The Michigan Supreme Court says the state must return more than $550 million to school employees who had money deducted for retiree health care.
The court ruled 6-0 Wednesday.
School employees had 3 percent of their pay deducted for about two years under a law signed by Gov. Jennifer Granholm, but the law was declared unconstitutional.
Snyder in 2012 signed a new law that has survived court challenges.
The Supreme Court says the 2010 law violated the contract clauses of the federal and state constitutions, and the state failed to show it was reasonable and necessary to further a legitimate public purpose.
Gov. Rick Snyder, who'd wanted to keep the money, says he's "pleased that taxpayers will have resolution." The money's in escrow, so the decision won't affect the budget.