Judge rules state can't nullify wage increase with fee

By Kathy Barks Hoffman Associated Press LANSING (AP) -- Michigan lawmakers can't compel state workers to pay 3 percent of their wages toward retiree health care to offset a pay increase that the Legislature was unable to block, an Ingham County judge said in a ruling released last Thursday. Circuit Court Judge William Collette said lawmakers put the retiree health care fee in place because they couldn't muster the two-thirds vote needed to nullify a contract containing a 3 percent raise for workers that went into effect last October. The Legislature "decided that it would wait and pass a bill by simple majority that, in effect, eliminated the wage increase. If this were allowed, it would basically read the two-thirds voting requirement out of the constitution," wrote Collette, who argued the law "is clearly unconstitutional." House Speaker Jase Bolger called the ruling "unfortunate," adding that asking workers to pay part of their retiree health care costs "is constitutional and the right thing to do." "The taxpayers of Michigan cannot afford to be as generous as they once were with public employee benefits and, therefore, those employees must help with the increasing financial burdens facing Michigan," the Marshall Republican said in a statement. "(I) stand by the Legislature's belief that dealing with issues of public employee retirement is well within our constitutional powers." Bolger added he'll support an appeal. The ruling came in a lawsuit brought by the American Federation of State, County and Municipal Employees Council 25, which argued the forced contribution from Oct. 1, 2010, through Sept. 30, 2013, violated the state constitution by nullifying labor contracts approved by the Michigan Civil Service Commission. Phil Thompson, executive vice president of Service Employees International Union 517M, said the judge's decision put "the law ahead of politics" and upheld the state constitution. "Today, our system of justice correctly affirms that the Civil Service Commission, not the Legislature, is the only body with the authority to make decisions on state employees' pay and benefits," Thompson said in a statement. The contribution would have taken $219.6 million from state employees over the three-year period. The state was to use 97 percent of the money to defray the state's cost of health care it provides to current retirees, while using 3 percent to prefund health care costs for current employees. Earlier this month, the Michigan Civil Service Commission decided that about 14,000 state workers who aren't represented by unions didn't have to continue contributing 3 percent toward retiree health care. However, the Michigan Department of Technology, Management and Budget said it would continue withholding the money. Republican Gov. Rick Snyder's administration has said it's unclear if the commission had the power to rescind the health care fund deductions. Snyder's spokeswoman didn't respond to a request for comment on Collette's decision by last Thursday evening. Public school teachers began paying 3 percent of their salaries toward retiree health care last July 1, although their payments were to continue indefinitely. That requirement also is being challenged in court, and the money collected so far is held in escrow. The 3 percent contribution was one of the sticks used to encourage thousands of teachers eligible for retirement to leave last summer and to encourage state workers eligible for retirement to leave before the end of 2010. Those who left didn't have to contribute the 3 percent toward retiree health care; those who stayed had to start paying in. Published: Mon, Feb 28, 2011