New budgets reflecting the deep dent that COVID-19 is making on the finances of the Presbyterian Church (U.S.A.) are now going to the 2020 General Assembly for approval.
With very little discussion, three entities – the Presbyterian Mission Agency Board, the Committee on the Office of the General Assembly and the board of the PC(USA), A Corporation – took a series of votes during a joint online meeting May 18 to send the proposed new budgets to the 2020 General Assembly, which will meet virtually in June.
A COVID-19 Financial Team that convened earlier this spring is projecting sizeable income declines across the PC(USA) over the next several years, with income down about 25% overall in 2020 and 2021.
The proposed budgets call for no General Assembly per capita increase in 2021 and 2022 – leaving the proposed per capita rate at $8.95 per member in 2021 and 2022 – the same as it is this year and was in 2019.
“An increase to the apportionment rate for 2021 is not politically, or economically, feasible,” a report from the COVID-19 Financial Team states. “This will lower per capita income by about 10% from the provisional budget approved last month. Further, the uncollectible per capita will increase,” which will effectively decrease the available per capita by 25% in 2020 and 2021. “Thus, the overall per capita available in the budget will decrease by about 35%,” the report states.
“There is significant financial hardship and uncertainty at all levels” of the denomination, said Kathy Lueckert, president of the A Corporation. Given the declines in giving and investment income, the interagency COVID-19 Financial Team felt strongly that it needed to present a “more realistic and responsible budget” than preliminary budget documents presented for approval in April, she said.
Already this year, for example, the PC(USA)’s short-term investments have decreased by more than $50 million, Lueckert said.
The proposed budgets don’t call for staff or program cuts now – and say that some savings can be achieved this year through cutting travel and in-person meetings and not filling vacancies.
Ken Godshall, a pastor from Kentucky and Presbyterian Mission Agency Board member, said the 2021 budget includes a $12 million operating deficit, and asked how that will be funded.
Adjustments to expenses will be made after the General Assembly meets in June, Lueckert said. “This is new territory that we’re blazing,” she said. While the financial team was able to put together income projections for a revised budget quickly, there wasn’t enough time to consider how expenses might be reduced, she said – adding that decisions on cutting budgets would be the responsibility of the respective governing boards or committees for those entities in the months ahead.
“The timing of this did not allow us to make those decisions in a measured, thoughtful, prayerful way,” Lueckert said.
The unified budget being proposed for the Presbyterian Mission Agency, the Office of the General Assembly and the Administrative Services Group would be $80.1 million for 2021 and $83.4 million for 2022 – down about $10.4 million for 2021 and $9.1 million for 2022 from what had been suggested in April.
The proposals may include some space for adjustments, however. One recommendation asks the 2020 General Assembly to give the Committee on the Office of the General Assembly, the Presbyterian Mission Agency Board and the A Corporation Board authority “to amend the various adopted budgets as appropriate to address on-going financial implications of the COVID-19 pandemic and other situations that might emerge,” and to report those amendments to the General Assembly in 2022.
(Read here for more information on the budget proposals.)
Lueckert also said interagency teams are being formed to look at cash flow in the PC(USA) and ways of trying to encourage giving, despite the difficult economic environment.
The joint meeting also gave the leadership of the Office of the General Assembly a chance to test drive the technology it will use for voting and debate at the virtual General Assembly.
“Patience and grace are the words of the day,” said Vilmarie Cintrón-Olivieri, co-moderator of the 2018 General Assembly, who presided over the meeting along with her co-moderator, Cindy Kohlmann. “This has provided us with a great opportunity to hone the plans and the processes,” Kohlmann said at the close of the meeting – adding that the leadership team welcomes feedback on what’s working well and what can be improved.
The General Assembly will meet virtually to elect its leadership June 19 and in plenary sessions June 26 and 27.