(COLUMBUS, Ohio) – March 17, 2021 — Ohio Attorney General Dave Yost has filed a motion for preliminary injunction against a part of the American Rescue Plan Act that threatens to withhold needed federal funds from Ohio in an effort to handcuff the state’s authority to make changes to its tax structure and economic policy.
The injunction request, filed today in U.S. District Court of Southern Ohio, seeks to bar the enforcement of the “Tax Mandate” added at the last minute into the stimulus plan.
That provision exceeds the authority of Congress.
“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.
Ohio is expected to receive $5.5 billion in funding that will help the State and its citizens recover from the COVID-19 pandemic. The pandemic has significantly impacted commerce in Ohio and has led to a $1.1 billion loss in revenue.
The Tax Mandate added into the relief package by Senate Democrats forces Ohio and every other state to accept that money with significant conditions.
One of those conditions includes that funds cannot be used, directly or indirectly, to offset tax cuts or credits.
That presents states with a choice to either accept the stimulus funds or keep their sovereign authority to reduce taxes.
Under this plan states cannot have both. This coercive offer is unconstitutional. Congress exceeded its powers when it passed the Tax Mandate.
AG Yost is asking the Court to prohibit the provision’s enforcement, at least in its application to Ohio.
“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.”