Biden administration threatens to get Covid money back from Arizona because of school anti-mask policies

The Biden administration on Friday threatened to cancel millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the funds to sabotage efforts to contain the spread of the virus.

Republican Governor Doug Ducey’s office has 60 days to change two federally subsidized elementary school programs totaling $173 million, or redirect the funds to “qualified uses” “, the Ministry of Finance said in a letter.

The programs impose conditions that discourage compliance with mask wearing in schools, contradicting Centers for Disease Control and Prevention guidance on how to reduce Covid transmission, the letter read.

If Arizona fails to fulfill or refuses to comply with Treasury requirements, the Biden administration could withdraw that stimulus money and withhold a second round of pandemic relief funding, the Treasury said.

Ducey’s office did not immediately respond to CNBC’s request for comment on the letter.

The federal funds in dispute come from the Coronavirus State and Local Financial Recovery Fund program, or SLFRF, part of $350 billion in Covid’s multibillion-dollar relief package, known as the Relief Plan. save the United States, that President. Joe Biden signed into law last year.

The funds are intended “to mitigate the financial impacts stemming from the COVID-19 public health emergency, including to support efforts to contain the spread of the virus”, Treasury noted in a letter to Ducey’s Office of Strategic and Budgetary Planning.

But two Arizona school programs use federal money to “impose conditions on participation in or acceptance of a service that undermine efforts to prevent the spread of COVID-19 and discourage compliance.” adhere to evidence-based solutions to prevent the spread of COVID-19,” the letter said.

The $163 million in Supplemental Education Grants Program, for example, only authorizes funding to schools that do not enforce mask requirements, the Treasury wrote.

The Other programs mentioned, totaling $10 million, provides grants to help parents move their children out of schools that are said to impose “unnecessary closures and school mandates.”

That program is “only available to families if the student’s current or previous school requires the use of face coverings” during the school day, the Treasury letter said.

The latest letter, from the Treasury Office’s Acting Deputy Compliance Director Kathleen Victorino for Rehabilitation Programs, comes after months of back and forth between the Biden administration and the Grand Canyon State.

The Treasury Department in October asked Arizona to explain how it would fix the issues identified in the two school programs.

A month later, the state responded, detailing its rationale for the anti-masking conditions but not “describing any plans to remediate the identified issues,” Victorino wrote.

The latest battle over Covid safety rules comes as the highly transmittable omicron variant produces an unprecedented surge in cases. The U.S. Supreme Court on Thursday blocked enforcement of the Biden administration’s rule that employees in large companies must be vaccinated or tested weekly, but the high court upheld the vaccine rule. please for medical staff.

But the pre-omicron dispute. Last year, the Republican-controlled legislature in Arizona tried to pass provisions banning the mandatory wearing of masks and other Covid safety measures. In November, the State Supreme Court ruled that the measures were unlawfully adopted.

– CNBC’s Tom Franck contributed to this report.