A battle over pensions for state workers hit the courtroom Wednesday.
A coalition of public employees is suing the state. They're upset that some workers are being required to pay four percent toward their pensions or move into a 401-K program.
An Ingham County Circuit Court judge listened to attorneys for both sides and is planning to issue a written opinion soon. The arguments all boil down to a small section of the state constitution, Article XI section 5, regarding the Civil Service Commission.
Workers say it bars the legislature from taking any action that regulates compensation, including pension plans. The state says that's not the case.
"If you're changing the rules halfway through the game it's unfair," Ray Holman with UAW Local 6000 said. "You know in Michigan we bargain for our wages and benefits and it's approved by the Civil Service, the Governor and legislature can not cut our pay."
In December 2011, lawmakers passed a measure requiring public employees hired before 1997 to pay four percent for their pension plans or move into a defined benefit plan, the type of system all newer employees have.
"What the legislature was seeking to do is ensure that there would be enough money to make everything work well," State Senator Rick Jones, R-Grand Ledge explained. Jones says something needed to be done, but he voted against the measure, concerned about its constitutionality.
According to a House Fiscal Analysis, the change will save the state $28 million in the first year.
While workers argue only the Civil Service Commission can make such a change, the state told the judge it believes, under the constitution, the legislature has the power to pass laws for the general good.
"Really it's not a choice, really it's another slick way to cut our pay," Holman countered.
Michigan workers were successful in a similar case last year. In it, an appeals court ruled lawmakers overstepped their authority when they forced all public employees to pay three percent for retiree health care.
Unions say this case is one in the same. The state argues it's different because employees have the option to choose.
"Here's the problem, if the courts do change this and the employees don't pay four percent in there will have to be repercussions," Jones said. "I would assume we would have to look at having less state employees because if we don't have the money we will need to make cuts somewhere."
Both sides are expecting a prompt ruling. If the judge rules in favor of public workers, it will likely mean back pay. Employees who've opted to stick with their pension plans have been paying the added four percent since April.