Deficit Tripled, Los Angeles Archdiocese Says
By Barbara Whitaker
New York Times
January 25, 2003
LOS ANGELES, Jan. 24 — The Roman Catholic Archdiocese of Los Angeles, which cut 60 jobs and pared numerous programs last year in an effort to bridge a $4.3 million budget gap, has released figures showing that the deficit has more than tripled.
Officials of the archdiocese, the largest in the country, now project that the deficit for this fiscal year, which ends on June 30, will reach $13.4 million. One-time costs, including settlements resulting from sexual abuse lawsuits, accounted for $7.7 million of the estimated shortfall. In addition, the diocese said, the operating deficit has grown to $5.7 million, a $1.4 million increase. The total budget is $43.4 million.
"Various options are being considered to address the projected deficit, such as the use of reserves," the diocese said in Thursday's report. "The impact of any action is contingent, in part, on the outcome of the current litigation facing the archdiocese."
About a dozen lawsuits claiming child sexual abuse by members of the clergy, including a class-action suit, are pending against the archdiocese, and lawyers representing people who say they have been abused say there may be many more cases.
"We've made the Los Angeles Archdiocese aware of the existence of a couple hundred victims," said Raymond P. Boucher, who represents more than 200 people in the class-action suit he filed last summer.
The diocese says it has paid out $3.5 million for such litigation costs since 1985, with insurance paying an additional $4 million to $5 million. While the cost of future litigation remains uncertain, the diocese is estimated to have about $150 million in insurance coverage.
The archdiocese's financial disclosure comes as lawyers for the church and victims have been meeting to discuss how to proceed with the cases and examine the potential for settlements.
Mr. Boucher questioned the timing of the diocese's release of the information.
"I don't think it is coincidental," he said. "It's designed to help them develop some sympathy for the position they want people to think they're in. It's all about suppressing these cases."
Tod Tamberg, director of communications for the archdiocese, said the reports were issued annually.
"As to those who would say the church is trying to look as poor as possible, the audited report is there," Mr. Tamberg said. "There's nothing hidden."
From 2001 to 2002, the archdiocese's assets fell to $626.4 million, from $643.7 million, according to the report. Much of the decrease was in investments that lost value or were sold to cover operating expenses. At the same time, the archdiocese has seen insurance and pension costs rise.
"The church is subject to the same market forces as other nonprofit organizations," Mr. Tamberg said. "Economic conditions have not been good and are unlikely to improve in the near-term."
The budget covers the church headquarters, and it finances departments that provide pastoral support to parishes, schools, seminaries and other institutions in the archdiocese. Individual parishes, the new Our Lady of the Angels cathedral, as well as schools, hospitals and other institutions, have their own budgets.
Although the archdiocese will have to reduce administrative costs, Mr. Tamberg said, it has not determined whether more layoffs will be necessary.
Pledges were down about $7.6 million. Officials said that was because fund-raising for the new cathedral came to an end and noted that giving was increasing at the parish level. Donations in local parishes rose by more than $5 million in fiscal year 2002, to $153.8 million, from $148.6 million in 2001.
"I think that's an indication that Catholics continue to remain strongly rooted in their faith and their local Catholic communities," Mr. Tamberg said.
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