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Could Federal COVID-19 Relief Affect State Tax Policy?

By Mark Brodie
Published: Monday, March 22, 2021 - 12:57pm

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Arizona is set to get billions of dollars from the federal government as part of the American Rescue Plan Act. According to numbers from legislative budget analysts, the state could see as much as $12 billion, including direct payments to residents, as well as money to the state, cities and counties and other entities. But one provision of the federal law has some people concerned.

Arizona Attorney General Mark Brnovich and other Republican AGs have sent a letter, asking the U.S. Treasury Department for clarification about language that they worry could prevent states that accept the federal cash from then implementing tax cuts.

The AGs say the provision could amount to “an unprecedented and unconstitutional intrusion on the separate sovereignty of the States,” which would represent “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.” 

The Show heard from two perspectives on this, starting with Chad Heinrich.

Heinrich is the Arizona state director for the National Federation of Independent Business, which is supportive of the AGs' efforts.

David Lujan is director of the Arizona Center for Economic Progress, who sees a legal question in the AGs' move.

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