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	June 10, 2003 ..................... LCMSNews -- No. 46

	Synod spending plan cut
	12.5% to $77.5 million

	Directors discuss ideas for halting continually declining
revenues

	By David L. Mahsman

	As anticipated, substantial cuts once again were the order of
the day as the Synod's Board of Directors adopted a 2003-04 spending
plan that totals some $77.5 million -- $11 million less than the Board
budgeted a year ago.

	Besides adopting a budget for the fiscal year that begins July
1, the Board at its May 15-17 meeting also discussed measures to address
the continuing trend of declining revenue and provide future funding for
national and international ministries.

	The budget discussion itself focused on allocating
"unrestricted" income, funds largely from Sunday-morning offerings
passed through the districts. The Board had some $23.9 million in
unrestricted funds with which to work -- down more than $1 million from
a year ago.

	The Board's budget also provides a $2.9 million surplus in an
attempt, said Chief Administrative Officer Brad Hewitt, "to start
building toward the Synod again having a positive net worth." The Synod
currently is operating at a deficit.

	Hewitt said that all program areas will receive fewer
unrestricted dollars in the new fiscal year than in the current year.

	What about the future? The Board is considering more than one
proposal to address the continuing decline in income.

	Most discussed to date has been a proposal dubbed "Funding the
Mission." It would encourage congregations to take an active role in
determining how their funds should be spent -- such as for district
mission projects, international mission work or church-worker education.
Other Synod functions, such as communications, theology and church
relations, synodical officers and utility bills, would be funded by
allocating a percentage of every direct-giving contribution made.

	But the Board asked Vice President-Finance/Treasurer Tom Kuchta
to bring to its August meeting "a proposal that would result in all
money contributed by congregations being deposited with the national
Synod and then allocated to the districts and other ministries of the
Synod."

	Currently, funds contributed by congregations go first to their
respective districts, which then decide how much to forward to the
national Synod.

	One or both of the two approaches to future funding being
discussed by the Board are likely to be brought to next year's
convention, Hewitt said.

	In another move to deal with declining revenue, the Board voted
to "prepare a plan for reallocating the assets of the Synod to meet
future needs and to manage its liabilities more wisely." Steps include:

	* evaluating all assets -- including those of its districts,
schools, agencies and other entities;

	* determining which "may be liquidated to pay off long term
unsecured debt and/or transferred to other institutions or entities to
make them financially stronger and better able to meet the Synod's
objectives according to its Constitution";

	* convening discussions on asset reallocation with leaders of
districts and other entities; and

	* developing a strategy for reallocating the Synod's assets.

	In a separate action, the Board asked Kuchta to look into ways
to reduce occupancy costs at the Synod's International Center building
in suburban St. Louis. It said that factors including a weakened economy
and reduced occupancy "have combined to make the occupancy cost at the
LCMS International Center unbearably high."

	As for the immediate future, those units taking the largest cuts
in unrestricted funding are LCMS World Mission, the Board for Higher
Education and the Board for Communication Services.

	In the case of missions, the cut was not made by the Board of
Directors but by the mission board itself. While the mission board
originally requested $6 million in unrestricted funds, it reduced its
request to $4.2 million, which the directors let stand.

	LCMS World Mission Executive Director Robert Roegner told the
Board of Directors that the reduced request is in line with the mission
board's strategic plan that will depend more heavily on partnerships
with mission societies, congregations and others. "We are standing here
before you and saying that we can do more with $7 million less," Roegner
said, referring to the mission board's total budget from all sources.

	Roegner told the directors that the new budget could call for
additional reductions in its staff and mission fields. He said, however,
that no decisions will be made on any cuts until the mission board sees
the results of an "LCMS World Mission Pentecost Offering" announced last
month.

	Dr. William Meyer, executive director of the Board for Higher
Education, said that the BHE/Concordia University System "received every
dollar we asked for except the $1 million that we thought should be set
aside for the Risk Endowment Fund," a fund he said is required by banks
to support letters of credit at various institutions.

	Still, the BHE will be down more than $2 million from the
current fiscal year. Meyer said that the "most significant cut" will
come in no longer subsidizing half of the insurance cost at the Synod's
colleges, universities and seminaries. "I suspect this decision will
have its toll over the years," he said.

	The Board of Directors requires most of the $8.2 million it
allocated to the BHE/CUS to go toward principal and interest payments on
Synod-guaranteed loans at the schools. The directors also told the BHE
it must give $350,000 next year to the Synod's two seminaries.

	Two positions with the Board for Communication Services staff
are likely to be eliminated, said BCS Executive Director Tom Lapacka.

	The Board adopted a requirement that the Synod's "Reporter"
newspaper be continued "at its current level." "Reporter" has been
responsible for about half of communications' $1 million unrestricted
budget, which the directors reduced to $850,000.

	Operational control of Synod-owned radio station KFUO, which
since 1986 had been a BCS responsibility, was taken over by the Board of
Directors in February. The Board approved $325,000 to fund the radio
station's current deficit.

	In other business at its May meeting, the Board:

	* concurred with the BHE to grant Concordia University, River
Forest, Ill., permission to sell property it owns contiguous to the
campus in order to pay down debt obligations to the Lutheran Church
Extension Fund and the Concordia University System.

	* appointed attorney Heidi Abegg of Alexandria, Va., to a
vacancy on the Concordia Publishing House Board of Directors.

	* resolved to begin discussions with the Board of Managers of
the Worker Benefit Plans (WBP) to include the Plans' revenue and
expenses in the Synod's financial statements. Treasurer Kuchta told the
Board that the WBP is not a corporate entity separate from the Synod.

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