Feds tell Ducey he can't use COVID money for anti-mask grants

PHOENIX — COVID grant dollars cannot be used to penalize schools that impose mask mandates, a key federal official is telling Gov. Doug Ducey.

And if Ducey doesn’t fix the problem, he is threatening to take back the federal money.

The funding, Arizona’s share of a $350 billion program in state and local relief dollars, were designed to finance “evidence-based efforts to stop the spread of COVID-19,” Deputy Treasury Secretary Adewale Adeyemo told Ducey in a letter Tuesday.

Instead, Adeyemo said, Ducey is distributing the money only to schools that do not require students and staff to wear face coverings during classroom hours and while on campus. And the governor also is using the cash to give out $7,000 vouchers to parents who want to pull their kids out of schools with mask mandates so they can instead go to private and parochial schools without such a requirement.

Only thing is, Adeyemo said, the purpose of the money is to “mitigate the fiscal effects stemming from the COVID-19 public health emergency.” And that, he said, includes supporting efforts to actually stop the spread of the virus.

What Ducey has done, the treasury official said, is actually discourage schools from following protocols that are designed to contain the virus. Adeyemo said that is “not a permissible use” of the federal funds.

Ducey and his aides are reviewing the letter and will respond, said C.J. Karamargin, a gubernatorial press aide. But he said that, as far as Ducey is concerned, he has done nothing wrong.

Still, Karamargin acknowledged that how his boss is dividing up the cash comes down to Ducey’s personal support of “school choice” and vouchers, which existed long before there was a COVID outbreak.

“The way we are using it aligns with the governor’s long-stated goal of giving parents the opportunity to choose what’s best,” Karamargin said. And he brushed aside questions about the fact that the federal dollars were designed to help prevent the spread of the virus, not to provide dollars for private and parochial schools.

“We believe the use of the funds is appropriate,” Karamargin said.

The governor’s press aide also took a slap at what he said has been the Biden administration’s “focus on mandates.”

“Here in Arizona we trust families to make decisions around what’s best for their children,” Karamargin said. And he added that given the challenges of the past school year, that focus should be on giving families the resources they need to get their kids caught up educationally.

“That’s exactly what this program does: giving families in need the opportunity to access education resources like tutoring, child care, transportation and more,” he said. “It’s baffling anyone would disagree with this approach.”

But Ducey put only a minimal link between the new voucher program, formally known as “empowerment scholarship accounts,” and financial need. Eligibility is limited to households at or below 350% of the federal poverty level, the equivalent of $92,750 a year for a family of four.

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And Karamargin had no immediate response to how withholding federal aid from schools with mask mandates actually helps education or families.

Much of the battle is over $163 million Arizona got through the American Rescue Plan to boost per-pupil funding.

Ducey announced in early August, however, that those dollars will be available only to district and charter schools “following all state laws” as of Aug. 27. And the governor contends that schools that are requiring students and staff to wear masks are not in compliance.

Since then, Maricopa County Superior Court Judge Katherine Cooper voided the ban on mask mandates, saying it — and multiple other provisions in state budget reconciliation bills — was enacted illegally.

Karamargin, however, has said it is within Ducey’s discretion how to distribute the federal dollars. And he said the same is true over the $10 million program to provide those $7,000 vouchers to parents to send their children to private or parochial schools.

In that case, the governor said the money, which also can be used for online tutoring and child care, is to help families “facing financial and educational barriers due to overbearing school mandates.”

“These are American Rescue Act Funds,” Karamargin said at the time the program was announced. “They are funds made available to Arizona for the governor to use as he sees fit.”

Adeyemo, however, said that’s not the way the federal law reads. He said the state cannot impose conditions on receipt of these dollars to acting in ways “that would undermine efforts to stop the spread of COVID-19 or discourage compliance with evidence-based solutions for stopping the spread.”

He also reminded Ducey that the state, before receiving nearly $2.1 billion of such dollars, provided a certification that it would use all the dollars it received in compliance with the federal law and any regulations issued by the Department of the Treasury. And those limit the use of the funds to responding to the public health emergency and its negative economic impacts.

All that, Adeyemo said, limits Ducey’s discretion.

He has now given the governor 30 days to respond explaining how the state will “remediate the issues identified” with the two programs, the one tying aid to schools on not having a mask mandate and the other providing vouchers so parents can get their kids out of schools that require masks.

“Failure to respond or remediate may result in administrative or other action,” Adeyemo said, including the federal government demanding its money back.

There may be other fallout.

The U.S. Department of Education already has launched civil rights investigations into six Republican states that forbid schools from requiring masks of faculty and students, arguing that may violate the rights of students with disabilities. The agency said it has been watching other states, including Arizona.