President Biden signed the American Rescue Plan Act of 2021 (ARPA) shortly after it was passed in Congress on March 11. Although the plan is overwhelmingly popular with the American people, there is one small provision in the legislation that creates some uncertainty and concern in Nebraska.
Under the ARPA, states can receive a share of US $ 219.8 billion in aid.
Aside from arguments about the amount of money, on page 579 of the bill, a condition is placed on states if they choose to accept the money:
“A state or territory may not use the funds to directly or indirectly offset a reduction in that state’s net tax revenue that reduces a tax (by providing a reduction in the tax rate, a discount, a deduction or a credit, or otherwise)”
As written, this determination is somewhat vague and raises more questions than answers. ARPA instructs the Treasury Department to interpret and implement the meaning of this provision, which must be published within 60 days. The Platte Institute is one of many groups across the country concerned that this broad legal language could be implemented in a way that would unconstitutionally bind Nebraska lawmakers in their work to create and implement tax and spending plans for our state.
Article I of the US Constitution gives Congress extensive powers to collect taxes and spend money for the common good. However, this broad authority must be read in the light of our federal system of government, which has reserved all other powers to states and the people under Amendment 10, which reads: “The powers that the Constitution does not delegate to or from the United States were forbidden to the states, are reserved for the states or the people. “