Treasury threatens to claw back COVID-19 funds because of Arizona school anti-mask rules

The Biden administration is threatening to claw back federal COVID-19 relief funding from Arizona unless the state stops directing the money to schools without mask mandates.

In a letter sent Friday, the Treasury Department said Arizona's $163 million Education Plus-Up Grant Program and its COVID-19 Educational Recovery Benefit Program undermine efforts to stop the coronavirus.

The programs, funded with payments from the Coronavirus State and Local Fiscal Recovery Funds, impose conditions that discourage compliance with wearing masks in schools, contradicting guidance from the Centers for Disease Control and Prevention on how to reduce COVID-19 transmission, the letter said.

The $350 billion state and local funding program was enacted as part of the American Rescue Plan.

The funds are intended "to mitigate the fiscal effects stemming from the COVID-19 public health emergency, including by supporting efforts to stop the spread of the virus," Treasury noted in the letter.

According to the administration, a recipient may not use the federal money for any program or service that includes a term or condition that undermines efforts to stop the spread of COVID-19.

The state's Plus-Up Grant Program only directs funding to schools that don't have mask requirements, and the $10 million Educational Recovery Benefit Program provides up to $7,000 per student to parents facing financial and educational barriers due to having children in schools that are deemed to be imposing "unnecessary closures and school mandates."

That program "is available only to families if the student's current or prior school requires the use of face coverings" during the school day, according to the Treasury letter.

According to the letter, Gov. Doug Ducey's (R) office has 60 days to redirect federal funds to eligible users or change the two programs so they are in compliance.

If not, the federal government said it will move to recover the relief money. The Treasury Department threatened to withhold the next tranche of aid as well.

In a statement posted on Twitter, Ducey blasted President Biden for being "out of touch the American people."

"When it comes to education, President Biden wants to continue focusing on masks. In Arizona, we're going to focus on math and getting kids caught up after a year of learning loss," he wrote. "We will respond to this letter, and we will continue to focus on things that matter to Arizonans."