The California Supreme Court has turned down the Gov. Arnold Schwarzenegger administration's appeal of a $200 million interest payment owed to the state teachers' pension fund.
Faced with a looming $10 billion budget gap, the administration sought to lower the interest obligation ordered by a state appellate court.
California State Teachers' Retirement System successfully sued to recover $500 million the state withheld four years in a budget-cutting move by lawmakers and then-Gov. Gray Davis. The original ruling came in 2005 and the appellate court this summer upheld it.
In September, the state repaid the half-billion dollars, which is earmarked for a special supplemental fund for 63,000 older retired schoolteachers, who use the benefits to protect their pensions against inflation. But the administration challenged the interest rate set by an appellate court, hoping it would be reduced.
I agree with this online comment to that news article:
Yes the state is in trouble, and no I'm not a teacher, but right is right and wrong is wrong. The state should have to pay the teachers pension fund back.
Also note this comment:
The teachers' fund is made up of deductions from the teachers' paychecks. The money is invested in various high risk and low risk investments. The money from those gains flow into the pot. It's not a pot of money funded by tax payers.
I pay a higher percentage of my pay into this fund than people pay into social security.