Michigan’s Supreme Court ordered last month that the state return $554 million it withheld between 2010 and 2012 from 275,000 school employees’ and retirees’ paychecks to pay for two years worth of retiree health care, according to the Associated Press.
The court unanimously ruled Dec. 20 that the state failed to show how the 2010 law that withheld the funds was “reasonable and necessary to further a legitimate public purpose,” and that the withholding “substantially impaired” school employees’ employment contracts by involuntarily reducing their wages.
The ruling upheld a 2016 judgement by the state appeals court that struck down the law created under Democratic Gov. Jennifer Granholm.
In the coming weeks, an educator in Michigan making $50,000 a year will receive approximately $3,000 plus interest.
The state has for years struggled with ways to pay down ballooning pension and retiree health care costs.
A version of this news article first appeared in the State EdWatch blog.