State leaders in two dozen states are considering using federal pandemic aid funding to potentially pay for state tax cuts. When the original American Rescue Plan $5 trillion in emergency funding was originally approved, the U.S. Treasury advised that nothing could stop states from using their own funds for tax cuts, so long as they could afford them. Yet many states have challenged this in several lawsuits in order to use the pandemic funds to pass along tax cuts. Experts and local advocates warn that not saving the funds and using them for its intended purpose could leave states vulnerable if a recession occurs. 

Source: Washington Post