In AFT Michigan v. State of Michigan, No. 148748 (Apr. 8, 2015), the Michigan Supreme Court upheld a state statute which mandated a 3% reduction in public school employees' salaries (to fund a failing school employee retiree health care system), and concluded it was not a taking because it was a voluntary giving by the employees. They were not required after all, to provide the 3% contribution, and could avoid the reduction and maintain their present salary levels by opting out of their own publicly-funded retirement health care.
There's a lot more to the statute and the unanimous opinion of course -- including a rejection of a Contracts Clause claim -- but the heart of the takings analysis starts on page 21:
Voluntary healthcare contributions do not violate Const 1963, art 10, § 2 and US Const, Ams V and XIV because, as a general proposition, the government does not, for constitutional purposes, "take" property that has been voluntary given. Here, the state is offering a retirement benefit-- publicly subsidized healthcare -- to public school employees who serve for the requisite period of time. The state is not obligated to provide such a benefit to any of its public school employees, but rather has made an affirmative decision to do so. It is therefore entirely reasonable for the state to request in turn that any eligible employee who desires access to this benefit should help to pay for it.Slip op. at 21-22 (footnote omitted).
The court also rejected an unconstitutional conditions claim (which "essentially disputes the Court of Appeals' conclusion that retiree healthcare contributions are made voluntarily"). Relying on Dolan, the court concluded the 3% option wasn't truly "coercive."
The state here is not coercing public school employees into giving up their rights under Const 1963, art 10, § 2 and US Const, Ams V and XIV, but is merely seeking, as a condition for receiving access to retiree healthcare benefits, the assistance of public school employees in paying for these benefits.
Slip op. at 30. Held: there's a nexus and proportionality.
A decision well worth reviewing in detail.
AFT Michigan v. State of Michigan, No. 148748 (Mich. Apr. 8, 2015)
