Struggling with budgets, dioceses get creative

Catholic dioceses nationwide have struggled with layoffs, downsizing and budget cuts in recent years.

While the cutbacks sometimes can be traced to clergy abuse-related lawsuits, this is not usually the case. According to several diocesan representatives, reasons more often include a slower economy, changing demographics and higher costs. A slow economy may prompt younger workers to leave rural areas in search of jobs in big cities outside a diocese. This leaves an older, retired generation with less disposable income who make smaller contributions. Higher employee costs, such as those attributed to health insurance, were cited as a key factor as well.

Our Sunday Visitor spoke to five dioceses of varying sizes and in different regions of the country about how budgetary concerns have affected their day-to-day spending and what creative steps they’ve taken to maintain their ministries despite having fewer people on staff.

Rising costs

The Archdiocese of Chicago became the latest in a series of Catholic dioceses in the United States to announce that it was resorting to layoffs because of revenue shortfalls. Cardinal Francis George announced in February that the archdiocese will eliminate 70 employees — 60 through layoffs and 10 through positions not filled — to help erase a $40 million annual budget deficit.

According to Archdiocese of Chicago Director of Finance Kevin Marzalik, revenue has remained constant in recent years while costs have risen. He pointed to two factors: increases in staff salaries and benefits, and a greater need to provide financial grants to struggling parishes and schools.

In order to maintain ministry effectiveness, the 619 staff members currently employed in the chancery’s two pastoral centers will have to absorb the duties of those laid off. The archdiocese also is offering financial education programs to help parishes run more efficiently.

Rebuilding trust

One of the hardest hit dioceses in terms of layoffs was the Diocese of Yakima in central Washington state, which serves 80,000 registered Catholics with 50 priests. In 2009, 16 chancery employees were laid off — more than half its staff.

“Quite frankly, we had lost control of our budget to the point where we were looking at an annual operating deficit of $900,000 with another $2 million owed to parishes,” said Msgr. Robert Siler, chancellor. The diocese’s annual budget today is $3 million, and with the recent addition of four positions, today employs 17.

“We’ve had a lot of work to do rebuilding trust with our priests and people, demonstrating to them that we’re managing our funds wisely and getting them to feel good about the work we’re doing at the chancery,” he told Our Sunday Visitor.

Msgr. Siler said that investment losses were the chief reason for the 2009 budget crisis and ensuing layoffs. The diocese also serves a region that has some of the state’s poorest communities, he added, with little disposable income to contribute to the Church.

In order to adjust costs, the diocese also had to eliminate a ministry for gang members. As a solution, it asked priests to lead outreach ministries to gang members on a volunteer basis.

“We looked at our priests’ skills and talents and tried to match them to opportunities we had,” Msgr. Siler said.

One late vocation, for example, had worked for decades as a public school teacher before becoming a priest. He became superintendent of Catholic schools, overseeing the diocese’s six schools.

Additionally, after the arrival of Bishop Joseph J. Tyson in 2011, the diocese launched a “Bishop’s Founder Circle” to raise money for seminarians and priest retirement, as well as other initiatives.

“Bishop Tyson believes ‘money follows mission,’” Msgr. Siler said. “If you lay out a good vision for the diocese, people will contribute to it.”

Difficult decisions

The Diocese of Springfield, Mass., saw major cuts to its staff in 2010. Forty-nine positions were eliminated — or approximately one-third of its workforce ­— in the face of an annual deficit of $5 million. The cuts were spread throughout the chancery, with ministries combined within departments. The diocese also has closed many of its parishes; 123 were open in 2004 versus 81 today.

The cuts came after a review of diocesan finances with pastors and parishioners, said Mark Dupont, secretary for communications.

“Those discussions led to some difficult decisions, brought on by our increasing financial challenges. We were burning through our reserves to patch annual deficits,” Dupont said.

Much of Springfield is rural, he said, with business operations increasingly being transferred to the nearby (although outside of the diocese) big cities of New York and Boston. Younger workers left the diocese for the cities in pursuit of those jobs, leaving a population that Springfield Bishop Timothy A. McDonnell has described as “increasingly older and poorer.”

To combat these tough times, the Springfield chancery changed its guiding philosophy to what Bishop McDonnell describes as “one of resource and referral as opposed to direct program operation and support.”

The diocese also has used more volunteers. An annual diocesan woman’s conference, for example, previously was organized by a paid layperson at the chancery. When that person was laid off in 2010, responsibility for the conference was transferred to a religious sister juggling other duties. The sister, in turn, found volunteers to take over the organization of the conference, enabling it to continue.

“Sister has been able to empower volunteers at the parish level to organize and run programs that the chancery staff previously did,” Dupont said.


The Diocese of Pittsburgh employs 160 people at its chancery and has an annual budget of $21 million. Twenty-three positions were eliminated throughout the chancery in 2012, many through an early retirement incentive program. The cuts were prompted by the slow U.S. economy, explained Fred O’Brien, the diocese’s chief financial officer.

“We feel as if this recovery’s barely gotten off the ground, and we’ve felt it at our parish level, too,” he said.

O’Brien added that aggravating the slow economy were the demographics of Allegheny County in which the diocese is located.

“We’re one of the country’s oldest counties, and we have a lot of elderly people,” he said. “We knew we were looking at having a period of flat to declining income.”

O’Brien said that the chancery downsizing has been combined with a diocese-wide “strategic reorganization,” which included, for example, creation of a new secretariat for leadership development. This position was responsible for the training of volunteer lay diocesan leaders.

Supporting ministries

In the Diocese of Oakland, Calif., no new staff has been added since 12 positions were eliminated in 2010. The chancery currently employs 75 people, and operates within an annual budget of $18 million. According to diocese spokesman Mike Brown, the cuts were not due to revenue problems, but the costs of its new cathedral center as well as increased employee benefits. The staff reductions have not affected the parishes or schools, he said.

Surprisingly during this time, the annual Bishop’s Appeal has seen a significant growth, Brown added, from $1.6 million in 2010 to $2.3 million in 2012.

“Our communication to parishioners has been more effective about how they are supporting diocesan ministries with their donations,” he said. “Like most dioceses, we have always relied on a heavy lay volunteer cadre as advisers, committee members and the like. That certainly continues to be the case.” 

Jim Graves writes from California.