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 CNS Story:

ECONOMY-DIOCESES Dec-18-2008 (970 words) xxxn

U.S. dioceses prepare for gloomy economic forecast, pray for the best

By Chaz Muth
Catholic News Service

WASHINGTON (CNS) -- U.S. Catholic dioceses in regions hardest hit by the economic meltdown haven't had to resort to drastic financial measures, but officials are bracing themselves for the possibility.

Officials from dioceses contacted by Catholic News Service Dec. 17 said their 2008 budgets are solvent, enabling them to operate without radical cuts until the end of June. However, they haven't yet determined how the current economic climate will affect their budgets for the 2009 fiscal year, which begins July 1.

In the meantime, they all have reported trimming expenses where they can and proceeding carefully into the new year.

"I do think we're impacted, but it's hard to know by how much at this point," said Sister Charlotte Davenport, a Sister of St. Joseph of Peace who is chancellor of the Archdiocese of Anchorage, Alaska. "We're watching it day by day and keeping expenses at a minimum. We're being very, very cautious."

With most U.S. dioceses conducting their annual fundraising appeals in the spring, officials in Detroit, Anchorage, Reno, Nev., Toledo, Ohio, and Los Angeles said they are praying Catholics will be generous this year, but are bracing themselves for the potential of smaller contributions.

Those dioceses' states have some of the highest unemployment rates in the nation.

"The economy in Nevada has been terrible, so we are concerned about how much people will be able to give during the appeal," said Brother Matthew Cunningham, chancellor of the Diocese of Reno and a member of the Congregation of Our Lady of the Holy Rosary. "There have been a lot of layoffs in the gaming and warehouse industry here, and even the local governments have already begun the process of laying people off."

Catholic charitable organizations in western Nevada have reported lower than normal donations in the past few months at a time when more people are in desperate need of their services, Brother Matthew said.

Like other U.S. dioceses, Reno officials will have a better handle on their diocese's economic forecast in the first few months of 2009, and will be able to gauge the tithing capacity of Catholics once their fundraising campaigns get under way, he said.

"We haven't had to lay anyone off, or impose hiring freezes yet, but we're concerned about what is going to happen after the first of the year," said Sally Oberski, spokeswoman for the Diocese of Toledo. "We've gotten hurt by our investments. The auto industry is huge here, and there have been a ton of layoffs in the area. Our sense is after the first of the year we're going to have to do something."

The U.S. lost 533,000 jobs in November, the most in any single month in 34 years. The national unemployment rate climbed in December to 6.7 percent -- itself a 15-year high -- up from 6.5 percent in October.

Many states' unemployment rates are considerably higher. In Michigan, beset by auto-industry woes, it was up to 9.3 percent in October. Joining it was Rhode Island, a state that watched its unemployment rate shoot up from 5.1 percent in October 2007 to 9.3 percent in October 2008. California, the nation's most populous state, recorded 8.2 percent unemployment this October.

Rounding out the states with the highest unemployment rates were South Carolina, 8 percent; Nevada, 7.6 percent; Alaska, 7.4 percent; Illinois, Ohio and Oregon, each at 7.3 percent; and Mississippi, 7.2 percent.

Diocesan officials nationwide rely on annual fundraising campaigns to support their budgets. But, they also rely on income from their investments, and with the chaotic situation on Wall Street during the economic downturn, many financial administrators of dioceses have stood by helplessly as they watched their fortunes nose-dive.

"We're taking our fair share of lumps, but I think we're probably in a better position than some, because the Archdiocese of Detroit's investments lean toward the conservative side," Daniel Oliver, archdiocesan director of finance and administration, told The Michigan Catholic, newspaper of the Archdiocese of Detroit.

Declines in the weekly collection revenue affecting many parishes have yet to impact the archdiocese, Oliver said, because the 6 percent assessment on parish revenues -- the cathedraticum -- paid by parishes is always based on church operating revenues from the previous fiscal year. The archdiocese's fiscal year runs from July 1 through June 30.

"What's happening in the parishes now is really going to affect us more in 2009 and 2010," he said, adding that he is anticipating a decline in revenue roughly in the range of 4 percent to 7 percent.

The Archdiocese of Detroit will have to figure that decline into its future budget, he said.

"Just like every other organization, we're going to have to pare back any nonessentials," Oliver said, "while continuing to provide services to the people of the archdiocese."

With the potential of lower revenues in 2009, the Archdiocese of Los Angeles announced Dec. 9 it would impose a salary freeze for the fiscal year beginning July 1, 2009, for all the priests, religious and staff it employs, said Tod M. Tamberg, spokesman for the California archdiocese.

"While difficult for all of us, this salary freeze enables the continuance of the ministries that support the proclaiming of the Gospel in the Archdiocese of Los Angeles," Tamberg told CNS.

The Diocese of Reno instituted a hiring freeze Dec. 1 that will extend until June 30, the final day of the 2008 budget year, and it may continue after July 1, Brother Matthew said.

"We're more getting ready for what may come than suffering the immediate impact of the economic crisis," he said. "The markets have destroyed any investment income we had out there. We really are living directly within our operational budget."

- - -

Contributing to this story was Robert Delaney in Detroit.

END


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