Judge rules unconstitutional forcing state workers to pay retiree health care

Lansing— An Ingham County judge has struck down a law requiring state employees to put 3 percent of their paychecks toward the cost of retiree health care.

Circuit Judge William Collette ruled that when the Legislature failed to get a two-thirds majority to reject a 3 percent state employee pay increase negotiated by the administration of former Gov. Jennifer Granholm, it found a back-door way to take back the increase with a simple majority vote by requiring the contributions to a retiree health care fund, according to his opinion.

.In so doing, the Legislature exceeded its authority under Michigan's Constitution, which says the Michigan Civil Service Commission is responsible for state employee compensation, Collette ruled.

"We're thrilled that our argument was validated by the court," said Ray Holman, legislative liaison for the United Auto Workers Local 6000, who received a copy of Collette's opinion today.

The law was passed by the Legislature and signed by Granholm last year.

But the 3 percent deduction — which was immediately challenged by several state employee unions — was never approved by the Civil Service Commission.

The deductions — which would amount to more than $75 million a year — have been going into an escrow account until the legal dispute is resolved.

Earlier this month, the Civil Service Commission voted to stop taking the 3 percent deduction from the state's 14,000 nonunion employees.

But the administration of Gov. Rick Snyder said they would follow the law, not the commission order, and told officials the deductions should continue.

Kurt Weiss, a spokesman for the Department of Technology, Management and Budget, said officials are reviewing the opinion, but "we expect an appeal."

For now, the state will continue making the deductions and will not move the $24 million in the escrow fund, Weiss said. Another $120 million is in a similar 3 percent escrow fund for school employees that was not affected by the judge's opinion, Weiss said.

House Speaker Jase Bolger, R-Marshall, issued a statement describing the ruling as "not entirely unexpected but … unfortunate."

Bolger said he supports an appeal. "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," he said.

Georgi-Ann Bargamian, an official with the UAW in Detroit, said the unions will ask Collette to order that the deductions stop immediately and the escrow fund be turned over to employee representatives.