Diocesan Convention approved a balanced $2.5 million budget for 2010 and revisions to the budget reporting and budget processes, after a lively discussion at a budget hearing attended by more than 100 people, and a 30-minute debate on the convention floor.
The extended discussions reflected the diocese’s struggles to reconcile funding priorities with current economic realities. The budget projects a 9 percent reduction in pledge income, the diocese’s largest source of revenue.
“The good news is that our income and our expenses have tracked fairly well. The bad news is that they are both heading downward,” Treasurer and Chief Financial Officer Richard Graham told the convention. “This is the environment in which we live. We need to be mindful of every dollar and how we use it.”
“There were some tough calls to be made in this budget,” said the Rev. Bill Parnell, chair of the Diocesan Budget and Finance Committee, adding that the committee had framed the budget in terms of the diocesan mission statement. “We want to make it clear that the money that we expend is in pursuit of our mission.”
Two of those “tough calls” generated the most discussion: the decision not to budget anything toward the $481,000 the diocese owes on its 2008 pledge to the Episcopal Church and the decision to fund domestic and international outreach through a new, voluntary Alleluia Fund and not as a percentage of the budget.
“You all know, if you’ve been around the Diocese of Newark for any length of time, that we have considered ourselves a leader in pledging to the Episcopal Church,” Parnell said. “In 2008, we came up short by a very large amount on our commitment.”
Through cost savings in 2009, the budget committee made a “good faith payment” on the pledge, Parnell said. “[We’re] not forgetting that there’s an amount that’s due, but saying we cannot pay the entire amount right now.”
The diocese paid $20,000 in 2008, $59,000 at the end of 2009 and two payments of $25,000 each at the beginning of 2010, for a total of $129,000 toward the $610,000 2008 pledge, said Graham.
The diocese has paid all of its 2009 pledge, and the budget includes full funding for the 2010 asking, Parnell said.
Concerning the Alleluia Fund, recent budget trends show that, “if we are talking about giving to outreach as a [budget] percentage … the actual dollars are going to decrease for outreach,” Parnell said. “We’re using this fund, this new fund, as a way, we hope and pray, of increasing our commitment to outreach throughout the diocese, not only by congregational giving, but by individual giving as well.”
In 2009, the diocese budgeted $84,000 for domestic and international outreach. The 2010 budget projects $108,000 in funding from the voluntary Alleluia Fund, an average of $1,000 per congregation.
“I know that for some of our smaller congregations, $1,000 may be a real stretch,” Parnell said. “I also know that for some of our larger congregations, $1,000 to the Alleluia Fund may not seem like much at all. In adopting this budget, you are not committing yourselves to a fixed amount. You are simply being encouraged to give to this fund and to give generously.”
In addition to the issues of outreach and debt to the national church, convention-goers were briefed on other financial concerns.
The diocese’s lay pension program is “underfunded to a point that if we tried to include that in this annual budget, the mission and ministry of this diocese would have been hobbled,” Parnell said. “The committee has affirmed a decision to address that through the sale of surplus diocesan property rather than putting it in the annual budget.”
The budget also does not include money for reserve funds for items such as the bishop’s sabbatical, future conferences, capital repairs to diocesan properties or the call of the next bishop, Parnell said. “In doing that, the committee is making a very difficult choice. In effect, what we’re saying is: If we don’t fund it this year, we’re going to have to fund it at higher levels in future years.”
Budget hearing
Although no resolutions had been submitted concerning the proposed budget, the convention agreed Jan. 29 to hold a budget hearing to air questions and concerns before voting on the budget the next day.
“I’ve got a lot of questions about this budget,” the Rev. Canon John Hartnett of St. Elizabeth’s, Ridgewood, told the convention. “I don’t want to oppose it.”
 Richard Graham, Treasurer and CFO, and the Rev Bill Parnell, chair of the Diocesan Budget and Finance Committee, field a question from one of the more than 100 people who attended the budget hearing on Jan. 29. Originally scheduled to last 45 minutes, the hearing was extended by an additional half hour after the Constitution and Canons Committee agreed to delay the start of their hearing immediately following. NINA NICHOLSON PHOTO |
During the hearing, participants asked for clarity on the amount paid and owed to the Episcopal Church and when the diocesan pledge dropped from a former commitment of 25 percent.
Not everyone supported paying the full pledge. “I continue to be appalled at the percentage of our budget, especially in this time of our own need, that goes to the national church,” said Christy Ward of Messiah, Chester. “And I have a serious problem with how we have decided this year to handle outreach. What we have decided to do is that it will not be a portion of our budget.” If the diocese gave 10 percent to the Episcopal Church, she said, “then we would have that $108,000 left for outreach, and we would have another $81,390 to put into that underfunded lay pension plan.”
