Catholic
Education Quiet revolution in school finance
By JOSEPH CLAUDE HARRIS
Its hard to identify a recent
force in American Catholicism, from the Latino ascendancy to the pastoral
consequences of urban sprawl, that hasnt hit Los Angeles first. In that
sense, what happens in Americas largest Catholic archdiocese is an
important indicator of future trends for the rest of the church.
People interested in Catholic education would do especially well
to pay attention.
On Jan. 9, 1999, over 100 parish and diocesan leaders in Los
Angeles met to consider the financial future of their schools. What they found
is that the system of funding for their parish elementary schools has moved 180
degrees from the original design of total community subsidy promulgated by
American bishops 116 years ago.
The leaders of the American church originally intended Catholic
schools as a project of the entire parish congregation to which they were
attached. At the Third Plenary Council in Baltimore in 1884, the bishops
directed that near every church a parish school, where one does not yet
exist, is to be built and maintained in perpetuum within two years of the
promulgation of this council.
This funding model of total support by the parish included the
contributed services of religious and whatever was necessary from the Sunday
collection to pay school bills.
In recent years, however, parish support of elementary schools in
the United States has dropped off considerably from the model of complete
subsidy. In 1995-96, an average parish that had a school attached paid about
one-fourth of the schools bills, amounting to a subsidy of $164,398.
This trend is even more pronounced in Los Angeles, where Catholic
elementary schools actually require no subsidy whatsoever from the parish to
which they are attached. In fact, elementary schools in Los Angeles have paid
their own way since at least 1991, when these schools needed only an average
annual subsidy from the Sunday collection of $6,250.
At the January 1999 meeting, Los Angeles parish and diocesan
leaders met in an atmosphere of full fiscal disclosure to discuss the
implications of this rather astonishing reality. The diocesan school office
provided participants with a research paper titled Paying For Parish And
Elementary School Programs. The paper considered several financial
questions about school and parish operations:
- How do principals find the money to pay bills?
- Do parishes in Los Angeles operate with a financial
surplus?
- If yes, where do they spend the extra cash?
Answers to these questions furnished a context for discussion of
the policy implications of the present situation in Los Angeles. Dr. Jerome
Porath, the superintendent of the Los Angeles Catholic school system, asked his
leaders to consider over a period of several subsequent meetings what the
parish fiscal connection to education should be ideally.
In this article I will outline answers to the three questions
posed in the paper I prepared for the Los Angeles conference. I will also
suggest a model for a fiscal relationship between a parish and K-12 religious
education and school programs of all sorts.
First, the facts: Los Angeles elementary schools cost about as
much as any parish elementary school west of Chicago -- $658,937 for 1995-96
compared to $649,937 as an average for all Western states. Since parishes in
the region subsidized schools an average of $120,747, Los Angeles school
leaders obviously found ways to replace the missing sum.
It probably comes as no surprise that school managers looked to
parents to make up the difference. An average parish in the Western region
charged tuition totaling $416,375; Los Angeles Catholic parents paid a total of
$516,071. The additional $99,696 in tuition replaced most of the missing
subsidy. The remaining dollars needed to balance the school budget came from
increased fundraising efforts.
If you happen to be an economist, these above average costs might
cause you to worry about a possible enrollment decline. After all, normal
demand-supply curves suggest that purchases of a product dwindle when prices
rise. Interestingly, however, enrollment in Los Angeles elementary schools has
remained relatively stable despite increasing tuition, probably for two reasons
that skew normal economic analysis.
First, rising cost placed additional, but apparently not
insurmountable, fiscal burdens on participating households, amounting to 12
percent above the regional average for tuition and 16 percent more than typical
for fundraising. In addition, the baptized elementary population in Los Angeles
is growing at a substantial pace. The number of baptized elementary students
increased from 572,010 in 1990 to 615,611 for 1995; in the year 2000 there will
probably be 729,275 baptized elementary-age students. Thus the increases in the
school-age population in Los Angeles seem, for the moment, more than enough to
offset sizeable, but still manageable, increases in cost.
A second question concerns the fiscal condition of parishes. Is it
possible that parishes in Los Angeles dont subsidize their schools
because they simply dont have the money? In fact, Catholic parishes in
Los Angeles generated a total cash surplus of $214.7 million or 11.9 percent of
revenue between 1990-91 and 1995-96.
