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Committee proposes $23 million budget cut, reduction in diocesan asking

Shorter General Convention, staff layoffs could be part of impact

[Episcopal News Service – Anaheim, California] The mission, ministry and infrastructure of the Episcopal Church would be nearly $23 million leaner if the 76th General Convention approves the 2010-2012 budget presented on July 15.

The proposed budget represents the "crafting of a new look at what the Episcopal Church should be doing now for (and with) our dioceses, congregations, and members to enable their own missions and ministries more effectively," Diocese of Connecticut Bishop Andrew Smith, Program, Budget and Finance (PBF) co-chair, told a joint session of the houses of Bishops and Deputies.

"We believe that this budget is responsive to the Gospel, the voice of the convention and the economic realities of our time," Smith said, reading from the committee's presentation letter that accompanied the budget document presented to the houses.

The budget, as outlined in Resolution D067, is aimed at "giving to others first and then to ourselves, last," according to the presentation letter.

A budget line item dedicating 0.7 percent of income to Millennium Development Goals work, cut from a draft version of the budget, was restored, and a corresponding percentage for domestic-poverty initiatives was added.

PBF's proposal predicts total triennial income of $141,271,984, with $79,161,193 coming from the dioceses and $27.6 million from investment income. Expenses are budgeted at $140,856,531.

Those figures compare with the projected bottom line of the current 2007-2009 triennial budget of $164,863,529 in revenue and $163,934,334 in expenses.

In January the church's Executive Council approved a draft 2010-2012 budget based on $161,820,613 in revenue and $161,791,177 in expenses.

Saying the "the church can no longer sustain a 10-day General Convention," PBF's version of the budget proposes that the 77th General Convention in 2012 be two days shorter and become as paperless as possible. A shortened meeting would save the dioceses money by reducing their convention travel costs, PBF chair Pan Adams-McCaslin told the session during a 15-minute question-and-answer session that followed the presentation.

In addition, the church's 25 committees, commissions, agencies and boards (CCABs) would have to meet electronically during 2010 to greatly reduce travel costs for that year. The Executive Council, which oversees church policy between General Conventions and meets three to four times per year, is not included in the meeting plan.

Approximately 30 of the 180 people employed by the Episcopal Church in its New York and regional offices would lose their jobs under the proposed budget, according to Chief Operating Officer Linda Watt. Some church-wide programs would be eliminated.

The proposed budget would be based in part on a change in the formula for asking the 110 dioceses to contribute to the cost of funding the wider church. The current request for 21 percent of income (known as "the asking") would be preserved for 2010, but it would then drop annually by one percent in 2011 and 2012. In addition, the $100,000 income exemption would be raised to $120,000, thus leaving more money with the dioceses.

"We're trying to be realistic in looking at the economy," Adams-McCaslin said in an interview, adding that the committee's three bywords for its process and the resulting budget have been "honest, accountable, transparent."

Adams-McCaslin said the committee has also been guided by Jesus' metaphor of pruning that leads to new growth cited in John's gospel, and by the belief that "the Holy Spirit is already at work with new initiatives."

Indeed, at the beginning of the joint session, Presiding Bishop Katharine Jefferts Schori acknowledged that "death will be reflected in this budget … it will to some of you feel like a heart attack."

"This church, however, lives in eternal hope of the resurrection," she added. "We believe through grace that this church will emerge more able to respond to its vocation."
 
Adams-McCaslin said that the committee hopes that the movement towards a 19 percent diocesan asking shows that the Episcopal Church takes seriously the calls the committee heard for transparency and accountability, and the dioceses in turn "will honor the asking and that we all meet in the middle."

Twenty-eight dioceses have committed to pay the current 21 percent asking, according to the most current information available. Six dioceses committed to slightly more than that. Twenty-six dioceses have not filed the required reports that allow for a calculation of the diocese's operating income. Each year's annual giving is based on a diocese's income two years earlier.

"This budget asks the church to live within its means," Adams-McCaslin told the joint session. "We cannot spend what we will not give."

If each diocese gave the full 21 percent, the church would have $6.5 million more in annual income, according to PBF. Each one percent reduction of the 21 percent asking means $925,000 less in income and every $25,000 increase in the $100,000 exclusion reduces annual income by $583,000.

Based on the changed asking formula, income from dioceses is expected to be $28.3 million in 2010, $26.3 million in 2011, and $24.4 million in 2012 for a total of $79.1 million.

Investment income, which amounts to 20 percent of revenue, is expected to total $27.6 million over the triennium. Sixteen percent of triennial income would come from government money granted to the church for its refugee resettlement work. Eight percent comes from other income, including such items as rental income, advertising, subscriptions and merchandise sales.

Sixty-two percent of PBF's proposed budget would be spent on mission and ministry while 22 percent would support the corporate portion of the budget, which covers administrative support of the church's office. Sixteen percent would go to the canonical categories, which include the offices of the Presiding Bishop and the president of the House of Deputies, in addition to General Convention and the CCABs.

The House of Bishops will take up the budget on July 15 and the House of Deputies must concur with the bishops' decision in order for the budget to be adopted. Either house may amend the budget, but if a specific line item is be increased, the amendment must specify which other line item would be decreased.

In addition to the MDG and domestic-poverty line items, other significant additions to the budget include:

  • a $3 million line item to reflect projected costs for legal assistance to dioceses that need to protect themselves against the loss of property;
  • $300,000 in "seed money" for outreach to Hispanic/Latino communities;
  • $200,000 in debt relief for seminarians;
  • $15,000 for a task force on older adults; and
  • $10,000 for ministry materials for young children.

"Where budgets have been reduced for organization and programs, the proposed changes are not value statements about the quality or importance of the ministries or work being done by dedicated staff and volunteers," the committee said in its presentation letter, calling their decisions "hard and, more often than not, painful."

Jefferts Schori spoke to the staff about the budget's impact a half hour before the joint session. Adams-McCaslin, Smith and Watt briefed Episcopal Church Center staff in Anaheim about the potential impact of the budget after it was presented to the joint session. Videotaped versions of those briefings are due to be shown to employees at the church center July 16.

"I know that with the changes that are suggested by the budget, there's anxiety, there's fear," Adams-McCaslin said in the interview. "There's going to be changes at the church center. People's lives are being affected. The church is having to experience what our local congregations are having to experience."

The committee also noted that the budget amounts for 2011 and 2012 are subject to adjustment as the triennium progresses. In particular, PBF said that it expects that "increased accountability and oversight" will result in adjustments to the annual budgets over the triennium.

-- The Rev. Mary Frances Schjonberg is national correspondent for the Episcopal News Service.

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