A law in Michigan that requires school employees to pay 3% of their salaries for retiree health care has been declared unconstitutional by Judge James Giddings on Friday. He said the actions taken by the Michigan law makers in this case were “arbitrary and unreasonable”. This ruling follows one in February that said another 3% provision for state employees was unconstitutional. Both of these cases are expected to ultimately appear before the Michigan Supreme Court.

Because of this ruling, the state is facing a $300 million hole in their budget. The teacher’s union initially filed the lawsuit because despite the fact that the teachers working and paying the 3% out of the paychecks for heath care, they were not guaranteed the same benefits when they retired. According to Geralyn Lasher, a spokeswoman for Governor Rick Snyder, the government wants to appeal this ruling of the case.

David Hecker, of the American Federation of Teachers Michigan said that the state shouldn’t reduce the funding given to retired teachers even if the law requiring current teachers to pay 3% of their paychecks is struck down. “Retiree health care needs to be provided, and the state needs to step up and provide it”, he said.