But a deficit of $2.65 million is projected for the 2004 budget – which will bring more layoffs, which are expected to be announced by early April. Between now and then, “we will spend a good deal of our time thinking about how God is moving us through this process,” figuring out “where is God calling us,” said John Detterick, the council’s executive director.
In preparing this material, “we also struggled with the stark reality that we can no longer do everything” the denomination does now, said Kathy Lueckert, the council’s deputy executive director. “There’s not a way that I’ve figured out to make it not painful.”
This next round of cuts also will be difficult because denominational leaders recognize that the factors driving it are not temporary: the problems are real and will not go away. The PC(USA) continues to lose members. The economy is struggling, which means that local congregations also feel the crunch.
“It would be difficult to make decisions (about cutting the budget) if the economy were good,” Lueckert said in an interview. But denominational leaders know that the people they lay off may have a hard time finding other jobs. And “it’s hard to ask a congregation to consider more mission giving when a major plant in their community has just laid off people,” she said.
Here are some key numbers in the report.
THE 2003 BUDGET
Unrestricted income for 2003 is now expected to be $36.51 million, about $450,000 less than what was in the budget that the General Assembly approved last summer. And unrestricted expenses are expected to be $38.04 million, about $1.08 million more than had been projected – producing a $1.53 million shortfall.
There have been some changes in the anticipated revenues for this year. Shared mission support – unrestricted mission giving by congregations and presbyteries – is expected to be down $500,000, reflecting the tough economy. Additional expenses now anticipated for 2003 include $400,000 more for insurance, something that many institutions have encountered after the Sept. 11 terrorist attacks; a $100,000 increase in Board of Pensions medical dues, effective July 1, 2003; and additional expenses of $490,000 for an independent committee of inquiry investigating sexual abuse of missionary children in the Congo.
The staff leadership team is proposing balancing the 2003 budget by using $880,000 from reserves, and by requiring employees to use all their vacation days in a year, or lose them. Until now, employees at the PC(USA)’s headquarters in Louisville could carry over up to 10 unused vacation days a year; requiring them to take all their vacation in the year in which it was earned will save an estimated $650,000.
THE 2004 BUDGET
A gap of $2.65 million is projected between unrestricted income and expenditures in 2004.
Unrestricted mission giving from congregations and presbyteries is expected to drop about $500,000 from the 2003 levels, because of the economy. Changes in the spending formula by which funds flow from the Presbyterian Foundation to the General Assembly Council are expected to produce a reduction in restricted funds of $1.25 million from the amount given in 2003.
Built into the 2003 budget, with unrestricted expenditures of $38.78 million, are $400,000 for staff salary increases of 2 percent and $200,000 for increased health insurance costs. The figure also assumes a $750,000 contribution to the capital reserve fund – no contribution is being made in 2003 – $750,000 for curriculum, and $900,000, or $100,000 less than initially planned, for the Mission Initiative, a campaign to raise $40 million for international mission work and new church development.
Budget officials are looking at ways to increase revenue – including the possibility of recovering administrative fees from restricted gifts, or of requiring new employees to wait 90 days before receiving full benefits. The idea of recovering administrative fees from restricted gifts – which up until now were used only for the purpose for which they were given – likely would be controversial, but could produce significant revenue and is worth considering, Detterick said.
Despite those options, it is inevitable, Detterick said, that jobs and programs will be cut in 2004 as well.
And while the council will vote on the final budget proposal for 2004, it will fall on the staff leadership team to make recommendations for specific cuts, as it did last year. Here is another complication. Recommendations need to be made soon for how to cut the budget – the big claps of thunder, choosing exactly what jobs and programs will be lost. But the General Assembly Council is enmeshed in its own strategic visioning process – an ongoing effort, now some years in the making, of trying to determine what it sees as most central to its work, and why.
That lack of clear priority-setting by the council, something that’s happened “for all good reasons” as the council struggles to decide what it sees as its role and key purpose, makes it “very difficult” for the staff leadership team as it is again trying to cut the budget, Lueckert said.
So the staff leadership team, while not yet proposing specific cuts, has listed the programmatic areas it considers “most essential” to the council’s work, based on four priorities approved by the General Assembly in 1993, a decade ago. And within each of those four categories – evangelism, justice, partnership and spiritual formation – the staff leadership team has identified as its top three emphases, the work it most wants to continue and is likely not to be cut.
Within those “essential” areas, the three top priorities, in descending order, were defined as follows:
Evangelism – church development, mission program grants, and communication about the PC(USA)’s work.
Justice – racial ethnic ministries, women’s ministries, social justice.
Partnership – ecumenical partnerships and mission personnel; church leadership connection; Committee on Theological Education.
Spiritual Formation – curriculum, youth and young adults, mission interpretation.As painful as more cuts will be, the PC(USA) is not alone.
Lueckert said she met recently with a group of her counterparts from other denominations, and found many of them are facing financial crises as well. “On the one hand, it was very hard to hear that,” Lueckert said. But “there was a little comfort in common misery . . . They’re experiencing the same kind of pain and anguish that we are.”
The executive committee also voted to recommend to the General Assembly Council a 3 percent salary increase in 2003 for Detterick. If approved by the entire council, that would raise Detterick’s annual salary to $150,380 for this year.
The committee also is recommending that Donald Campbell, director of the PC(USA)’s Congregational Ministries Division, be hired for another four-year term.