Assembly Appropriations Committee Passes State Teachers' Retirement Fund Legislation

Sacramento – Assembly Bill 789, authored by Assemblymember Gene Mullin (D-South San Francisco), passed unanimously out of the Assembly Appropriations Committee yesterday. AB 789 provides state payment schedule for paying court ordered costs regarding contributions to the State Teachers’ Retirement Fund.

In 2003, the state enacted Senate Bill 20 of the Second Extraordinary Session to avoid a $500 million contribution to the Supplemental Benefit Maintenance Account in the State Teachers’ Retirement Fund. The California Retired Teachers Association (CRTA) and the State Teacher’ Retirement System (STRS) are litigating against the state on this issue, and the state has lost the initial court ruling. When the Court acts on the state appeal, if STRS and CRTA are successful, the state will be obligated to immediately pay upwards of $650-$700 million. The state has a structural budget deficit and such a payment will create a significant problem for funding other programs in the state budget.

“The recipients are mostly elderly retired women teachers who rely on modest pensions for their essential needs,” Mullin said. “This sends an important signal to prevent future borrowing from otherwise stable state funds and assist the state to balance the 2007-08 and 2008-09 state budgets.

Assembly Bill 789 will now go to the Assembly Floor.

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