|MICHIGAN — AFT Michigan released the following statement following Governor Rick Snyder’s announcement that he intends to appeal, without the help of the Attorney General, the Court of Appeals decision that found unconstitutional a 2010 law requiring public school employees to pay 3 percent of their wages for retiree health care without being guaranteed they would receive that benefit. The ruling means educators who paid this 3 percent into the retirement fund from 2010 to 2013 will see the money returned to them with interest if the ruling stands.
“The Court of Appeals got this case right. The payroll deductions were hard earned wages and requiring payment and no guarantee of the benefit is unconstitutional. We are confident that the Michigan Supreme Court will rule in our favor,” said David Hecker, president of AFT Michigan. “Governor Snyder’s decision to drag this case out, even though the Attorney General will not assist in the appeal, is a shameful use of the people’s time and money. School employees deserve to have their hard earned money returned to them as soon as possible, but instead they will have to wait as Governor Snyder spends more time defending what is clearly an unconstitutional law.”
Background to the Case:
In July, 2010, the Michigan Legislature required every public school employee to pay 3% of their compensation to the School Employees Retirement Fund to pay for the post employment retiree health care of persons then retired. While employees were required to pay to fund this benefit for others, they, themselves, had no assurance that they would, in turn be entitled to health care when they retire.
AFT Michigan sued the State of Michigan challenging this involuntary extraction from wages to pay for health care of others without any promise of a similar benefit to those now paying. The Federation won in the Court of Claims and the Court of Appeals and the case moved to the Supreme Court.
While the case was pending, in 2012 the Legislature — anticipating that the 2010 law would be invalidated — adopted a new statute. The new law made contributions to retiree health care voluntary. Other provisions of the law imposed new economic burdens on public school employees but not directly related to retiree health care. The Federation challenged this law, too, but did not prevail.
After the adverse decision on the 2012 statute, the Supreme Court directed the Court of Appeals to reconsider its decision on the 2010 statute. That Court issued its decision on June 7th. The decision applies to the forced contributions between July 1, 2010 and January 9, 2013.
Today, the Snyder administration announced it would appeal the Court of Appeals decision to the Michigan Supreme Court.