Hobbs: Federal COVID money illegally used for kindergarten grants

Gov. Katie Hobbs declared a $50 million grant that her predecessor, Gov. Doug Ducey, awarded to fund all-day kindergarten through the voucher-style Empowerment Scholarship Account (ESA) program is "illegal and invalid."

Driving the news: Hobbs' administration on Wednesday informed state Treasurer Kimberly Yee the grant money from American Rescue Plan Act violates state and federal law.

• The money was intended for use in the next three academic years and hasn't yet been transferred from the treasurer to the Arizona Department of Education.
• Parents can spend ESA money on private school tuition, tutors, materials or other educational uses.
• The grant would provide up to $3,500 per kindergartner in the program, though the agreement between the governor's and treasurer's offices doesn't limit how it can be spent.

Between the lines: The grant violates provisions of ARPA that require the money be used to "address disparities in educational outcomes that predate the pandemic," Sarah Brown, Hobbs' budget director, said in a letter to the treasurer's office.

• If the money is illegally spent, the federal government could force the state to pay back the $50 million, Brown said.
• The Hobbs administration also said it violates the Arizona Constitution's equal protection clause and a provision requiring the Legislature to establish "a general and uniform public school system."
• Hobbs is evaluating other possible uses for the money.

Zoom in: She said the grant was intended to improperly fund full-day kindergarten for ESA students.

• The Department of Education estimated the average ESA for kindergartners with no disabilities for the current school year at $4,000-$5,000.

What they're saying: Beyond the legal issues, the grant "violates basic principles of fairness," Brown wrote.

• The state only funds half-day kindergarten for public school students as well, though many individual districts have all-day programs.
• "It is not fair or just that the State would arbitrarily fund all-day kindergarten for some students with ESAs while funding only half-day kindergarten for the majority of children that attend our public schools," she said.

The other side: Yee said in a press statement her office is reviewing the legality of Hobbs' decision and "determining next steps."

• "Governor Hobbs has just denied thousands of Arizona kids access to kindergarten through this politically driven and belligerent decision," she said.

Context: Hobbs is a fierce critic of the ESA program. In her budget plan in January, she proposed repealing a 2022 law that expanded it to all K-12 students in Arizona, but the budget she signed last month funds the fully expanded program.

• Legislative budget analysts estimated the program will cost about $625 million in fiscal year 2024.
• Democrats are largely hostile to the ESA program, which most Republicans at the Capitol have enthusiastically supported.
• Hobbs is a Democrat, while Yee and Ducey are Republicans.

Flashback: This isn't the first time Hobbs has pulled back federal grant money Ducey awarded in the final days of his administration.

• In February, she rescinded $210 million worth of federal COVID dollars Ducey gave out shortly before leaving office.