State employees win case over health care cash

LANSING (AP) -- Michigan lawmakers acted illegally when they agreed to take 3 percent from the pay of government employees and earmark it for retirees' health care, the state appeals court said last Friday.

The court said lawmakers in 2010 simply were trying to fill a budget hole when they couldn't muster enough votes to kill 3 percent raises for state employees.

A three-judge panel said the move violated the Michigan Constitution and trampled the work of the Civil Service Commission, which had approved the raises in contracts with union-covered employees.

"The people can and should expect shared sacrifice; however, it cannot come at the expense of constitutional nullification, and the Legislature cannot expect to balance the budget on the backs of state workers," said judges Karen Fort Hood, Jane Beckering and Cynthia Diane Stephens.

The court agreed with an earlier decision by an Ingham County judge.

Lawmakers, joined by then-Gov. Jennifer Granholm, decided to collect more than $200 million over a three-year period, starting last fall. Ninety-seven percent of the money would help pay for health care for current retirees.

In February, the Civil Service Commission said 14,000 state workers who aren't represented by unions didn't have to pay the 3 percent charge. The Department of Technology, Management and Budget, however, said it would continue withholding the money.

The attorney general's office was reviewing the court decision for a possible appeal to the Supreme Court. There are new efforts in the Legislature to come up with another way to get money from state employees, but no bill has passed.

In April, a similar 3 percent charge to be paid by public school employees was struck down by an Ingham County judge, who said they would be paying into a health system with no assurance of receiving benefits. An appeal is pending.

Published: Tue, Aug 30, 2011