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BY MELISSA LAUBER
UMCONNECTION STAFF

In an act of faithful stewardship to strengthen the health of the Baltimore-Washington Conference and in a commitment to continue to reduce local church apportionments, the Council on Finance and Administration recently unveiled a proposed 2013 Baltimore-Washington Conference budget that reduces spending by $1.4 million. This includes $420,000 in staffing reductions, which affect 14 positions; saving $133,000 in facilities and information technology expenses; and cutting $547,000 in other administrative and ministry costs.

Trimming expenses will enable the conference to continue to meet its goal of decreasing the benevolence factor so that it will reach 16 percent by 2017.

The benevolence factor is that percentage of a church’s budget that is used to calculate its annual apportionment payments. The benevolence factor generally includes salaries, programs and building-related expenses. It does not include money spent on mission and capital expenses.

The proposed benevolence factor for 2013 is 17.5 percent, which represents about 11.5 percent of all local church spending. Reducing the benevolence factor to 16 percent would be the equivalent of a tithe, or 10 percent of the average church’s budget, which would be paid to do connectional ministry beyond the local church. (In 2005, when the apportionment reductions began, the benevolence factor was at 24.8 percent.)

Reducing the amount local churches pay in apportionments recognizes that our most vital mission and ministry happen at the local church level, said Bishop John Schol. “The conference is committed to equipping local churches so that they have more resources to faithfully and effectively make disciples for the transformation of the world. In addition, we know that many of our congregations are experiencing financial challenges. With this budget we continue to stand in solidarity with our congregations.”

However, in pursuing this goal, the conference also faces some challenges that necessitate a reduction in expenses. The challenges, said the conference treasurer, Paul Eichelberger, include fewer worshippers, a smaller apportionment base and increased costs.

Eichelberger and other conference leaders shared this information at regional briefing sessions April 14 in anticipation of the vote on the budget and other matters at the annual conference session at the end of this month.

In 2000, there were more than 80,000 worshippers each Sunday in the Baltimore-Washington Conference, Eichelberger reported. By 2011 that number dropped to 65,500. There are indicators that this decline is slowing; however, for planning purposes, if there are no dramatic changes, the number of worshippers is expected to continue to drop by 1.1 percent to 62,000 in 2016.

In response to losing worshippers and a number of other factors, including a rocky economic landscape, churches have had to cut back on their budgets, creating a smaller apportionment base.  In 2012, the BWC’s apportionment income was projected to be $15,154,223. Because of the smaller apportionment base, the projected apportionment income for 2013 is estimated to be $14,185,236 – approximately $1 million less than 2012.

In addition, this year, because of its faithful mission and ministry, the Baltimore-Washington Conference was one of three conferences in the United States that experienced an increase in the amount of apportionments it pays to the denomination.

For the past 15 years, the BWC has been one of the few annual conferences that pays 100 percent of its General Church apportionments. These apportionments, in 2012, are 25.8 percent of the conference’s budget.

Other significant line items include retiree health benefits, which are 10.6 percent of the annual budget, and staff salary and benefits, which are 33 percent of the 2012 budget.

In addition to making cuts in administrative and program expenses, reducing staff was also determined to be an essential part of making up the $1 million budget gap.

Reductions were made across the board in every team and department. As much as possible, the bishop said, positions that were vacant, or filled with a temporary worker, were eliminated. (A chart of the new BWC staff structure is online.)

In addition to the staff changes, the conference will be implementing a new health care plan for retired clergy.  The new plan comes through the General Board of Pensions and Health Benefits’ Extend Health program. 

Extend Health operates as a national health care exchange where individuals are given money, based on years of service, to purchase health insurance policies that supplement their Medicare coverage and are tailored specifically to their healthcare needs.

According to the Rev. Jackson Day, the incoming chair of the conference Board of Pensions, with Extend Health, the BWC liability will be reduced from $46.3 million under the current plan to $24.2 million. This will reduce the unfunded liability to $5.6 million, based on the existing reserves of $18.6 million, thus reducing the need to divert funds from other conference priorities, Day said.

Initial projections estimate that the average BWC participant may expect to save at least $400 to $1,000 under the new plan.

Workshops on Extend Health, which goes into effect in October, will be held Sept. 11 and 12.

To see a copy of the proposed 2013 BWC budget, click here.