Battle erupts over using aid to cut taxes

Kansas Attorney General Derek Schmidt jumped on the lawsuit bandwagon of states taking legal action to challenge constitutionality of a federal economic stimulus law preventing states from indirectly using emergency funding to lower taxes.

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April 2, 2021 - 10:09 AM

TOPEKA — Kansas Attorney General Derek Schmidt jumped on the lawsuit bandwagon of states taking legal action to challenge constitutionality of a federal economic stimulus law preventing states from indirectly using emergency funding to lower taxes.

The action was timely because the House and Senate sent Democratic Gov. Laura Kelly a bill slashing state tax revenue by $285 million over a three-year period. The federal prohibition threatens the state’s authority to establish tax policy, the attorney general said.

Schmidt, who is a Republican candidate for governor in 2022, joined a dozen attorneys general in an Alabama lawsuit against the U.S. Treasury Department to erase action by Congress and President Joe Biden to restrain states from taking into account federal COVID-19 relief when making tax cuts.

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