South Dakota’s counties and cities that received the first waves of national opioid-settlement money have spent far less than half of their allocations as of the end of 2025, leaving some local officials still sorting out how to use the funds years after the distributions began. The payments flow to communities under South Dakota’s memorandum of agreement for approved uses, while the state itself has continued to award grants tied to statewide opioid-related efforts.
The spending reports reviewed through the end of 2025 show that local governments in South Dakota have spent less than half of the first $9.6 million they received. The distributions started in late 2022, and some officials in the 53 counties and 13 cities that signed the memorandum said they had not made plans for how to use their shares. During the same period, opioid overdose deaths in South Dakota rose to 41 in 2025 from 39 in 2024.
South Dakota was allocated just under $99 million from a national settlement with opioid manufacturers, distributors and pharmaceutical companies that began distributing payments to all 50 states in 2021. The funding formula includes the number of overdose deaths, the number of opioids shipped to a state and the number of people with opioid use disorder in the state. The bulk of South Dakota’s settlement money is tied to distributor settlements involving companies including McKesson, Cardinal Health and Amerisource Bergen.
Of the state’s total, about 70% is directed to South Dakota through the Department of Social Services, while roughly 30%—about $29 million—is divided among local governments. Those local allocations go to the 53 counties and 13 towns and cities that signed the memorandum of agreement to spend the local share on specific approved uses, and the memorandum requires participating local governments to submit annual reports to DSS on how they used the money.
The slower pace of local spending drew attention from lawmakers earlier in the year. In December, some lawmakers expressed concerns that the state was not spending its funding quickly enough. In April, DSS Secretary Matt Althoff and Gov. Larry Rhoden announced $7.82 million in grants, bringing South Dakota’s statewide share of unspent disbursements to about $2.9 million out of a total $23 million.
State spending has included nearly $500,000 for naloxone access statewide and about $797,000 for a prescription drug monitoring program, along with the $7.82 million slate of grants. The national settlement agreement requires that at least 70% of spending be directed toward opioid remediation efforts, according to the story. DSS also said it does not dictate how or when local governments spend their shares. In a statement, Althoff said the Department of Social Services “does not have oversight or regulatory authority over how local governments spend their share of the funds,” adding that local spending is governed by the South Dakota Opioid Settlement Memorandum of Agreement, which local governments joined in 2022.
While some local governments have spent large portions—or nearly all—of their shares, the overall pattern remains “slow, metered spending,” the reporting said. Eleven counties had not reported any spending to DSS by the end of 2025, and several others had spent only fractions of their allotments. Potter County auditor Tye Vander Vorst said the county had not begun allocating dollars because it was still unclear how much it would receive each year and where the money could be spent most effectively in the meantime. He described the difficulty of choosing how to use small, irregular amounts, saying: “What do you do? Do you wait and sit on what you can accumulate or do you try to spend $200 here, $200 there on stuff?” and warning against spending that could later be judged wrong.
The challenge can be especially acute for rural governments with limited programs already in place. Face It Together, a nonprofit addiction-recovery provider, received one of the $7.82 million statewide grants, with the organization set to use $750,000 over three years for peer-to-peer addiction programming at the state penitentiary in Sioux Falls. CEO Megan Colwell said the organization is seeing a nearly equal number of alcohol and opioid addiction cases and said peer coaching can connect people struggling with addiction to coaches who have shared similar experiences, while also offering relationships and problem-solving. Colwell described the need for support not only in rural areas but also in South Dakota’s two urban centers of Rapid City and Sioux Falls, and she pointed to remote coaching as a way to connect residents in need with support where local programs may be sparse.
Even among local governments that face similar conditions, spending strategies vary. In Codington County in eastern South Dakota, representatives said the county had not yet reported any spending of its opioid-settlement allotment, and they expected to conserve their own share while considering options tied to recidivism and a separate $50,000 grant for an opioid awareness campaign. A committee has been established to discuss potential funding opportunities, but no specific decisions had been made at the time of the reporting. In contrast, Watertown—Codington County’s biggest city—had spent the entirety of its $161,544 share on the Watertown Police Department, hiring a part-time social worker to help respond to mental health, overdose and other drug-related calls alongside a full-time mental health officer. Watertown chief of police Tim Toomey said the city focused on meeting addiction-service needs in Watertown while hoping the resources would benefit the broader county, and he said the city and sheriff’s office had not previously met to coordinate spending.
Nationwide, low local spending has been a broader pattern tied to the kinds of implementation constraints South Dakota officials described. Karen Scott, president and program director of the national Foundation for Opioid Response Efforts, said in an interview that the organization has seen local governments across the country struggle to run effective spending programs, especially when settlement amounts are low and substance abuse issues may not be visible. She said prioritizing prevention even when overdose rates are not immediately obvious can help prevent future problems, citing “upstream, really prevention-oriented” work for “kids, for families and the community.” Ken Shatzkes, who also leads FORE, said states distribute local shares differently, with allocations anywhere from 15% to 50% depending on each state’s individualized crisis experience. He said South Dakota’s approach is relatively similar to many states and pointed to the way counties and local governments often focus on law enforcement, corrections and emergency services when building programs from available resources.
Several county auditor offices said their settlement money has been directed toward those kinds of uses. Ziebach County auditor’s office told News Watch that its opioid-settlement funds went to the sheriff’s office for drug tests and prevention initiatives, and Sanborn County auditor’s office said its nearly all of its current $13,000 allocation went to existing programs like law enforcement and first responder drug training to free up space in the general fund. Shatzkes said local governments can make the process more effective by drawing on people with knowledge about substance abuse in their areas, citing a North Carolina example where a county hired its local emergency medical services responder as opioid settlement coordinator. Scott also said rural areas could improve outcomes by coordinating with neighboring counties or municipalities, and Colwell said counties that have small settlement amounts may benefit from statewide networks such as Face It Together and Emily’s Hope, which provides naloxone boxes and substance abuse support across South Dakota.
At the core of South Dakota’s local spending decisions is an uncertainty about timing and amounts, alongside limited capacity to build and sustain programs with small, sporadic funding. For local officials, the result can be postponement—waiting to make plans until clearer amounts arrive and deciding how best to ensure limited dollars translate into on-the-ground coverage for treatment, prevention and response.