Kentucky Attorney General Daniel Cameron joined 20 other state attorneys general in calling on the U.S. Treasury Department to make sure the most recent COVID-19 relief package cannot undermine states’ tax policies.

The attorneys general sent a letter to Treasury Secretary Janet Yellen earlier this week raising concerns about portions of the $1.9 trillion American Rescue Plan Act. The officials state sections of the law preclude states from using federal funds from the bill to offset a reduction in tax revenues.

Cameron said in a statement the language could be interpreted to keep states from cutting taxes, even if they would have provided relief regardless of whether the state received COVID-19 relief funding.

In Kentucky, Cameron fears that could jeopardize a tax-increment financing plan to transform the Russell neighborhood in Louisville’s West End. Under part of the plan proposed by state lawmakers, residents in the predominantly Black community would pay property taxes for the next 30 years based on the assessed value from this year. Additionally, a housing developer can defer up to 80 percent of annual property taxes up to $7.6 million to help cover construction costs.

“Just as federal lawmakers have the ability to enact federal tax policies that benefit communities, like opportunity zones, Kentucky’s lawmakers should be able to do the same with state policies,” Cameron said. “We cannot afford to have our hands tied by federal overreach simply because we accept COVID relief funds.”

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