Pay Cuts in Question in Michigan, Illinois

By: - August 31, 2011 12:00 am

The Michigan Court of Appeals has ruled that pay cuts ordered in 2010 by the legislature and former Governor Jennifer Granholm violated the state Constitution because they were not approved by the independent Civil Service Commission.
Now, Governor Rick Snyder’s administration has to decide whether to appeal the case to the Michigan Supreme Court or to pay 50,000 state workers $59 million in wages withheld since last fall, reports the Detroit Free Press . The 3 percent cuts in pay were used to cover retiree health care benefits.
The decision argues that legislature and the governor do not have the authority to cut pay without approval from the Civil Service Commission even if the money saved is put toward a particular purpose, such as an unfunded liability in retiree health care expenses.
Meanwhile in neighboring Illinois, Governor Pat Quinn has been embroiled in a series of court battles with state workers over his authority to cut pay.
A county circuit court on Friday upheld the governor’s authority to withhold pay altogether for the state’s 44 regional school superintendents, reports the Associated Press . The governor vetoed $10 million in salaries for the superintendents, arguing that local governments could pick up the tab. The superintendents, whose roles are required under state law, have continued to work without pay since July 1. The legislature reconvenes in October and may choose to reinstate funding at that time.
In another set of cases that are working their way through the state and federal court systems, Governor Quinn’s decision to withhold pay raises negotiated with unions is under issue. Quinn argues that the legislature failed to appropriate adequate funds to cover the salary increases, but an arbitrator ruled that the administration was bound by the contract agreement. The raises are still on hold while the case works its way through the courts. The state’s largest union, AFSCME, has also filed a similar case against the state in federal court challenging the decision to withhold the promised raises.

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Melissa Maynard

Melissa Maynard oversees the Pew state fiscal health project’s Fiscal 50 online resource, which helps policymakers understand fiscal, economic, and demographic trends affecting their states by tracking tax revenue, reserves, employment rates, Medicaid spending, and other issues important to long-term fiscal health.