BY RICK PLUTA
Michigan Public Radio Network
A class-action lawsuit has been filed on behalf of retired public employees against the state for extending Michigan's income tax to pensions. The lawsuit claims the state broke a promise made in writing to retirees.
The lead plaintiff is a retired school teacher who said state-managed pension funds for teachers and state employees made the promise in their official guidelines and tax information forms. It said the Legislature and Governor Rick Snyder broke that promise by adopting a law that treats pensions like any other income for people born after 1945. The pension tax went into effect last year. The lawsuit said retirees made financial plans based on the state's promise.
The Michigan Supreme Court ruled in 2011 that the pension tax does not violate the state constitution's protections against breaking contracts. But the retirees said that does not rule out a non-constitutional court challenge.
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