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Sep 17, 2013 | EDOT Staff

Unified Diocesan Budget Leads to Lower Assessments

Budget changes approved by the Executive Board of the Diocese of Texas September 4, 2013 will result in significant reductions in diocesan assessments, leaving more money at the local church level according to Diocesan Treasurer Bob Biehl. Beginning in 2014, the Diocese will move to a unified budget and insurance costs will be funded through the newly formed Episcopal Health Foundation. The Foundation was established with more than $1B from the transfer of St. Luke’s Episcopal Health System to Catholic Health Initiatives earlier this year.  

 

“The St. Luke’s sale provided the opportunity to do several things that the diocese’s Finance Committee has been struggling with for eight years,” said John Bennett-Waters, chair of the Executive Board’s Finance Committee. One challenge was increasing insurance costs and another was gaining clarity and transparency in the budgeting process.

 

“A unified budget was a goal that Bishop Doyle set five years ago,” Biehl said. “It’s now more transparent and more understandable and, with other changes, it allows more money to remain at the local level.”

 

Previously the Diocese had two budgets, the Missionary Budget and the Diocesan Budget. The first funded college ministries, support for mission congregations and grants to outreach programs. The Diocesan Budget covered costs of staffing the Diocesan Centers, providing resources for congregations and insurance for clergy and lay employees. Four years ago, Biehl created a third budget to separate out insurance costs, which had grown to nearly $5 million annually. Separating the cost of insurance helped demonstrate to parishes why their assessment continued to increase, Biehl explained.  Some years the insurance rates increased in double digits. This year, because of years of the work by the Insurance Task Force, the increase was at an all-time low of 2.5 percent (because of the high-deductible health plan that the Diocese now uses).

 

The new, unified budget is organized around outreach, evangelism, formation, congregational development and administration. Bennett-Waters worked closely with Biehl to bring it to the Executive Board, who approved it unanimously.

 

 

Health Insurance Changes
For many years, the Diocese of Texas has been one of only a few dioceses that paid health insurance for its clergy. By spreading out that responsibility through the assessment, smaller churches that could not afford the full impact of a clergy person’s health insurance cost were supported by larger ones that could. At the 2009 General Convention of The Episcopal Church, delegates approved a denominational health care plan mandating coverage through the Church Medical Trust and parity in health insurance for all church employees. This means that in 2014, all lay employees are to receive the same insurance benefits as clergy. Currently a third of the Diocese’s churches offer no insurance to employees.

 

Biehl said he hoped the lower assessment—the rate for the largest churches was reduced from 17.75 percent to 10 percent--would help to cover these costs.  Currently there are 50 of 151 churches that do not offer any insurance to their employees who will be required to do so beginning January 1, 2014.

 

 

Missionary Budget Dissolved
Additionally, there will no longer be an additional “asking” or voluntary budget for the Church’s mission work. This accounted for around $2M in 2013 and many things previously funded from the Missionary Budget--like mission congregations--have been moved. Health related items now will come under the new Episcopal Health Foundation’s mandate and items like new church plants and multicultural missions will now be funded by the Great Commission Foundation (GCF). This second new foundation, established for the purpose of building up the Church, received its corpus of more than $100M from a tithe of the health system proceeds.

 

“So there are some large amounts that came out of the Missionary Budget, which will allow for an annual budget for the Diocese to run effectively at $8.1M for the near future,” Biehl explained.

 

While the assessment will grow in order to take in the missionary items, in terms of the total amount paid to the diocese, “I think that will go down by between 20 and 30 percent,” Biehl said.  “This helps us reduce the assessment and closely aligns each one of our foundations with their intent and goals,” he added.

 

The formula for assessments remains unchanged although the top bracket has been lowered to 10 percent instead of 17 percent. The lowest bracket is at six percent and covers churches that have an income of less than $200,000.

 

 “The assessment will be simpler, provide further help to smaller congregations and not overburden larger congregations,” Bennett-Waters said.  More than $3.8M previously sent to the Diocese will now remain at a local level. 

 

Increased Giving beyond the Diocese
Changes in the budget also allow the Diocese to pay a tithe of the new Diocesan Budget to The Episcopal Church, as well as more provide $250,000 in support of programs throughout the Anglican Communion.

 

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