NEW ORLEANS (BP)–New Orleans Baptist Theological Seminary announced significant budget cuts during a meeting attended by the seminary faculty and staff Jan. 19.
Seminary President Chuck Kelley called the meeting in response to the deepening worldwide economic downturn and its effects on Southern Baptists, their churches and the Cooperative Program.
“We learned in December that New Orleans Baptist Theological Seminary would be seriously affected as well,” Kelley told the assembly. “It appears our total income from the Cooperative Program, tuition, gifts and investments will be more than $1 million less than we anticipated.”
Kelley announced six steps the seminary is taking to decrease expenses and weather the tough economic times.
“All these adjustments are very difficult,” he said. “Every employee, including me, will be negatively impacted in some way.”
The budget cuts include adjustments in medical benefits, temporary salary reductions; temporary adjustments in faculty teaching loads, intentional reductions in campus energy consumption; a freeze on non-essential operating expenses; and a hiring freeze.
While the reductions were significant, no employee layoffs were announced at this time. The budget adjustments take effect Feb. 1.
“We have made our decisions in light of the same basic principle we followed in responding to the Katrina disaster,” Kelley said. “Our guiding principle is the preservation of employment necessary to accomplish our mission.”
The adjustments in medical benefits include a change in staff eligibility for insurance and changes in the deductibles for all faculty and those staff members who remain eligible for medical benefits. Changes in staff eligibility for medical benefits will primarily affect student employees taking more than one class per semester and employees who have a spouse taking more than one class per semester. Kelley said those affected by this change will receive a raise of 50 cents per hour to help offset the loss of benefits. According to Kelley, Guidestone Financial Resources representatives will work with affected employees to find alternative medical coverage.
Kelley’s plan also calls for a 5 percent salary reduction for all faculty and staff members except those who lose medical coverage. The salaries of senior administrators will be reduced by 7 percent. Kelley will receive a 10 percent reduction in salary.
“Restoration of full salaries is a high priority and will be done as soon as possible,” Kelley said.
Temporary teaching load adjustments will be made for all faculty members. Kelley said three hours will be added to the base teaching load and three hours will be added to the maximum load. Kelley said the temporary increases in teaching loads will be in place for at least 18 months.
Kelley called on seminary cost centers to control energy consumption and freeze all non-essential operating expenses. These non-essential expenses, he said, include purchases, travel and professional development. Such reductions, along with the hiring freeze, should balance the budget and stem any further cuts, Kelley said.
The overall meeting was followed by two smaller question-and-answer meetings, one for faculty and a second for seminary staff.
Kelley closed the informational meeting with a reminder for the seminary family.
“We have to hold the reality of the difficulty of these adjustments that we’re making in one hand,” Kelley said. “But as we hold these in our hand and seek to understand what we’re going to do with these circumstances, we need to realize that God gave us two hands.
“I am in no way trying to minimize these decisions. I am not trying to divert your attention from the challenges,” he continued. “But I must talk to you about this other hand. In this other hand, we also have the sufficiency of the grace of God.”
Whenever God places challenges in one hand, He will always fill the other hand with His mercy and grace, Kelley said.
Kelley pointed to God’s provision for the seminary in the past as evidence for His faithfulness.
“If there’s anybody on earth that has been prepared for such a time as this, it ought to be this ‘School of Providence and Prayer,'” Kelley said. “When Hurricane Katrina put the city and the seminary under water … God was enough to see us through. He will do so in these times as well.”
To date, the North American Mission Board, two other SBC seminaries, Woman’s Missionary Union and LifeWay Christian Resources also have announced budget cuts.
On Jan. 15, Southern Baptist Theological Seminary announced it will reduce its administrative staff by 35 positions (20 full-time and 15 part-time), effective Jan. 30, but that no faculty members would be released. The downsizing, combined with $1.7 million in travel and other budget cuts made in December, are designed to close a projected $3.2 shortfall in the seminary’s $30 million budget. Tuition for the 2009-10 academic year will increase by just under 10 percent according to current projections, akin to the tuition increase for the current academic year. Work will continue on capital projects that already have been contracted and funded, but no new projects will begin until economic conditions improve.
On Jan. 8, NAMB President Geoff Hammond asked NAMB team leaders to operate at 90 percent of their approved budgets during 2009. However, Hammond said funds committed to God’s Plan for Sharing (GPS), the denomination-wide evangelism emphasis, would not be affected. State cooperative budgets also will operate according to normal state funding practices.
Southwestern Baptist Theological Seminary in Fort Worth, Texas, announced Dec. 16 that it will be cutting its budget by approximately 10 percent, or $3.5 million to $4 million. Among reductions being made to the budget are “temporary suspension of many overseas travel programs and adjustments to campus facilities.” SWBTS President Paige Patterson was quoted in a seminary news release as saying, “The administration is doing the best it can to find ways to cut spending that do not involve the release of existing faculty or the students employed by the school.” The news release then stated that Patterson “went on to say that current economic trends would make this goal difficult to achieve.”
On Dec. 10, Woman’s Missionary Union announced it was enacting measures to reduce its 2009 budget by $1.4 million. Some of those steps included reducing team expense budgets in areas such as travel, projects and activities; implementing four weeks unpaid furlough for each staff member between January and August 2009; a hiring freeze on vacant positions; reducing employer contributions to retirement plans; freezing merit pay increases; and eliminating incentive bonuses in 2009. The organization’s revised budget for 2009 is $9.6 million.
On Aug. 1 of last year, LifeWay Christian Resources President Thom S. Rainer told employees the ministry was reducing its workforce by 5 percent and cutting expenses throughout the organization. He cited the pinch of economic tough times leading to lower discretionary spending by consumers, resulting in lower-than-projected revenues for LifeWay, which receives no Cooperative Program support and is completely funded through the sale of its resources. Those whose jobs were deleted received severance pay, some benefits and outplacement services. In addition, a number of employees were able to take advantage of retirement benefits.
Gary D. Myers is director of public relations at New Orleans Baptist Theological Seminary. Baptist Press editor Art Toalston contributed to this report.