The Biden Treasury Department threatened Friday to claw back some of Arizona's federal pandemic aid if the state fails to halt or reform school programs that flout mask requirements in schools.
The warning is part of the ongoing struggle between Republican Gov. Doug Ducey and the Biden administration over how the $4.2 billion in COVID-19 aid money that was awarded to the state should be used.
In October, Arizona was penalized for the first time by Treasury over its uses of the funds. Ducey, however, declined to make any changes to the way the money was being spent.
In 2021, Ducey announced the introduction of two new education programs costing $173 million in total that would help students and families avoid attending schools with mask mandates in place.
The first program, which cost $163 million provides up to $1,800 in additional funding per student to public and charter schools that both remain open for in-person learning, and do not require a mask mandate.
The second program, a $10 million endeavor, funds vouchers of up to $7,000 to help lower-income families leave districts where the schools require masks or impose other COVID-19 restrictions.
The letter, which was sent by acting Deputy Chief Compliance Officer Kathleen Victorino of the Treasury Office of Recovery Programs, gives the state 60 days to change its policies or Treasury may begin to recoup the funds. The letter additionally threatens to withhold the second round of money that it scheduled to be dolled out later this year.