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Federal and State Funding Opportunities

Colorado to receive over $1 billion for substance use and behavioral health over the course of 18 years

Stay connected to state and local entities as funding opportunities emerge

Drug overdose deaths in Colorado increased 38% between 2019 and 2020. The results of coronavirus and the increase in fentanyl has devastated our communities. Many of you have felt the impacts of this tragedy professionally and personally. No dollar figure will bring back the lives of loved ones lost.

For those still struggling and for those serving in this field, Colorado has the historic opportunity to make use of several significant funding sources to address this devastating public health crisis. We aim to distill some of these complex funding sources to increase their accessibility.

This consequential influx of one-time funds will create the most impact if deployed strategically and with understanding of complementary funding sources.

While still not sufficient to fully address the enormous economic and human cost of the opioid and other substance use crisis, these funds have the opportunity to make an enormous impact on the lives of Coloradans, if employed wisely.

Stay Informed on Funding Updates:

  • Reach out to your local Managed Service Organization, which will be releasing grant funding opportunities. There are 4 in the state: Diversus Health, Mental Health Partners, Signal Behavioral Health, and West Slope Casa. Identify a contact at the organization and make sure they know about your work.
  • Connect with your local substance use coalition, which may have a contact with the local county commissioner working on opioid settlement funds. If you are not familiar with your local coalition, contact our team at

American Rescue Plan Act of 2021 Funds Through the Colorado General Assembly for Behavioral Health

SB21-137 Behavioral Health Rescue Act, passed into law in June 2021 allocated $550 million of the American Rescue Plan Act (ARPA) federal stimulus funds to the state of Colorado for behavioral health, inclusive of mental health and substance use. These one-time funds are available for use between June 2021 through December 31, 2024.

SB21-137 Behavioral Health Rescue Act also specified use of $100 million of these funds for fiscal year 2021-2022. Any funds not expended by July 1, 2022, are available for the 2022-2023 fiscal year.

SB21-137 Behavioral Health Recovery Act

Here is a full description of the funding breakdown for the first year. Below are a few key components with information about accessing funds in italics.

New Grant Programs through Office of Behavioral Health (OBH)

Sign up for the OBH newsletter here to keep informed of funding opportunities and RFPs.

  • $9M for the county-based behavioral health matching grant program (OBH) – Importantly, this matching grant will match the amount that local governments allocate with their own funds to behavioral health. Stay tuned for release of this solicitation.
  • $50K Rural behavioral health vouchers – Solicitation was posted on the Vendor Self Service Portal (VSS) and has closed.

Funds Through Managed Service Organizations

Establish a relationship with your Managed Service Organization if you have not already, as they will announce information about these programs and funding opportunities in the coming weeks.

  • $1.6M for a new Recovery Support Services Grant Program (OBH)
  • $4M for the housing assistance program (OBH)
  • $10M for substance use treatment

Funding of Statewide Initiatives of the Governor’s Behavioral Health Task Force

These recommendations for funding were developed by the Governor’s Behavioral Health Task Force. Review their webpage to identify means to be involved.

  • $18M for the behavioral health workforce development, inclusive of mental health and substance abuse disorders (OBH). Register here for Colorado’s Behavioral Health Reform Workforce Development Work Group, which is still recruiting members.
  • $26M for comprehensive statewide care coordination system to create a one-stop referral system for mental health and substance use disorder services. A recently released report highlights findings from focus groups on culturally responsive care coordination in Colorado.

Addition of Funds to Existing Programs

For the remaining $450 million to be allocated for use between fiscal year 2022 and December 31,2024 a Behavioral Health Transformational Task Force composed of 16 bipartisan legislators and 25 subject matter experts will meet from August 2021 through January 2022. An external facilitator will manage this process of providing recommendations to the Colorado General Assembly and the Governor on policies to create transformational change in the area of behavioral health using the remaining $450 million of ARPA funds. Subpanel appointments will be made by July 23, 2021.

Importantly, the Behavioral Health Recovery Act provides a large amount of one-time funds over a relatively short period of time of 3.5 years.

