GOP AGs threaten suit over $tim use

Republican attorneys general in 21 states are threatening to sue the Biden administration over a provision in the $1.9 trillion coronavirus stimulus package that they say prohibits them from using the funds to offset tax-revenue reductions.

In a letter to Treasury Secretary Janet Yellen on Monday, the AGs ask her to assure them that “certain provisions of the [program] do not attempt to strip states of their core sovereign authority to enact and implement basic tax policy.”

They say the prohibition is “unclear, but potentially breathtaking” and prevents them from using any of the $350 billion being distributed to state and local governments “to either directly or indirectly offset a reduction in the net tax revenue.”

The Republicans, led by the attorneys general of Arizona, Georgia and West Virginia, said the “language” could be read to “deny states the ability to cut taxes in any manner whatsoever — even if they would have provided such tax relief with or without the prospect of COVID-19 relief funds.”

“Absent a more sensible interpretation from your department, this provision would amount to an unprecedented and unconstitutional intrusion on the separate sovereignty of the states,” the letter said.

It asked Yellen to confirm that the stimulus plan doesn’t forbid states from providing tax relief.

“In the absence of such an assurance by March 23, we will take appropriate additional action to ensure that our states have the clarity and assurance necessary to provide for our citizens’ welfare through enacting and implementing sensible tax policies, including tax relief,” the letter said.