School and Local Government

School 3 Percent Case Headed to Supreme Court

On Thursday, June 1, 2017, the Michigan Supreme Court granted the State’s application for leave to appeal of a 2016 Court of Appeals ruling that stated that Public Act 75 of 2010, which mandated that school districts withhold 3 percent of an employee’s wages for retiree health care coverage was unconstitutional.

In 2016, the state Court of Appeals had ruled that the involuntary deductions from school employees’ paychecks violated state and federal constitutional protections against the taking of private property without compensation, due process, and impairment of contracts.

The money at issue was collected between 2010-12 and has been saved in an escrow account pending the final outcome of the lawsuit.  In 2012, the deductions were continued under a replacement law that was deemed constitutional by the court system.

No schedule has been set for hearing the case.  We will keep you updated on this case as it unfolds.

Comments Off on School 3 Percent Case Headed to Supreme Court