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A federal judge on Wednesday ruled against an effort by Ohio’s Republican attorney general to temporarily block a provision of President Biden‘s coronavirus relief law that forbids states from using federal aid to offset any future tax cuts.
“The bottom line is this – preliminary injunction that stands no meaningful prospect of ever being enforced, as the Secretary is unlikely to be in a position to recoup funds while this suit is pending, adds nothing by way of clarity,” District Court Judge Douglas Cole wrote.
“Thus, while the Court finds that irreparable harm likely exists, the requested preliminary injunction does not avoid that harm,” the judge said.
Ohio Attorney General David Yost filed the lawsuit in March against Treasury Secretary Janet Yellen arguing that offering states federal aid on the condition that they not use it to offset tax cuts is unconstitutional. After Yost’s lawsuit, a group of 21 Republican state attorneys general wrote to Yellen about the provision.
Earlier this week, the Treasury Department, released regulations detailing how the law would be handled. States would be in violation of the tax mandate if the “recipient government could not identify sufficient funds from sources other than the Fiscal Recovery Funds to offset the reduction in net tax revenue.”
Yost replied to the judge’s order on Wednesday with a motion to expedite the remaining court proceedings.
“The trial court here agreed with our core argument: the federal government does not have the right to tell the states what to do with its tax policy,” Yost said. “Imagine if a conservative federal government required states to reduce taxes as a condition for receiving emergency funding. We look forward to a final judgment.”
Yost is seeking a final decision in the case by June 4.
