The COVID-19 pandemic has upended the lives of billions of people across the globe. State governments faced unprecedented challenges over the past 14 months. Businesses, small and large, were shut down; medical professionals and facilities were stretched beyond limits; and most significantly, many lives were lost. Reactions by governments were mixed—some beneficial, others not.

Congress passed the American Rescue Plan Act (ARPA) earlier this year, which allocated approximately $200 billion to assist state governments with COVID-19 relief efforts. It provided much needed relief, but it also intruded on state sovereignty by enacting an unconstitutional tax mandate. This mandate allows the federal government to dictate state tax and spending policy, forcing states to choose between federal aid and compliance with federal policy preferences. A state may only get COVID-19 relief funds if it promises not to lower taxes on its residents for four years.

Challenges to federalism survived the pandemic, to no one’s surprise. John Adams wrote to Thomas Jefferson, “I say, that Power must never be trusted without a check.” Often it is a state’s attorney general who must provide the check on federal overreach.

Tennessee, with our neighbors in Kentucky, has challenged the ARPA’s tax mandate as an unconstitutional exercise of congressional power. Ohio, Arizona, Missouri, and West Virginia have filed similar challenges. States are once again showing that they have the determination to defend core principles of federalism.

The arguments against the ARPA’s tax mandate are relatively simple. First, we argue the mandate is unconstitutionally ambiguous, in violation of the Spending Clause, because it leaves states with little more than luck and the discretion of federal agencies to determine if they comply with the new law. A state may not use the funds to, directly or indirectly, offset a reduction in its net tax revenue. What does that mean? Second, we argue the mandate violates the Spending Clause by imposing unconstitutionally irrelevant conditions on accepting aid by connecting eligibility to federal policy preferences on taxes and spending. Finally, we argue the mandate is a coercive condition, demanding that Tennessee fall in line with federal policy preferences or risk losing the financial aid, which can amount to as much as one-fifth of a state’s general tax revenue.

Recently, the Treasury Department released its interim final rule to implement the ARPA, including the tax mandate. These regulations, however, do not resolve the allegations in our complaint. If anything, they further confuse the basis for determining if a state is complying with the Act’s requirements. An unconstitutional law cannot be fixed through the regulatory process.

In short, Congress used the COVID-19 crisis as an opportunity to handcuff states and demand that they enact the federal government’s preferred taxing policies. This litigation challenges a specific statute, yes, but it is also another effort by attorneys general to maintain the system of checks and balances between the states and the federal government contemplated by our founders.