Left alone, this sentence might qualify as a lead to a National
Enquirer exposé lambasting rumored Catholic church riches. The fact of
such a surplus, however, should not shock anyone since the average cash surplus
margin for American congregations -- Protestant, Catholic, Jewish -- in 1991
was 15.6 percent. Within the Catholic community, parishes in Baltimore,
Cleveland and Chicago operated with respective surpluses of 12 percent, 17
percent and 1 percent between 1991 and 1994. Los Angeles leaders managed parish
programs with a surplus margin typical of many other parishes in the
country.
So, the fact that Los Angeles parishes take in more money than
they need to pay the bills is not a surprise. But given that none of the extra
money goes to the schools, it begs an obvious question: What are the parishes
doing with it?
The key question to ask is how the financial condition of parishes
changed between 1990 and 1996. Parish managers put their additional fiscal
resources to work in a variety of directions. In the category of current
assets, cash reserves grew by $17.5 million while investment balances increased
by $42.8 million. In plain English, that means that parishes put some of their
extra money into the bank or the stock market.
Parishes also purchased land for $13 million and equipment for a
total of $15 million. In addition, parishes increased construction in process
from a relatively small total of $1.1 million in 1990-91 to a total of $18.9
million for 1995-96. Since the number of parishes and schools remained
unchanged, parish managers generally used surplus cash to bolster savings
accounts and refurbish or add to existing buildings and equipment.
Parish managers thus seem confronted with a dilemma. Education
programs need fiscal support, but at the same time buildings must be
constructed and people hired to serve growing and increasingly diverse parish
communities. Current levels of surplus cash arent enough to do both. The
bottom line, therefore, is that parishes in Los Angeles are choosing to spend
their money on direct parish needs, largely letting the schools take care of
themselves. We are witnessing in Los Angeles, therefore, the exact opposite of
the system envisioned by the Council of Baltimore more than a century ago.
This system works so long as economic conditions remain favorable
and the market for Catholic education stays strong. At some point, however, one
or both of these factors will change, and Catholic leaders need to be
ready.
How? One idea is the concept of an education voucher funded by a
concerted effort to increase Sunday collections. Such a voucher system would
call for a public commitment on the part of the parish community to offer
financial support for all parish religious education programs. The program
would also be equitable since necessary funds would be offered to all students
in the parish who registered for the school.
A parish religious education voucher could work as follows:
Parishes would offer fiscal support to every K through 12 student
who registered for the parishs religious education program or school. In
the case of a school, the support would have to be sufficient to bring tuition
charges more in line with averages charged in other dioceses in the Western
United States. Students in parish schools might receive a voucher for $250 to
use as partial payment of tuition bills. These vouchers would cost an average
parish that sponsored a school approximately $112,000.
For a parish religious education program, the voucher must provide
funds adequate to hire a full-time professionally trained staff to support the
thousands of lay and religious volunteers who presently teach the 224,000
students registered in parish religious education programs in Los Angeles. A
voucher of $100 for every student in a parish religious education program would
require an average commitment of about $81,000 for every parish in the
archdiocese.
The total additional burden to a parish that sponsored both a
school and a religious education program would be, on average, $193,000. Where
would that money come from?
Catholic households in Los Angeles contributed an average of $101
annually in the Sunday collection in 1995-96. Household collections in Chicago
totaled $267 for the same period. Los Angeles parishes presently pay their
bills with a household effort that is only 38 percent of the contribution made
by Catholic households in Chicago. Parish managers in Los Angeles could follow
the U.S. bishops injunction to challenge their congregations to give more
in the collection, especially if the added funds happen to be targeted to
support a religious education voucher program for all registered Catholic
students. An increase in the Sunday collection to an average annual household
contribution of only $150 would provide sufficient resources to fully fund the
religious education voucher program proposed in this essay.
This is of course only one idea. We have in Los Angeles a
wonderful laboratory for working out the policies that will take Catholic
education into the future. It will be fascinating to watch leaders in the
archdiocese make the necessary decisions.
Joseph Claude Harris is chief financial officer for the St.
Vincent de Paul Society in Seattle. He is the author of The Cost of
Catholic Parishes and Schools (Sheed & Ward, 1996).
National Catholic Reporter, March 24,
2000
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