Dan Walters

Dan Walters

By Dan Walters
Published: Monday, Jul. 22, 2013 – 12:00 am | Page 3A
Last Modified: Monday, Jul. 22, 2013 – 6:22 am

The state constitutions of Michigan and California have almost identical provisions prohibiting what lawyers call “impairment of contract.”

Michigan: “No bill of attainder, ex post facto law or law impairing the obligation of contract shall be enacted.”

California: “A bill of attainder, ex post facto law, or law impairing the obligation of contracts may not be passed.”

Their impact, if any, on public employee pensions is a big issue in two pending municipal bankruptcies in California and Detroit’s decision last week to seek relief for its debts, including pension obligations, via bankruptcy.

Detroit’s bankruptcy petition, unlike those of Stockton and San Bernardino in California, directly seeks to reduce pensions.

But its pension systems have filed suit, claiming that it violates Michigan’s “impairment of contract” prohibition and a more specific provision declaring that public pensions are “a contractual obligation thereof which shall not be diminished or impaired thereby.”

To read entire column, click here.