Treasury: Arizona risks COVID-19 relief funds over anti-mask mandate rules

Treasury threatens to pull COVID-19 funding from Arizona

The U.S. Treasury Department is now threatening to cut pandemic funding to Arizona if Gov. Doug Ducey continues to undermine mask mandates in schools.

WASHINGTON - The Biden administration is threatening to recoup COVID-19 relief funds sent to Arizona over state provisions that it says discourage families and school districts from following federal guidance recommending face coverings in schools.

At issue are two state programs that are meant to help schools and students but that direct funding away from jurisdictions with mask requirements. Arizona’s Education Plus-Up Grant Program provides $163 million in funding to schools, but districts that require face coverings are ineligible. And its COVID-19 Educational Recovery Benefit Program provides for up to $7,000 for parents if their child’s school requires face coverings or quarantines after exposure. It lets parents use the money for private school tuition or other education costs and its design mirrors the state’s existing school voucher program.

The program has had few takers, despite Republican Gov. Doug Ducey’s office touting it as a response to an outcry from parents. As of last week, only 85 students were getting the vouchers and less than $600,000 of the $10 million had been allocated.

Also last week, the governor created a third program that is likely to run afoul of Treasury Department spending rules. It is another $10 million school voucher program for parents whose children’s schools close for even one day after Jan. 2 due to COVID-19.

In a Jan. 14 letter, the Treasury Department warned that the state has 60 days to remove the anti-masking provisions before the federal government moves to recover the relief money, and it threatened to withhold the next tranche of aid as well.

The Centers for Disease Control and Prevention recommends universal mask-wearing in school settings to prevent the spread of COVID-19.

"By discouraging families and school districts from following this guidance, the conditions referenced above undermine efforts to stop the spread of COVID-19," the Treasury Department wrote. "Accordingly, these school programs as currently structured are ineligible uses of (Coronavirus State and Local Fiscal Recovery Funds)."

Ducey’s chief of staff on Friday pushed back against the Biden administration’s claims.

"We think that this program is aboveboard," Daniel Ruiz said. "We’re going to defend that program and any other future program that is designed to get kids caught back up and mitigate the learning loss" that has taken place over the last year.

Arizona has already received about half of the $4.2 billion awarded to the state under the 2021 coronavirus relief bill.

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Christie reported from Phoenix.