Ohio Attorney General Dave Yost filed a lawsuit in federal court on Wednesday to try to block language in President Biden’s $1.9 trillion coronavirus relief package that puts restrictions on states’ ability to cut taxes if they accept federal funding.
The lawsuit comes a day after 21 other Republican state attorneys general warned Treasury Secretary Janet Yellen to clarify that the language doesn’t impose a blanket ban on states’ ability to cut taxes.
“The federal government should be encouraging states to innovate and grow business, not holding vital relief funding hostage to its preferred pro-tax policies,” Mr. Yost said.
The lawsuit, which names Ms. Yellen and the Treasury Department as defendants, asks the court to block language saying states aren’t allowed to use the $350 billion in state and local funding to offset revenue losses from tax cuts.
Attorneys for the state argued that Congress overstepped its constitutional authority in including the language.
“In essence, States that abide by the Tax Mandate’s terms are conducting their tax policy at the behest of the central government,” the lawsuit says. “That allows Congress to control indirectly what it cannot control directly. And that violates the Tenth Amendment.”
Treasury has indicated it believes Congress is on solid constitutional and legal footing with the language and that the law doesn’t completely ban states from cutting taxes.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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