Judge orders Mich. to stop wage collection plan

LANSING (AP) -- Michigan must stop collecting 3 percent of state employees' wages for retiree health care by April 1, but it can keep in an escrow account the money collected to date, an Ingham County judge has ruled.

The Lansing State Journal reports that Circuit Court Judge William Collette last Wednesday rejected the state's request to reverse his Feb. 22 ruling on behalf of state employees and directed it to cease collecting the money by April 1.

But Collette agreed to allow the state to keep the money it has collected since last fall -- roughly $27 million -- in an escrow account pending the state's appeal.

Gov. Rick Snyder's spokeswoman, Sara Wurfel, said the state will ask the Michigan Court of Appeals to stay the order to stop the salary contributions. She declined further comment to the State Journal.

In September, the Legislature passed a law authorizing the mandatory contributions for three years for retiree health care under an early retirement incentive package.

Several state employee unions, representing 28,000 employees, sued the state over the contribution requirement in November.

Last month, Collette ruled that the salary contributions were unconstitutional, saying lawmakers improperly tried to nullify a 3 percent wage increase for state workers this year.

Ray Holman, spokesman for United Auto Workers 6000, which represents nearly 17,000 social service caseworkers and administrative and other state employees, said union members are looking forward to getting a full paycheck after April 1.

Holman said employees are nonetheless disappointed that they won't immediately be refunded the money already deducted from their wages.

"We feel it's the membership's money. It's their wages," said Ken Moore, president of the Michigan State Employees Association, which represents nearly 4,300 employees in nearly every state department. "It's disappointing as a taxpayer that (the state) is going to continue to use the taxpayers' money to fight this in the courts."

Last year, then-Gov. Jennifer Granholm proposed the salary contributions along with retirement incentives as a reform designed to save $70 million or more annually.

In his February ruling, 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 had called that ruling "unfortunate," adding that asking workers to pay part of their retiree health care costs "is constitutional and the right thing to do."

The Marshall Republican also said that "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."

Published: Tue, Mar 15, 2011

Comments

  1. No comments
Sign in to post a comment »