OMAHA UNILATERALLY CHANGES RETIREE'S BENEFITS -- CONTRACT CLAUSE IMPLICATIONS.

Many American cities are facing budget shortfalls in 2010. The mayor and city council in Omaha, Nebraska addressed the shortfall by unilaterally requiring retirees to pay a portion of their health insurance premiums, despite labor contracts requiring the city to pay the entire premium. The contract clause in the United States Constitution prohibits states (and cities) from interfering with the obligation of contract; however, this prohibition is not absolute. This paper examines whether or not Omaha can legally require retirees to pay a portion of the premium. [ABSTRACT FROM AUTHOR]