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Budget Approved, Process Simplified

By Kirk Petersen

The 80th General Convention passed, as it always must, a budget for the operations of the Episcopal Church. More importantly, or at least more enduringly, it streamlined all future budget development by eliminating an entire layer of bureaucracy from the process.

The convention voted to disband the Joint Standing Committee on Program, Budget, and Finance, better known as PB&F, which filled a role in budgeting that many believe has been duplicative.

A brief note on process: Every three years (barring pandemics), General Convention passes a budget for the three years beginning the following January 1. Like any large budget, some of the assumptions behind it are outdated before they are even adopted.

Between General Conventions, the 40-member Executive Council is the governing body of the church, and normally meets three times a year for three to four days at a time. The council has broad authority to make changes to the current budget, and develops a budget for the next triennium.

“The Finance Committee of Executive Council spends two and a half of its three years working on the budget coming up for the upcoming triennium,” said the Rev. Nancy Koonce, a deputy from Idaho and former member of the Executive Council and its Finance Committee. “In January of the year of General Convention, that budget gets turned over to PB&F,” which essentially starts the process over again on a much shorter timeline.

PB&F reviews the budget, solicits feedback from church constituencies, makes budget changes if it sees fit, and presents the budget to the General Convention for approval. The process requires enormous effort in a tight window of time — not only on the part of the 27-member PB&F, but also by Executive Council members and church staff.

“We’re told that if something’s not broke, don’t fix it — but the current budget process is broken,” Koonce said, speaking from the floor of the House of Deputies.

There was some opposition to eliminating PB&F. One deputy raised the concern that by reducing the number of people involved, diversity of opinion could be lost. But the leaders and other members of PB&F strongly urged that their committee be abolished.

Because PB&F has been so thoroughly entwined in the procedures of the church, abolishing it required a 217-paragraph document, Resolution A048. The resolution had to be broken into three parts, and each section was approved by overwhelming voice vote in the House of Deputies July 10.

The House of Bishops concurred July 11, both on A048 and on the 2023-24 budget, in Resolution A228. The two-year balanced budget of just over $100 million drew little debate. The PB&F narrative submitted with the budget flagged several highlights, some of which were explained further in testimony:

  • The assessment to be paid from the dioceses to the Church Center remains at 15 percent of net income, but the amount exempted from assessment was increased from $140,000 to $200,000. The change reduced the Church Center’s income by nearly $1 million, but will be especially helpful to small dioceses.
  • Staff raises at the Church Center will continue at 3 percent annually. This amount is below the current inflation rate, but has been above inflation in recent years.
  • The budget assumes a continued 5 percent draw rate from endowment funds. The sharp downturn in financial markets in 2022 will begin to reduce the money available from this source in 2024.

Understanding the implications of the budget is never an easy lift, but has been especially difficult because the normal pattern of three-year budgets was interrupted, replaced by a one-year budget for 2022 and a two-year budget for 2023-24. Each of those budgets includes the expense of a General Convention, while the church ran a substantial surplus in its 2019-21 budget because no General Convention was held in 2021.

“I’m still not entirely sure what I voted on in terms of the budget,” one deputy said later, while discussing a different resolution.

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