CLEVELAND — Ohio’s attorney general is seeking to block a piece of the recently passed $1.9 trillion coronavirus relief package, arguing that it unlawfully restricts the state’s ability to reduce taxes.
In a court filing Wednesday seeking a preliminary injunction, Attorney General Dave Yost, a Republican, called the provision of the American Rescue Plan, which involves $350 billion tabbed for state and local governments in need of financial aid, unconstitutional.
Lawmakers added language to the $1.9 trillion stimulus — passed along party lines in the Democratic-controlled Congress and signed into law by President Joe Biden — to prevent states from using the funds to offset tax cuts. Yost said the stipulation would hinder Ohio’s ability to collect and keep an expected $5.5 billion in funding.
“It’s a blatant violation of federalism,” Yost said in a telephone interview with NBC News. “Congress is without authority to enact this kind of law.”
Yost offered as an example a situation in which the state’s tax commissioner might be evaluating a tax dispute involving a major employer.
“Let’s say we’re talking about an Amazon or an auto parts manufacturer — something that’s got a lot of other players that are similarly situated,” he said. “Under this provision in the Covid bill, he would not be free to decide that question in a way that reduced Ohio’s tax revenue.”
Yost’s suit came a day after 21 other Republican state attorneys general threatened legal action against the relief package. He said he made the decision to sue without consulting with Ohio’s Republican governor, Mike DeWine, but did inform Lt. Gov. Jon Husted before filing.
Biden is scheduled to visit Ohio next week as part of a cross-country tour to promote the bill.