The Michigan Supreme Court agreed on Wednesday to issue an advisory opinion on whether the new tax on pensions, passed by the legislature and signed into law by Gov. Snyder, is allowed under the state constitution.
Both Gov. Snyder and the legislative leadership asked the state’s highest court to rule on the matter, which avoids having to wait as long as two or three years for the legal challenge to the new law, which has already been filed, to work its way up the judicial ladder.
The court granted the request and set a date of Sep. 7 for oral arguments. It also directed Attorney General Bill Schuette to file briefs in the case within 56 days and invited all groups or individuals with an interest in the outcome of the case to file amicus briefs on both sides of the dispute.
Article 9, Section 24 of the Michigan Constitution states:
“The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.”
“Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.”
The question for the court is whether taxing public employee pension plans violates that language.