplift" of these financial investments from the city, Burton said, after years of "coming outside every day and seeing people slumped over" after injecting drugs.

"We're truly traumatized by what we see on a daily basis. Help us. Invest in us."

The six schools in Kensington have seen massive drops in enrollment, especially when compared to district-wide data.

Leaders at these schools will use their designated funds on things like new playgrounds, a drumline, student uniforms, crossing guards, a freezer for food donations to families, and new career counselors and a climate specialist.

'A Band-Aid to an open chest wound'

For these school leaders, this funding is a drop in the bucket, especially within a historically underfunded school district.

Willard Elementary will install its first playground and purchase new fencing made with a material that will make it more difficult for bullets to pass through.

Willard is number three on a list of schools with the most nearby shootings in the U.S., according to the Trace. Four other Kensington schools are in the top ten.

Gloria Casarez Elementary School is expanding its playground and building a sensory wellness room — a space designed to calm kids who are exposed to trauma and chronic stress, and students with sensory processing issues from ADHD and autism.

While walking to and from school, many of the Casarez students encounter human feces and used needles on the sidewalks, said principal Awilda Balbuena.

She expressed concern that her students might be stepping "over people that they think are dead in the street" due to overdoses.

This spending is about their students' human rights, according to both Balbuena and Garcia.

"30 minutes a day in a clean playground. That should be something that every child in the city can do," Garcia said.

But these fixes are the "least" city officials can do and won't erase what the kids have already seen growing up inside the epidemic, Balbuena said.

"I hope no one thinks for one minute that the $2 million that was awarded to the six schools is going to, for one minute, erase what our kids have seen during this opioid epidemic," Balbuena said. "This is a Band-Aid to an open chest wound."

Neighborhood leaders also funneled some of the $7.5 million into five local parks, after surveying residents on how the money should be used.

At Scanlon Recreation Center, over half of the people surveyed requested a curling club at the park's ice rink, said Erin Farrell, a resident who works for the local nonprofit Impact Services . Farrell helped the parks figure out how to spend the money. So the rec center Scanlon used the money to buy curling gear.

"So, imagine we could have an Olympic champion come right out of here," Farrell said.

State board flexes its oversight muscles

The PA Opioid Misuse and Addiction Abatement Trust is a 13-member board made up of state lawmakers, county health commissioners, mayoral staff members and alcohol and drug treatment program administrators.

Two state senators who sit on the trust recently traveled to Kensington for a tour of the neighborhood. Sen. Gregory Rothman and Sen. Christine Tartaglione , who represents Philadelphia, initially voted the Kensington spending noncompliant.

In Kensington, Rothman said that before he visited, he didn't know children were experiencing the impacts of the opioid crisis in the neighborhood.

"If you had asked me this morning how many kids live in Kensington, I would've said, 'There are no kids in Kensington.'

After the walk, Rothman said that he would be thinking differently about the situation.

"It was really eye-opening and scary," he said of the tour through Kensington.

"I understand the effect the opioid crisis has had on the victims and the families," Rothman added. "But you don't think about the effect it has on communities and neighborhoods like this."

He said his initial "no" vote in June was due to "a lack of knowledge" about the need to fund community resources for children.

"I didn't know," he said. "I feel differently."

Rothman was not on the committee that heard Philadelphia's Oct. 3 appeal.

Community leaders and residents argue that giving children safe places to learn and play is part of preventing opioid misuse in the neighborhood.

Studies show that having a parent with substance use disorder is one of the biggest factors for children developing these problems later in life, said Sara Whaley , a researcher at the Johns Hopkins Bloomberg School of Public Health.

Exposure to a safe and trusting adult can help prevent that outcome, she said.

"Just a stable environment can really help kind of mitigate those risk factors," she said. "And schools play a huge role in that."

Whaley's team released the "Principles for the Use of Funds from the Opioid Litigation" in 2021, recommending investments in youth programming, harm reduction and housing assistance.

In other states, officials have not questioned similar spending. Some have allowed it for police cars and jail equipment.

Helping families stay in their homes is actually crucial to long-term, cost-efficient solutions to the crisis, said Bill McKinney of NKCDC.

Some people who sell drugs are doing it just to make rent, he explained.

"When you're not sure, and you gotta hit that corner now, because you got to make sure that your mom can stay in her house, that opens up a whole other can of worms," McKinney said.

"Those that are actually here understand that. Somebody from the middle of Pennsylvania who's never been to Kensington doesn't know what's going on and shouldn't have any input in what we do out here."

During the appeal, city officials argued that Kensington residents and children are uniquely vulnerable to the risk of developing opioid use disorder.

Home repairs help stabilize the lives of residents, while small business support reduces the vacant buildings and increases economic opportunities, said Keli McLoyd , director of Philadelphia's Overdose Response Unit. Both strategies lower the chances of drug use and overdose.

"The oversupply and proliferation of opioids hit harder here than in any single neighborhood in the United States," McLoyd said.

"To dispute this fact is to deny the reality of the effects of the narcotics trade in the neighborhood, to deny the constant and inescapable trauma experienced by every Kensington resident, and to deny the incredibly well documented relationship between trauma and risk of developing opioid use disorder."

Philadelphia now awaits a response from the state on its appeal to get all of its spending approved.

What the state decides, according to Hopkins researcher Sara Whaley, could impact how other jurisdictions across the country invest opioid settlement dollars — and whether they can direct some of those funds to schools, small businesses, housing and green spaces.

Kensington Voice KFF Health News .