NASHVILLE – A federal judge has ruled that Tennessee and Kentucky officials are free to disregard provisions in a congressional coronavirus-related spending measure that bar states from using the money to allow for tax cuts.
In his permanent injunction issued last week, Judge Gregory Van Tatenhove with the Eastern District of Kentucky ordered the federal government to back off the prohibition on tax cuts as a way to spend the $1.9 trillion in government relief amid the pandemic.
Congress passed the American Rescue Plan Act in March with no Republican support. The legislation designated nearly $200 billion for states.
Van Tatenhove wrote the federal mandate amounted to “undue influence” over the states’ tax policy in exchange for accepting the relief funds.
“This is a coercive grant of federal money. The spending power of the federal government does not go so far. The price for accepting these funds is unconstitutional,” Van Tatenhove opined as he instituted a permanent injunction against enforcement of the provision in both states.