Losses twice as bad as feared

News arrived today from Stated Clerk Clifton Kirkpatrick that the Office of the General Assembly’s budget for 2008 needs to be cut 5 percent, and up to seven staff members need to volunteer to go elsewhere. Apparently the drastic budgeting and staff cuts that decimated the General Assembly Council offices in Louisville have found their way to the Office of the General Assembly (OGA) to semi-decimate its numbers.

Kirkpatrick had this to say:

“We have been good stewards of the resources entrusted to us, coming in under budget for the tenth straight year,” said Kirkpatrick, “and over 95 percent of per capita apportionments are being paid. We are deeply thankful for the faithfulness of congregations and presbyteries in their per capita giving, despite the financial crunch being experienced by many presbyteries and synods. That crunch, plus a decline in overall church membership, is having an impact on us.”

So, reading between and behind the lines, what is going on? First some facts:

• The 2008 per capita expense budget approved by General Assembly in 2006 was $15,061,674.
• A 5 percent reduction amounts to $753,084.
• The 2008 budget had already taken into account an expected $350,000 in uncollectible per capita.
• If, however, approximately 5 percent of the expected per capita apportionment has proved uncollectible, that amounts to $632,591, which is $282,591 worse than expected and an enormous jump in per capita withheld.
• Likewise, the 2008 budget was already based on what was thought a rather pessimistic (but safe) estimate of a loss of 85,000 members in 2006. This was expected to follow an estimated loss of 65,000 members in 2005, compared to an average yearly loss of 43,430 members from 2002 to 2004.
• Revenue already expected to be lost when 85,000 members are no longer present to pay $5.79 per capita equals $492,150. In other words, if you write off that many members, OGA loses nearly a half million dollars.
• The heads to be counted and "taxed" in 2006 were expected to be 3.7 percent fewer than in 2005, but that was already factored into the 2008 budget. Losses much greater than 85,000 and far beyond 3.7 percent could be the case for 2006.
• OGA has about 64 employees, as listed in the planning calendar directory. Reducing that number by 7 to 57 employees would be an 11 percent reduction.

All of this means that something worse than expected has happened. Apparently OGA is compiling 2006 membership statistics and total shortfalls in per capita collection that make an additional three-quarters of a million dollars of expected 2008 income disappear. A lot fewer members than expected are present to pay per capita, and/or a lot fewer presbyteries than expected are transmitting the full per capita apportionment.

In planning for the 2008 budget at General Assembly in June 2006, $350,000 was expected not to be collectible from presbyteries, and $492,150 was expected to be lost with the 85,000 net loss of members. That’s a planned $842,150 not to be received, and the budget took that fact into account.

Now in February 2007, only eight months later, the expected loss has nearly doubled, with an additional $753,084 needed to be cut from the budget! Apparently we are losing members and/or sessions are withholding per capita at nearly twice the rate expected eight months ago.

Individual members and church sessions are voting on the work of the denomination with their feet and their wallets. Obviously, change is required. Presbyterians as a whole simply do not want what they are presently receiving from Louisville. As painful as it must be to slash one’s employees by 11 percent, the church is sending our Stated Clerk a message by making that reduction necessary.

Further, OGA program expenses and personnel expenses each make up about half of the overall budget. So why not cut somewhere other than staff? Take out PCUSA contributions to the National Council of Churches ($300,000) and the World Council of Churches ($458,402), and the deficit is practically solved, without the loss of any employees!

Per capita budgets have grown to be enormous--over $15 million for 2008 for General Assembly--from one simple sentence in the Book of Order: “Each governing body above the session shall prepare a budget for its operating expenses, including administrative personnel, and may fund it with a per capita apportionment among the particular churches within its bounds (G-9.0404d).”

Perhaps our denominational structure is undergoing a “market correction,” much as the stock market seems to doing this week as well.