Tucked into the American Rescue Act signed into law recently is a requirement that says states that accept aid are restricted from cutting taxes through 2024. Attorney General Jeff Landry joined other Republican AG’s in opposing the tax cut limitation. Solicitor General Liz Murrill says because the Act is already law…
“We’re going to have to probably file a lawsuit if we want to get an injunction to stop that section of the law from becoming applicable,” said Murrill.
350 billion dollars of the 1.9 trillion dollar plan was set aside specifically as assistance for states.
Murrill says the mandate is unlawful and unconstitutional.
“We’ve never seen those kinds of conditions placed on federal money before where we tie the hands of our Legislature,” said Murrill.
Per the AG’s office, the wording of the stimulus bill forbids states from using COVID-19 relief funds to “directly or indirectly offset a reduction in net tax revenues.” 21 AG’s signed onto a letter sent to the Treasury Secretary opposing the language and asking for regulatory intervention removing it.
Governor Edwards says he has no problem with the requirement, and it doesn’t change any of his plans. He says he’s committed to pursuing tax reform, but only if it is revenue-neutral.
“So we don’t create a structural budget-deficit like the one that I inherited when I became governor,” said Edwards.
The Governor has unilateral authority to accept or reject the federal funds, and the mandates that come with them.
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