Will you get a refund of your 3 percent? Supreme Court will decide
It will have to be the courts again to ultimately decide whether the Legislature has overstepped its bounds when it comes to school employees and their retirement benefits. Gov. Snyder is appealing a recent Michigan Court of Appeals decision that the 3 percent “tax” on employees for their retiree health care is unconstitutional.
Claiming that his signing of SB 1040 (PA 300) yesterday into law undercuts the Court of Appeals’ decision, Snyder announced that the state will be appealing the ruling to the Michigan Supreme Court. Before PA 300, the state collected more than $500 million from school employees who were paying 3 percent of their salary for the post-retirement benefit. But there was no guarantee that the money would be available for that purpose.
PA 300 does not include such a guarantee either. However, it does include an opt-out clause so employees could move to a 401(k) plan instead of continuing to pay the 3 percent.
Along with the issue of constitutionality, whether or not school employees will receive a refund also has to be decided. The money has been held in escrow.
Election 2012 is fast approaching. We’re not only voting for the leader of our country and candidates for state offices, we’re also choosing Supreme Court justices. And if laws attacking school employees will ultimately be decided in the courts, our votes carry great importance for us as school employees.