CLEVELAND – The Ohio Attorney General is trying to block a portion of the recently approved $ 1.9 trillion coronavirus relief package, arguing that it illegally restricts the state’s ability to cut taxes.
In a lawsuit on Wednesday seeking an injunction, Attorney General Dave Yost, a Republican, dismissed the provision of the American Rescue Plan, which involves $ 350 billion for state and local governments in need of financial aid, as unconstitutional.
Lawmakers added language to the $ 1.9 trillion stimulus – approved on party lines in Democratic-controlled Congress and sanctioned by President Joe Biden – to prevent states from using the funds to offset tax cuts. Yost said the stipulation would undermine Ohio’s ability to collect and maintain an estimated $ 5.5 billion in funding.
“It is a flagrant violation of federalism,” Yost said in a telephone interview with NBC News. “Congress has no authority to enact this type of law.”
Yost gave as an example a situation in which the state tax commissioner may be assessing a tax dispute involving a large employer.
“Let’s say we are talking about an Amazon or an auto parts manufacturer – something that has many other participants in a similar situation,” he said. “Under this provision in Covid’s bill, he would not be free to decide this issue in a way that would reduce Ohio’s tax revenue.”
Yost’s lawsuit came a day after 21 other Republican state attorney generals threatened legal action against the aid package. He said he made the decision to sue without consulting Ohio Republican Governor Mike DeWine, but informed Lt. Governor Jon Husted before filing the suit.
Biden is scheduled to visit Ohio next week as part of a country trip to promote the project.