AZ Wins in Court Challenge of Fund Restrictions
This came seems small, but it could set a big precedent for states’ sovereignty and freedom from the federal government’s control.
From The Center Square. A federal appellate court dealt President Joe Biden a loss Thursday, ruling that Arizona can challenge the administration’s rule prohibiting states from using COVID-19 funds to lower taxes.
Biden rallied support and passed the American Rescue Plan Act in March of last year. That law provided funding for states to fight COVID-19 and rebound from the economic consequences, among other things. However, the law included a “tax mandate” preventing states from lowering taxes if they accepted the federal funds.
As the law was enacted, Treasury Secretary Janet Yellen warned Arizona and 20 other states that the aid package forbids states from using it to reduce state tax burdens. Brnovich sued shortly after.
A lower court had ruled that the state did not have standing to make the challenge, but the appellate court disagreed…
“Here, Arizona alleged sufficiently concrete and particularized harms to its ability to exercise its sovereign prerogatives, intangible as those prerogatives may be,” the ruling said. “The quasi-contractual funding offer at issue here can be challenged by Arizona at the outset for offering conditions that are unconstitutionally ambiguous or coercive.”
Judge Ronald Gould said in the opinion that states have standing when an allegedly unconstitutional funding offer is made to them and don’t need to first violate a condition to have standing to challenge it….
“Specifically, Arizona contends that it was coerced into accepting the Offset Provision because of the size of the funds offered under ARPA and the fraught financial situation brought on by the pandemic,” the ruling said….
What do you think of this court case? Share your thoughts and prayers in the comments.
(Excerpt from The Center Square. Photo Credit: Canva)
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