The Episcopal Church funding formula adopted by General Convention has been 21 percent and in this triennium will decrease by 1 percentage point per year, Parnell noted.
Kim Byham of All Saints, Hoboken, an alternate deputy to the 2009 General Convention, added, “The [Episcopal Church] budget was voted on by the deputies to General Convention, and I shall say 100 percent of the Newark deputies did vote on it.”
Several people questioned the new outreach strategy.
The Alleluia Fund is “a very novel approach to outreach,” said the Rev. Melissa Hall of Redeemer, Morristown. If the diocese doesn’t make its outreach funding goal, she asked, “What is our contingency plan for outreach? Where is that money coming from?”
“Your question really could be asked of any one of the line items,” said the Rev. Thomas Mathews Jr., a member of Diocesan Council and the budget committee. Just as if pledge income was lower than anticipated, he said, “The Diocesan Council would have to review that and see where we would have to make cuts mid-year.”
People also questioned the overall budget process.
“The process encourages us only to talk about line items,” said Ross Wisnewski of St. Mary’s, Sparta. “I think the group wants to have a larger conversation” to address “big-picture” questions such how much to give to the Episcopal Church or whether the budget should include outreach, she said. “I think that’s what’s missing.”
Noting the “integral relationship between making a budget and policy changes,” the Rev. Michael Allen from Trinity, Allendale, said he was concerned that “we’ve made decisions based on a budget, but what I’m hearing is that it’s changed our sense of mission and who we are as a diocese. We want to be involved with that process.”
Concluding the hearing, council and budget committee member the Rev. Vicki McGrath said, “We’re talking about a much bigger picture, and that I do not believe is going to be solved in time for a vote on the budget tomorrow afternoon. You have my personal commitment that this is something that will come up at council and be discussed.”
A new process
On Friday evening, the budget committee met with some of those who had raised process issues. On Saturday morning, chair Bill Parnell, standing with the full budget committee, read a proposed resolution which had resulted from that meeting.
The resolution instructed the Diocesan Council “to institute a review of the budget process, specifically to continue to pursue vigorously transparency in reporting, accountability in decision-making, and fiscal responsibility in accordance with the mission of the Diocese and its stated priorities, including our long-standing commitment to domestic and international outreach and to The Episcopal Church.” It called for a mid-year open hearing on the 2010 budget, monthly publication of budget reports on the diocesan website, and a diocesan forum in early November as part of the budget process. (See the full text of the resolution.)
“I present this resolution to you on behalf of the committee, but we’re not going to vote on it yet, "Parnell said, "because the members of this committee and I still want to hear from you. We’ll talk about the resolution itself this afternoon, but the reason we’re up here is so you can get a good look at us so you can pick us out over lunch.”
 "The members of this committee and I still want to hear from you," said the Rev. Bill Parnell when presenting the Budget Review resolution the morning of Jan. 30. STEVEN BOSTON PHOTO |
When the resolution was formally presented for discussion later in the afternoon, John Hartnett spoke urging convention to vote for it. “In the spirit of transparency I should tell you I was part of the group that drafted this,” he said. Noting that if the budget were voted down, convention would still have to “deal with the fact that we want to spend more money than we have,” he said, “I think we can’t fix this all at one time, but I think we can fix this if we commit to a process which over the next year or so could point us in a different direction.”
A proposed amendment to require paying the 2008 pledge to the Episcopal Church within four years failed.
“The budget committee, in meeting and looking at the money to be paid, recognized that we can only take responsibility for the particular year in which we find ourselves,” said the Rev. Canon Sandye Wilson, of St. Andrew & Holy Communion in South Orange and a member of the budget committee. “We are not able to encumber future budget committees telling them what it is that they need to do.”
Noting that the amendment would require the diocese to come up with $120,000 per year to pay the $481,000 still owed within the timeframe specified by the amendment, Elizabeth Craig of Church of the Annunciation, Oradell said, “I think we have to be realistic, and I think we should leave this to the discernment of the budget committee.”
The Rev. Susan Sica of St. Gregory’s, Parsippany proposed an amendment to be added to the end of the resolution: “and that this process of mid-year hearings, and monthly reports and early November forum be continued for all future diocesan budgets.”
“Rather than assigning blame, many of us are willing to say let’s work on this together,” she said. “And while I appreciate deeply the work that individuals have done, clearly all of us want to have a part of it, not through just representation.” The amendment was adopted.
After more than half an hour of debate, the convention adopted the amended resolution and approved the budget. Speaking over applause and cheers, Bishop Mark Beckwith said to the assembly, “Thank you, thank you for the work that was done by the budget and finance committee, and by the work that we did as a diocese, that you all did on the floor of convention.”
Nina Nicholson is the Director of Communications & Technology of the Diocese of Newark, and a member of St. George's, Maplewood.
