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, said the provision of the American Rescue Plan, which involves $350 billion tabbed for state and local governments in need of financial aid, is unconstitutional.
Lawmakers added language to the $1.9 trillion measure — which was passed along party lines in the Democratic-controlled Congress and signed into law by President Joe Biden — to prevent states from using the money to offset tax cuts. Yost said the stipulation would hinder Ohio’s ability to collect and keep an expected $5.5 billion.
“It’s a blatant violation of federalism,” Yost said in a telephone interview. “Congress is without authority to enact this kind of law.”
Yost offered an example 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.”
Twenty-one other Republican state attorneys general threatened legal action against the relief package Tuesday. Yost said that he decided to sue without consulting with Ohio’s Republican governor, Mike DeWine, but that he 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 law.