That one decision illustrates some much bigger problems. The denomination faces real financial challenges: the council knows it must cut $2.65 million from the 2004 budget at its meeting in April, and has been told those cuts won’t come easy, meaning that more jobs will be lost and valued programs, not fat, will be cut.
The elected council is struggling with how to approach that dilemma. For example, how much should it rely on the staff leadership team to recommend what to cut and how much voice in that process the council wants to have itself. Some members want to articulate the theological basis the council will use to make budget-cutting decisions. And, while trying to avoid either micromanaging or being too hands-off, the council members must confront the reality that to save one program or job or benefit or service, something else will have to go.
On Saturday, the final day of its five-day meeting, the council did approve $1.53 million in adjustments to the PC(USA)’s 2003 budget, balancing it by pulling $880,000 from reserves and by changing a policy so that employees will no longer be able to carry over up to 10 days of vacation time from one year to the next, which will free up about $650,000.
It voted down a proposal that the denomination save $100,000 in the 2004 budget by requiring that new employees wait 90 days after they start working before having full benefits. Adelia Kelso, a pastor from Louisiana, said she has people in her congregation with diabetes and other health problems, and to make people like that wait 90 days to get insurance coverage for medical care “doesn’t make any sense . . . It’s not what it means to be church.”
Kitty Rasa, a council member from Tennessee, said her family had to pay high insurance costs out of pocket for several months when her husband lost his job, because they had pre-existing conditions and couldn’t afford to let the insurance lapse. “I personally see this as much as a justice issue as a financial issue,” Rasa said, adding that providing good medical coverage for its workers “is one of the most graceful things that this church does.”
The council also approved some guidelines for the denomination’s top staff to use in addressing the $2.65 million shortfall in the 2004 budget – giving the staff leadership team a framework for making specific recommendations of which jobs and programs to cut. The staff leadership team will rely on four priorities set by the 1993 General Assembly – those of evangelism, justice, partnership and spiritual formation – and within each of those areas has identified three program emphases that are least likely to be eliminated.
Following a recommendation from the council’s Congregational Ministries Division Committee, the council also voted to include with those guidelines language that the 1993 Assembly used to give more of the theological underpinnings for those priorities. However, it only asked the staff leadership team to consider how that language might affect its top choices; it did not instruct the team to reconfigure those priorities. The team would be asked, in light of those theological priorities, “Is this your best” idea of what should be kept and cut, said James Kirk of Baltimore. “If not, continue working.”
But some council members also voiced frustration that they hadn’t been given enough time at this meeting to discuss the guidelines, that it will be too late when the council meets in April to influence the recommendations, that it’s not fair to put some programs off limits for cuts before they’ve had time to weigh the impact on others.
And the debate over recovering administrative costs reflects exactly how difficult this work can be.
Some years ago, 70 percent of the PC(USA)’s budget was unrestricted – meaning the money was given with no strings attached – and 30 percent was designated for particular programs. That made it relatively easy to find the funds to pay for indirect administrative costs within the unrestricted budget.
Now, that percentage has flipped. Today, 70 percent of the denomination’s budget is restricted – and only about $36 million of the $128 million budget comes in unrestricted money. That means some programs benefit from designated giving. A congregation or individual gives money saying, “I want this to be only used for this program or need” – but none of the indirect administrative costs, such as paying for insurance or building security or accounting, can be recovered from those funds. The result: of all unrestricted funds given, about one-third went for indirect administrative costs in 2001, the last year for which figures were available.
A proposal was made Saturday to change that – to begin, starting in 2004, recovering some of those costs from programs funded with restricted dollars, with the change to be phased in over four years, and with the indirect administrative fees recovered not to exceed 9.5 percent.
Immediately, council members concerned about programs funded through restricted giving started lining up at the microphones.
Kris Gerling of Pennsylvania called for a study that would give more information on how programs would be affected.
Bill Saul of California is co-chair of the steering committee for the new Mission Initiative, an effort to raise $40 million over the next five years for international mission work and new church development and redevelopment, particularly among immigrants and people of color. Subtracting out indirect administrative fees from the money raised “would be devastating to the Mission Initiative,” Saul said, adding conversations have already been held with potential major donors in which “there has been an absolute promise” that all the money raised would be used for mission work and church growth.
David Wallace, dean of Johnson C. Smith Seminary in Atlanta, raised concerns about how such a change could affect the Theological Education Fund and finances for small schools such as his, as well as for larger seminaries. Already, “the economy has turned me everywhere but loose,” Wallace said. “I’m very concerned about further reductions coming from any source.”
Eventually, the council voted to postpone any action on the idea until its next meeting in April, so a study could be done to explain the impact the change might have on donors who give restricted funds, as well as programs that receive such funds. Then, Judy Angleberger of Pennsylvania suggested that the study also include the impact on those who give unrestricted money. Angleberger said her congregation generously gives its money to the denomination with no strings attached, and “I think they would be so disappointed to learn that most of their money is going towards administrative costs, where others get the pleasure of saying that our money is going to mission.”
In other business Saturday, the council:
o Elected new leaders. After the 215th General Assembly, Vernon Carroll of Montana, the council’s current vice-chair, will become the chair and Neal Presa of New Jersey the vice-chair.
o Voted to recommend a per capita rate of $5.49 per active member for 2004, an increase of five cents per person. That recommendation still needs to be approved by the 215th General Assembly in Denver.
o Approved a 3 percent salary increase for its executive director, John Detterick. That will raise Detterick’s salary to $150,380 for 2003. While the council voted overwhelmingly to give Detterick the raise, some concerns were raised. “You’ll find dozens of pastors who make substantially more than this,” said Paul Masquelier Jr. of California, in defending the raise. “I think we’ve got one heck of a bargain.” But Kelso confessed to uneasiness, given the budget cuts looming. If things were different, “I’d pay him a gazillion, that’s not the issue to me,” Kelso said. “There may be dozens of ministers who make more, but there are hundreds who make substantially less and who have care of souls . . . I just want to register that there’s some unease. Like I say, I’d pay him a half a million – he’s worth it. I’m just uneasy.”