Opioid Lawsuit Settlement Funds

It is expected that opioid lawsuit settlement funds will be available starting in 2022 and will be distributed over the course of 18 years. A conservative estimate suggests that Colorado will receive an initial amount of $400 million from various opioid pharmaceuticals and distributors over nearly two decades from a current settlement action and additional funds could come from other settlements.

The majority of funds will go to the local governments and regions using a formula.

Currently the funds will be divided in the following manner:

  • Direct allocation by formula to participating local governments
  • Formula allocation to regions
  • Statewide settlement infrastructure fund
  • Direct allocation to state government 

The allocation to regions will be administered by a regional board of elected and government officials appointed by county commissioners. To get involved in your regional board, consider reaching out to your county commissioner as they will be establishing these boards towards the end of 2021 and beginning of 2022.

The smaller allocation to the state will be overseen by a Statewide Opioid Crisis Recovery Funds Advisory Committee, which held an orientation meeting in early July through the Office of the Attorney General.

Importantly, the opioid settlement funds will be a sustainable source of funding over the course of nearly two decades. These funds are spent on opioids and other substance use disorder issues.

To stay informed about the status of the opioid settlement actions in Colorado, sign up for the newsletter from Heidi Williams, Director of Opioid Response, in the Office of the Attorney General.

Additional Federal Funds to the Office of Behavioral Health

Direct excerpt from OBH blog post June 14

The Colorado Department of Human Services, Office of Behavioral Health (OBH) will receive more than $94 million in additional federal block grant funding to increase substance use and mental health services over the next four years as the state responds to higher demand brought on by the COVID-19 pandemic.

As part of the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA), the federal Substance Abuse and Mental Health Services Administration (SAMHSA) awarded OBH an additional $27.1 million for the state’s Substance Abuse Prevention and Treatment block grant program (SABG) and an additional $16.2 million for its Community Mental Health Services block grant program (MHBG) that must be spent by March 14, 2023. The block grants are managed by OBH and are noncompetitive federal awards that fund behavioral health services in all 50 states.

On top of this boost, OBH will receive another $23.4 million and $28.1 million for the SABG and MHBG programs, respectively, through the American Rescue Plan Act (ARPA) stimulus package. OBH must spend these dollars by Sept. 30, 2025, and is working to draft a spending plan bolstering programs that have experienced increased demand during the pandemic. Many of the priorities from the CRRSA funds will be extended with the ARPA funds. The State’s plan for the ARPA funds was due in July.

The preliminary spending plan for the $43 million in CRRSA funds includes the following allocations for the next two years listed in this blog post. Funding amounts could change depending on bills passed in the 2022 legislative session or emerging priorities. OBH will release information soon on the spending plan for the ARPA funds.

American Rescue Plan Act of 2021 Funds Direct to Local Jurisdictions (Not Specified for Behavioral Health)

The American Rescue Plan Act of 2021 signed by President Biden included $350 billion for state and local governments. In Colorado, $1.1 billion is allocated for counties, $551 million is allocated for metropolitan cities and $265 million for local governments with 50,000 or fewer people. These funds are flexible and not designated for behavioral health.

Local governments could use a portion of these funds as the matching portion to make them eligible for the county-based behavioral health matching grant in SB21-137 that will be coming out of the Office of Behavioral Health in the coming months.

Additional Ongoing Federal and State Grant Opportunities

Organizations can also take advantage of currently existing federal and state grant opportunities as well. Here is a limited compilation of possible grant opportunities organized by topic area.

Additional funding sources include grant opportunities from Health Resources and Services Administration (HRSA), Bureau of Justice Assistance (BJA), and Colorado Department of Public Health and Environment (CDPHE).


For all of these funds to be managed effectively, it will be imperative that decision-makers have a comprehensive picture of various funding opportunities and how they may intertwine. In particular, it will be worthwhile to assess which items would be better served by large amounts of short term one-time funding at the state level and utilize the Behavioral Health Recovery Act funds, versus items that require a more localized approach and need a sustainable funding source, which may be better served by the opioid settlement funds.

For organizations on the ground, it will be key to stay connected to statewide organizations as these funding opportunities will be rolled out quickly over the coming months and years.

The Colorado Consortium for Prescription Drug Abuse Prevention Grant Writing Assistance Program is available to connect eligible organizations to a professional grant writer, once a grant opportunity is identified.