Judge rules KS, other states, can use COVID relief for tax cuts

By the Associated Press

A federal judge has blocked the U.S. Treasury from enforcing a provision of the American Rescue Plan that prohibited states from using the pandemic relief funds to offset new tax cuts.

U.S. District Judge L. Scott Coogler ruled Monday that Congress’s exceeded its power under the Constitution in putting the so-called tax mandate on states. Thirteen states had filed a lawsuit in federal court in Alabama challenging the provision of the pandemic relief package.

The American Rescue Plan steered $200 billion in relief funds to states but specified that states could not use it as a means to cut taxes and then use the federal relief dollars to offset the revenue reduction.