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Asking Project Update

Convention

March 9, 2024

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Where we are now on the Asking Project

  • We’ve held 3 Convocation meetings, reaching over 60 people
  • We have heard numerous concerns and received several suggestions for improvement
  • We have devised several specific alternatives using these suggestions
  • We will show the results for several options using actual parish incomes for 2022
  • Final recommendation will be presented at 2025 Convention

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What We Heard

  • The current apportionment system is a burden for small parishes
  • But some of the largest parishes feel they are paying too much
  • Bracket levels should be adjusted for inflation
  • Consider excluding some amount of income to help smaller parishes
  • Consider forgiving a substantial amount of income like national EC
  • Specifically assess invested capital (e.g., endowments)
  • Consider other statistics in asking formula (e.g., attendance)
  • Do not include assistance to parishes as income (use Line A)
  • Consider averaging income over 3 years to smooth out the bumps

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Modeling options

  • In exploring various options, keep total the same
    • Means we need to adjust rates as we make other changes
  • Goal is to find a plan that most feel is “fair”
  • Steps (options):
    1. Start with inflation adjustment of brackets (apparent consensus)
    2. Adjust rates to maintain total
    3. Introduce a new lower bracket to more evenly distribute parishes
    4. Try reducing rates for smaller parishes while raising others enough to cover
    5. Address largest parishes’ concerns by reducing rates at very high levels

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Inflation (Options 1 and 2)

  • CPI has increased by a factor of 1.82 since levels were set (2000)
  • Without changing rates, income is ~$30K below present level
  • Adjusting rates fixes income, but no help to small parishes

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Bracket

Option 0�Present

Rate

Count

Option 1�Inflated Levels

Count

Option 2�Rates�Adjusted

1

$75,000

11.5%

11

$136,500

23

11.8%

2

$125,000

12.5%

9

$227,500

4

13.0%

3

Larger

13.5%

18

Larger

11

14.0%

Total Ask

$907K

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$879K

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$908K

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New Lower Level (Option 3)

  • Option 3 introduces a new 10% rate for parishes with less than $65K income
  • Other levels same as Option 2 (inflation) rates maintain income
  • Helps small parishes explicitly, but bigger increases at high end

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Bracket

Option 0�Present

Rate

Count

Option 3 Add Low Levels

Adjusted Rates

Count

1

$75,000

11.5%

11

$65,000

10.0%

11

2

$125,000

12.5%

9

$136,500

13.0%

12

3

Larger

13.5%

18

$227,500

13.8%

4

4

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Larger

14.5%

11

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High End “Cap”(Option4)

  • Option 4 rationalizes the levels – each is 2x the former
  • Above the top level, the rate reverts to that of Level 2
  • Average “effective” rate 11.6%�(range 10-13.6%) versus …
  • Current effective avg. is 12.1%�(range 11.5-13.3%)

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Bracket

Option 4 Levels

Rates

Count

1

$65,000

10.0%

11

2

$130,000

13.0%

10

3

$260,000

14.0%

8

4

$520,000

14.5%

8

5

Larger

13.0%

1

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Results, Option 4

  • For parishes below $65K, asking is 13% less than present system
  • Smaller reductions up to about $200K
  • Above $200K asking increases gradually to 4%, then declines above the cap

Income

% Change

Eff. Rate

$30,000

-13%

10.0%

$80,000

-8%

10.7%

$130,000

-2%

11.8%

$300,000

2%

13.1%

$500,000

4%

13.7%

$800,000

1%

13.4%