CalSTRS Retired Educator - Summer 2007 eNewsletter - CalSTRS Pursues Final Elk Hills Funds

CalSTRS continues to pursue the remaining funds due the state from the 1997 sale of the Elk Hills Petroleum Reserve. Those funds go into the Supplemental Benefit Maintenance Account, which provides quarterly payments to older CalSTRS benefit recipients.

The U.S. Congress included a related $48 million appropriation in the 2006 Energy and Water Development funding bill, but there is approximately $9.71 million still available in the Elk Hills School Lands Fund. Additional funds should become available when outstanding Department of Energy issues are resolved.

In March, 22 members of California’s House delegation sent an Elk Hills-related letter to the House Appropriations Subcommittee on Energy and Water Development. Acting on behalf of California’s retired teachers, our representatives urged the committee to include an Elk Hills appropriation of at least $9.7 million in the fiscal year 2008 budget.

This recent budget effort has been led by Representatives Adam Schiff (D-Burbank), Kevin McCarthy (R-Bakersfield), Mike Honda
D-San Jose), and Lucille Roybal-Allard (D-Los Angeles) as well as long-time Elk Hills payment supporter, Senator Dianne Feinstein
(D-California).

“We are grateful to Representatives Schiff, McCarthy, Honda and Roybal-Allard for their bipartisan leadership on this issue,” said Dana Dillon, Teachers’ Retirement Board Chair. “They have taken a strong stand for California’s retired teachers by pushing the federal government to honor its Elk Hills obligations. We’d also like to thank the other California House members who support the appropriation and Senator Feinstein for her continuing efforts on our behalf."

CalSTRS will continue to work with our House delegation, Senator Feinstein and constituent groups to secure the final payments due.

Payments Provide Purchasing Power

The Supplemental Benefit Maintenance Account payments, which are funded in part by the Elk Hills payments, are intended to help eligible members keep pace with inflation by supplementing their monthly benefit to 80 percent of its original purchasing power. The program is primarily financed through the state’s General Fund (see related story).

Elk Hills History

The Elk Hills compensation was established when the federal government sold the petroleum reserve for $3.65 billion in 1997. Nine percent of the proceeds, or $320 million, was set aside for California’s retired teachers as compensation for school lands included in the Elk Hills property.

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