Supreme Court won’t hear Ohio’s challenge to pandemic relief money over tax cuts

The Supreme Court on Monday declined to take up a financial dispute brought by Ohio against the U.S. Treasury over COVID-19 pandemic relief funds.

The state argued it was forced to take more than $5 billion from the American Rescue Plan Act of 2021 — but that the money can’t be used to offset state tax revenue.

In total, the legislation gave roughly $195 billion to the states.

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Ohio argued the federal funds came with strings attached.

“One such string, the ‘Tax Mandate,’ prohibits States from using Rescue Plan funds to ‘directly or indirectly offset’ any ‘reduction in [their] net tax revenue’ caused by a tax cut,” the state argued in its filing. “Congress enacted the Mandate in hopes of pressuring States not to cut taxes.”

The feds said in their brief that Congress authorized the money to be used for “providing assistance to households, businesses and industries affected by the pandemic; providing premium pay to workers performing essential work during the pandemic; paying for state government services to the extent of revenue losses due to the pandemic; and making necessary investments in water, sewer or broadband infrastructure.”

The federal government also noted that in this dispute, the federal appeals court said the issue was moot, dismissing Ohio’s claim.

Lower courts have split on the matter, pushing Ohio to ask the high court to take up the legal dispute.

The court on Monday declined to do so. It would have taken at least four justices to hear the case.

The court did not issue a reason for denying the lawsuit, but noted Justice Brett M. Kavanaugh would have granted review.