Next Elk Hills Payment Omitted in Current Federal Budget Proposal
Sacramento – Officials of the California State Teachers’ Retirement System expressed disappointment this week upon learning that the federal budget, as currently proposed, does not include appropriations for the seventh payment due the fund for the sale of the Elk Hills school lands.
A payment plan was authorized in 1999, two years after the federal government sold the Elk Hills Petroleum Reserve. The income from the school land within the Reserve had long been earmarked for the benefit of California’s educators. While the sale authorized $324 million in payments to CalSTRS, the funds must be appropriated each year in federal budget legislation. Installments totaling $216 million have already been made or appropriated; the installment now omitted from the federal budget would be due October 2005.
The payments are deposited into the Supplemental Benefit Maintenance Account, which provides quarterly payments to older benefit recipients. These payments help eligible members keep pace with inflation by supplementing their monthly benefit to 80 percent of the purchasing power of their initial benefit payment.
Although members who are currently receiving supplemental benefits from this account will not see a disruption, Jack Ehnes, chief executive officer of CalSTRS, stressed the critical importance of maintaining the funding in order to keep the program functioning.
“It’s certainly discouraging news, but we’re still hopeful that the California Congressional delegation will be successful in restoring this money to the budget,” said Jack Ehnes, CEO for CalSTRS. “We will definitely be monitoring this situation with interest and concern.”
The Elk Hills appropriation is only a small part of the funding for the supplemental benefit payments. The program is mostly financed through California’s General Fund.
The supplemental benefit payments to eligible members are required by state law and will continue whether or not the federal appropriation is made each year.