(The Center Square) – Ohio Attorney General Dave Yost says the federal government is holding the state’s American Rescue Plan money hostage, and he has filed motion in federal court to allow Ohio to have control of its tax structure and economic policy.
Yost filed a request for an injunction Wednesday in the U.S. District Court of Southern Ohio to bar what he called the enforcement of the “Tax Mandate” to the American Rescue Plan at the last minute. Yost said the provision exceeds congressional authority.
“The federal government should be encouraging states to innovate and grow business, not holding vital relief funding hostage to its preferred pro-tax policies,” Yost said in a news release.
The Tax Mandate in the American Rescue Plan forces Ohio, along with every other state, to accept the money with conditions, Yost said. One of the conditions is the funds cannot be used, directly or indirectly, to offset tax cuts or credits.
For Yost, that means states can either accept the money or keep their sovereign authority to reduce taxes.
“Slipping last-minute conditions into a plan meant to help people that instead handcuffs Ohio is why people don’t trust government,” Yost said. “And it almost always leads to constitutional mischief.”
Yost’s lawsuit came a day after 21 state attorneys general wrote U.S. Secretary Janet Yellen, arguing the same legislation is an unconstitutional intrusion on state sovereignty.
The letter wants assurances from Yellen by Tuesday. West Virginia Attorney General Patrick Morrisey said if those assurances don’t come, he plans to go to court. West Virginia Gov. Jim Justice has introduced a plan during the state’s legislative session that would eliminate the state’s income tax.
“Federal spending power has clear limitations,” Morrisey said. “Congress may not micromanage a state’s fiscal policies in violation of anti-commandeering principles nor coerce a state into forfeiting one of its core constitutional functions in exchange for a large check from the federal government. Such ‘economic dragooning’ of the states cannot withstand constitutional scrutiny.”
Joining West Virginia in the letter were Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas, Utah and Wyoming