Treasury Department escalates threat to strip Arizona of COVID-19 relief help over Ducey’s school programs

By Stacey Barchenger | Arizona Republic

Federal officials are escalating their threat to withhold federal stimulus dollars from Arizona over Gov. Doug Ducey’s refusal to make changes to two programs that provide funding to schools that do not implement recommended public health protocols.

In a Friday letter to Ducey’s office, a U.S. Treasury official again warned that the two initiatives the governor unveiled in August appeared to prevent COVID-19 mitigation protocols, and more forcefully warned of the consequences of continuing the programs as-is.

Ducey must direct the funding to eligible uses or make changes to the two education program within 60 days, or Treasury may begin to recoup funding, the letter states. 

“Treasury may also withhold funds from the state of Arizona’s second tranche installment of (American Rescue Plan) funds until Treasury receives information that confirms that the issues described above have been adequately addressed,” the letter from Deputy Chief Compliance Officer Kathleen Victorino reads. Arizona and other states are slated to get their second share of American Rescue Plan funds this spring, with more than $2 billion on the way to the Grand Canyon State.

Ducey’s two programs, the educational recovery benefit and education plus-up grant program, provided funding to families and schools that did not implement COVID-19 related mandates. The governor earmarked $163 million for both programs.

At the time, Arizona law prohibited such mandates, but the state Supreme Court has since overturned the law based on the procedure lawmakers used to pack unrelated issues into budget bills.

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