Last month the state supreme court rejected an appeal by Governor Arnold Schwarzenegger’s administration to reduce the interest payment. That left in place a ruling last summer by the Sacramento’s Third District Court of Appeal that ordered California to pay the overdue contribution and boosted the interest rate from 7 percent to 10 percent, increasing the sum by about $40 million. “This case underscores that you can’t treat a trust fund like another stage agency in making budget reduc- tions,” says Ehnes.
