Michigan Public Pensions Can Be Taxed

Gov. Rick Snyder’s (R) plan to tax public pension plan and other retirement income is for the most part constitutional, and the provision that is not—determining eligibility for exemptions and deductions on the basis of household resources—can be “severed from the remainder of the act,” the Michigan Supreme Court ruled Nov. 18. Snyder had asked the Supreme Court for its opinion on the matter after the Michigan State Employee Retirees Association said it would sue over the plan. The retiree group contended that pension plans of the state and its agencies are contractual obligations that cannot be “diminished or impaired.” ...