After President Biden and Congressional Democrats passed the American Rescue Plan, sending $350 billion to local and state governments, 21 Republican attorneys general are repaying the favor by threatening to sue the Biden administration over the relief legislation. Despite the fact that states have been forced to lay off over one million employees — including essential workers like frontline healthcare workers and first responders — they want the right to use their COVID relief funding to give tax cuts to the wealthy and corporations instead of bringing back lost jobs.
Here are the facts:
21 Republican attorneys general want the right to use their American Rescue Plan funds to give tax cuts to the wealthy and corporations instead of keeping essential workers on the job.
- 21 Republican Attorneys General Wrote A Letter To The Biden Administration Taking Issue With An ARP Restriction On Using Federal Funds To Offset A Reduction In Tax Revenue Due To Tax Cuts. “Twenty-one Republican attorneys general pressed the Biden administration on Tuesday to clarify a provision in the $1.9 trillion economic aid package that the president signed into law last week, warning that its restrictions on state efforts to cut taxes could be ‘the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.’ The seven-page letter was signed by a host of Republican officials, including the attorneys general of Texas, Arizona, Georgia and Utah. They take issue with a restriction that lawmakers included in a $350 billion relief effort for state, local and tribal governments that prevents them from using the federal funds ‘to either directly or indirectly offset a reduction in the net tax revenue’ as a result of tax cuts. These governments have suffered revenue hits and laid off more than a million public employees during the coronavirus pandemic.” [New York Times, 3/16/21]
- Some State Officials Are Already Discussing A Lawsuit Due To The Provision Against Tax Cuts. “The attorneys general from Arizona, Georgia, West Virginia and 18 other states called on the Biden administration to make it clear that they can proceed with some of their plans to cut taxes, including those that predate the stimulus, in a seven-page missive sent to Treasury Secretary Janet Yellen on Tuesday. Otherwise, they said, the relief law ‘would represent the greatest invasion of state sovereignty by Congress in the history of our Republic’ — and they threatened to take ‘appropriate additional action’ in response. Some state officials are already discussing a possible lawsuit, according to a person familiar with the matter who was not authorized to discuss the private deliberations.” [Washington Post, 3/16/21]
Meanwhile, state and local governments have lost 1.3 million jobs since the pandemic began, making total employment among that group the lowest it has been since 2001.
- State And Local Governments Have Shed 1.3 Million Jobs Since The Pandemic Began. “In securing the funds, the White House and members of Congress sought to blunt the impact of significant revenue shortfalls in cities, counties and more than half of all U.S. states. State and local governments have shed 1.3 million jobs since the pandemic began last year — a loss of more than 1 in 20 government positions, according to a Washington Post analysis of employment data.” [Washington Post, 3/16/21]
- State And Local Government Employment Has Not Been This Low Since 2001. “State and local governments, many anticipating the worst, have already taken steps to slim their budgets, namely by instituting layoffs, furloughs and hiring freezes of government workers. About 1.3m jobs in state and local governments have been cut since March, and it is unclear when and if those jobs will be coming back. State and local government employment has not been this low since 2001.” [The Guardian, 1/13/21]
These public sector employees include frontline health care workers, teachers, first responders, transportation workers, and other essential workers.
- State And Local Governments Set The Budgets For Police And Fire Departments, Public Schools, Health Departments, And Other Essential Workers. “State and local governments set the budgets for local police and fire departments, public schools, health departments, road constructions and repair, public transportation and many other essential public services. How each state, city or town gets revenue varies widely, though it ultimately is some combination of income, sales and property taxes. No matter what the combination, when the economy is hurting – people are unemployed and are buying less and businesses are closing – state and local governments can take a huge hit.” [The Guardian, 1/13/21]
- Education Workers Have Been Particularly Hit By Budget Shortfalls, With Employment Being Down In Public Education In Nearly Every State. “This will prove particularly important for public education, which has received the brunt of state and local government layoffs during the pandemic. Employment is down in public education in nearly every state compared to 2019, according to an analysis from Pew Charitable Trusts.”[The Guardian, 1/13/21]
And the Republican attorney general signatories have seen the pandemic cause over 400,000 public sector employees to lose their jobs in their states alone.
- The 21 Attorneys General Who Signed Onto The Letter Saw Their States Lose Over 415,000 Public Sector Jobs From February 2020 To June 2020. [Economic Policy Institute, 7/29/20]
- The Attorneys General Were From Arizona, Georgia, West Virginia, Alabama, Arkansas, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas, Utah And Wyoming. “Republican attorneys general from 21 states are questioning a provision in the $1.9 trillion pandemic rescue plan that bars states from using its funds to offset tax cuts.[…] Signing on to the letter were Arizona, Georgia, West Virginia, Alabama, Arkansas, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas, Utah and Wyoming.” [Associated Press, 3/16/21]
- Texas Lost 112,000 Public Sector Jobs From February 2020 To June 2020. According to the Economic Policy Institute, Texas lost 112,000 public sector jobs from February 2020 to June 2020. [Economic Policy Institute, 7/29/20]
- Missouri Lost 29,000 Public Sector Jobs From February 2020 To June 2020. According to the Economic Policy Institute, Missouri lost 29,000 public sector jobs from February 2020 to June 2020. [Economic Policy Institute, 7/29/20]
- Kentucky Lost 28,200 Public Sector Jobs From February 2020 To June 2020. According to the Economic Policy Institute, Kentucky lost 28,200 public sector jobs from February 2020 to June 2020. [Economic Policy Institute, 7/29/20]
- Indiana Lost 25,400 Public Sector Jobs From February 2020 To June 2020. According to the Economic Policy Institute, Indiana lost 25,400 public sector jobs from February 2020 to June 2020. [Economic Policy Institute, 7/29/20]
- Georgia Lost 25,400 Public Sector Jobs From February 2020 To June 2020. According to the Economic Policy Institute, Georgia lost 25,400 public sector jobs from February 2020 to June 2020. [Economic Policy Institute, 7/29/20]
And the majority of these states have seen their tax revenue decline significantly in the past year.
- West Virginia, Arkansas, Florida, Indiana, Kansas, Louisiana, Missouri, Montana, Oklahoma, Texas, And Wyoming Saw Their Tax Revenue Fall During The Pandemic. According to the New York Times, West Virginia, Arkansas, Florida, Indiana, Kansas, Louisiana, Missouri, Montana, Oklahoma, Texas, and Wyoming all saw their state tax revenue decline during the “pandemic period.” [New York Times, 3/1/21]
- Florida Lost 11.3 Percent In Tax Revenue During The Pandemic Period. According to the New York Times, Florida lost 11.3 percent in tax revenue from April 2020 to December 2020. [New York Times, 3/1/21]
- Texas Lost 10.4 Percent In Tax Revenue During The Pandemic Period. According to the New York Times, Texas lost 10.4 percent in tax revenue from April 2020 to December 2020. [New York Times, 3/1/21]
- Wyoming Lost 8.5 Percent In Tax Revenue During The Pandemic Period. According to the New York Times, Wyoming lost 8.5 percent in tax revenue from April 2020 to December 2020. [New York Times, 3/1/21]
- Louisiana Lost 7.5 Percent In Tax Revenue During The Pandemic Period. According to the New York Times, Louisiana lost 7.5 percent in tax revenue from April 2020 to December 2020. [New York Times, 3/1/21]
- Montana Lost 5.6 Percent In Tax Revenue During The Pandemic Period. According to the New York Times, Montana lost 5.6 percent in tax revenue from April 2020 to December 2020. [New York Times, 3/1/21]