State employees’ retiree health care deduction unconstitutional

The 3 percent deduction—or pay cut—state  employees pay for their retiree health care is unconstitutional according to the state Court of Appeals. Affirming a lower court decision, the court ruled that the deduction bypassed the state Civil Service Commission which has jurisdiction over state employees.

The Court said, “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.” 

A similar lawsuit challenging the 3 percent pay cut for teachers was also struck down by a lower court and the case is pending in the Court of Appeals. Hopefully, teachers will receive the same favorable judgment.

In both cases, the money continues to be deducted from employee paychecks and is placed in escrow funds. The money continues to be deducted from teacher paychecks and remains in an escrow fund totaling $235 million. The state employee escrow fund stands at $59 million.