Trump funding freeze triggers confusion over effects

Uncertainty reigned as state and local officials scrambled to determine the effects of President Trump's Tuesday directive pausing federal grant funding, which a judge halted shortly before it was scheduled to go into effect.

Why it matters: The chaos illustrates just how significant a role federal money plays in the lives of many Arizonans — the city of Phoenix alone anticipates receiving $3.3 billion in grants this year.

• These funds pay for programs and projects such as low-income housing vouchers, health clinics, Phoenix Sky Harbor International Airport's new taxiway, transportation development and policing efforts.

Catch up quick: An initial memo appeared to direct federal agencies to temporarily pause the disbursement of "all federal financial assistance" by day's end to allow the administration to review government spending. It said direct assistance programs like Social Security and Medicaid would not be impacted.

• By midday, a follow-up memo clarified the order did not apply "across the board" and was limited to programs implicated by the president's recent executive orders, "such as ending DEI, the green new deal and funding nongovernmental organizations that undermine the national interest."
• Minutes before it was to take effect, U.S. District Judge Loren L. AliKhan blocked Trump's order with an administrative stay that expires Monday.

State of play: Christian Slater, a spokesperson for Gov. Katie Hobbs, told Axios on Tuesday morning that the administration was still trying to determine what the freeze would mean for state agencies.

• The Federal Highway Administration indicated to the Arizona Department of Transportation it would continue providing reimbursement and authorizing projects until getting additional guidance, ADOT spokesperson Steve Elliott told Axios.
• The Arizona Department of Health Services said Tuesday afternoon it was still seeking information from the feds about the effects of the freeze.

Threat level: State Medicaid programs and Head Start early childhood education programs, among others, were locked out of the online payment portal run by the U.S. Department of Health and Human Services on Tuesday, CBS News reported.

• Arizona Department of Education spokesperson Doug Nick confirmed the Head Start portal had been down all day. Federal officials later informed the agency that Head Start won't be subject to the freeze, he said.
• Arizona's Medicaid program was shut out of the portal earlier in the day but had regained access in the afternoon, Slater said.

Zoom in: The pause won't affect Title I funding economically disadvantaged schools, special education funding or other formula grants, Superintendent of Public Instruction Tom Horne announced.

• And it won't affect the $6 million in federal COVID relief funding slated to go to the financially beleaguered Isaac Elementary School District, which is already being held by the Arizona Department of Education.
• But because many details remain uncertain, Horne said, he instructed the department to obtain federal funds it'll need over the next two weeks.
• Phoenix Union High School District was unsure whether Trump's order would affect federal funding for school lunches, which is provided through the U.S. Department of Agriculture, the Arizona Republic reported.

What we're watching: Universities are major recipients of federal research funding and could suffer high-dollar impacts.

• In an email to faculty Monday, UofA senior vice president of research and innovation Tomás Díaz de la Rubia encouraged researchers to seek alternative funding sources from foundations and non-federal sponsors in anticipation of potential federal funding changes.

Zoom out: Arizona's Kris Mayes was among a group of Democratic AGs that sued the Trump administration to overturn the freeze.

• Several nonprofits and a small business organization also sued, which led to the ruling that halted the pause.