Montana Attorney General Austin Knudsen this week announced that the state will join 13 others in filing a lawsuit to protect the well-established authority of states to lower taxes for their citizens from being violated by the ‘American Rescue Plan Act of 2021’.

“ARPA, the American Rescue Plan Act is the big stimulus money that the federal government is sending out to all the states,” said Knudsen. “It’s a huge amount of money and Montana got just shy of $3 billion, but here's the catch. The fed is telling us that you can't lower taxes if you take this money, and that's blatantly unconstitutional. You don't get to tell the individual states that they can or cannot raise taxes and then hold us hostage with federal money, so that's what we've sued over.”

Knudsen emphasized the fact that after the last election Montana is a conservative state, run by Republicans.

“We’ve got republican control right now,” he said. “We have a Republican legislature and Governor Gianforte, a Republican, is in the governor's office. We want to be fiscally conservative. We want to cut taxes. We want to get money in the pockets of Montana citizens. So when you when you send us a bunch of federal money, and then tell us you can't lower taxes, what you are in effect telling the state of Montana is that you must grow government, and here's a bunch of free money to do it.”

Knudsen says he believes that Montana’s senior Democratic Senator Jon Tester does not share Montana’s fiscal values.

“Senator Tester, I think, is neck deep in this,” he said. “Unfortunately he's involved with a lot of the rulemaking on these ARPA funds and we don't have any federal guidance yet. They sent all the money out and they said, ‘well, standby, we're going to give you some guidance on what you can and can't do with it’.”

Knudsen also said that he believes Senator Tester may be at least in part behind the administration’s plan for ARPA.

“They've sent some of those out and unfortunately Senator Tester’s in the middle of that process, and he's got fingerprints on this rule that says we can't touch state taxes,” he said. “So I place the blame squarely on the on the Biden administration and unfortunately on our own Senator Tester.”

Tester provided some input on the ARPA funds when he recently visited Great Falls. Read his comments here.

The attorneys general seek a court order that prohibits enforcement of the federal tax mandate and declares it unconstitutional. In addition to Montana, Alabama, Alaska, Arkansas, Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota, Utah, and West Virginia are plaintiffs in the lawsuit.


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