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What to Know:

President Biden signed the American Rescue Plan Act (ARPA) into law last March. Included in this law was a provision preventing states from using ARPA funds to pay for tax relief.

In response, Governor Reynolds joined 12 other states in a lawsuit fighting back against this historic assault on the division of political power between the states and the federal government.

This week, a federal district court ruled in favor of a 13-state lawsuit prohibiting the Biden Administration from enforcing the terms of this brazen attempt to undermine states’ rights.

Response from Governor Reynolds:

“This is a major victory for the State of Iowa and Iowa taxpayers,” said Gov. Reynolds. “The Biden Administration was trying to punish fiscally responsible states like Iowa, which has a record budget surplus, and that’s why we took legal action.

With this ruling, Biden’s Administration can’t keep us from cutting taxes, and I look forward to doing just that.”

ITR’s Take:

With this dangerous Biden Administration policy defeated, lawmakers can now move forward with even greater confidence to deliver tax relief in the coming legislative session.

Iowa is on track to hold roughly $2 billion of excess taxpayer money at the end of the current fiscal year. Instead of government sitting on this massive stockpile of taxpayer money, these funds should be used for permanent, structural income tax relief.