Arizona Governor Accuses Previous Administration of ‘Illegally’ Allocating $50 Million in Government Funds

Arizona Governor Accuses Previous Administration of ‘Illegally’ Allocating $50 Million in Government Funds
Arizona Supreme Court Chief Justice Robert Brutinel, left, signs the official Arizona general election canvass document as Katie Hobbs, the Democratic governor-elect and current secretary of state, second from left, looks on while Arizona Republican Gov. Doug Ducey, second from right, and Arizona Attorney General Mark Brnovich, right, sit at the table as well during a signing ceremony at the Arizona Capitol in Phoenix, Ariz., on Dec. 5, 2022. (Ross D. Franklin/Pool/AP Photo)
Mimi Nguyen Ly

Arizona Gov. Katie Hobbs, a Democrat, has accused the previous state administration of misappropriating $50 million in government funds.

The funds were part of what the federal government provided to Arizona under the $1.9 trillion "American Rescue Plan," an effort by the Biden administration, signed into law in March 2021, that intended to mitigate the economic impacts of government-mandated restrictions and lockdowns in response to the COVID-19 pandemic.

In a release on May 24, Hobbs said that former Gov. Doug Ducey, a Republican, just prior to leaving office, made a $50 million grant that she deems was "illegal and invalid."

The grant, made to the state treasurer, was intended to fund all-day kindergarten for recipients of empowerment scholarship accounts, Hobb's office said.

Arizona's Empowerment Scholarship Account (ESA) program gives parents the ability to use money that would have gone to public education to send their child to a school of their choice. Parents can use the funds for a private school, tutoring services, specialized teachers, therapists, and other educational resources.

"The grant agreement attempted to improperly use federal funds from the American Rescue Plan Act to fund all-day kindergarten for ESA recipients, despite the fact that the State funds only half-day kindergarten for public school students," Hobb's office said.

She said she would recall the grant agreement.

“Illegally giving $50 million to private schools while failing to properly invest in public education is just one egregious example of the previous administration’s blatant disregard for public school students,” Hobbs said in a statement.

“I will always fight to protect our public schools and work to give every Arizona student the education they deserve.”

She added: "Today, we averted a violation of federal law and the State Constitution. In my administration, we are committed to deploying federal funds lawfully and equitably."

According to Hobb's office, the grant agreement "violates multiple constitutional provisions, including on equal protection, the gift clause, and maintenance of a general and uniform public school system."

"The agreement is also inconsistent with the American Rescue Plan Act because it does not address educational disparities as alleged in the agreement," according to her office, even though the grant agreement had claimed to do so.

The office is now looking for alternatives to allocate the $50 million.

Arizona Treasurer Kimberly Yee, a Republican who also served while Ducey was in office, responded to Hobbs' cancellation of the grant for ESA recipients, saying in a statement on Thursday that Hobbs "has just denied thousands of Arizona kids access to kindergarten through this politically driven and belligerent decision."

"As has become the norm for this governor, my office first learned of her action through a press release prior to receiving the letter, and we have yet to receive any communication from the Governor or her team on this matter other than the letter," said Yee. "Our legal team is currently reviewing the lawfulness of the governor’s move and determining next steps.”

Yee accused Hobbs of not caring about "what is best" for Arizona kids, and not respecting parents' rights to choose the best environment for their child's education.

"Instead, she is using these children as pawns in a desperate and transparent attempt to win back support from union bosses and her ultra-progressive base.

"Educational choice is the civil rights issue of our time, and unfortunately, Governor Hobbs thinks she knows better than parents. I fundamentally disagree, and so do Arizona families.”

Biden's American Rescue Plan had provided direct $1,400 payments to most Americans. It also funded unemployment benefits, a cumulative $350 billion for state and local governments, billions in funding for COVID-19 vaccines and their distribution, and funding for schools to reopen safely.
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