Financial Woes

The Roman Catholic Diocese of Scranton recorded a second-straight year of approximately $7 million in losses, according to a financial report released Thursday.

The fiscal year 2008 report, published in the diocesan Catholic Light newspaper, revealed a bleak picture of both past and future finances for the 11-county diocese. The regional church saw a $7.1 million decrease in net assets last year. It was particularly burdened by the loss of $4.8 million in the value of its investments, echoing the strain of falling financial markets felt throughout the national economy.

In a letter accompanying the report, Bishop Joseph F. Martino called the diocese’s financial condition “deeply worrisome” and said that “extreme measures” will be necessary to balance the budget for the current fiscal year ending in June. He directed all departments to find ways to reduce their current budgets, and added that “it may be necessary to eliminate some important programs and reduce staff” as a “last resort.”

The bishop said he is particularly troubled by a $640,000 operating deficit — compared to a $1.4 million operating surplus in fiscal year 2007 — because it is “the one area we have the most control over.”

Several factors contributed to the decline in income, including the fact that the diocese collected $643,000 less in its 2008 annual appeal than it had the previous year, despite spending $33,000 more to administer the fund drive. The diocese also received $180,000 less in donations and bequests than it had in 2007.

A change in the priests’ pension plan contributed to the diocese’s fiscal year loss and cost the diocese $1.2 million in 2008. The diocese also declared $475,000 in bad debt, mostly loans to struggling parishes that cannot be repaid.

Signs of financial strain were evident throughout the Catholic Light on Thursday, which also reported that this year’s diocesan annual appeal is still $1 million away from meeting its $5.3 million goal. Diocese spokesman William Genello said that “this is the time of year when the appeal is typically winding up,” but that donations will be accepted as they continue to come in.

The diocese is sending letters this week to all area Catholics who have not yet donated to the fundraising drive, and parishes that have not reached their individual goals are being asked to conduct phone-a-thons to call parishioners who have not made a donation.

The Catholic Light also announced that it is changing its format and circulation method to save costs. The newspaper will be sent to those who donate to the annual appeal instead of being distributed according to parish quotas to people on long-standing but “outdated” parish mailing lists. Starting Feb. 5, the newspaper will also switch from a broadsheet to the smaller tabloid format.