Media Statement from United Methodist Bishop John Schol – Jan. 8, 2021

January 8, 2021

Ready to take on the next big challenge

GNJ is poised to move forward with a new budget and plan to increase reserves from $10 million to $65 million over the next 13 years. The plan will position GNJ for long-term ministry in the midst of challenging times.

GNJ has worked through significant challenges in the past, 2008 financial crisis, Superstorm Sandy, COVID-19 and in each of these instances, GNJ has come back stronger and with a deeper sense of mission.

The next challenge is a $6 million budget gap and the spending down of $10 million in designated reserve funds.

Following an extensive review of GNJ’s accounting records by GNJ’s new CFO/Treasurer Robert Zuckerman and others, it has been determined that there is an approximate $6 million shortfall in our budget. This shortfall is a result of years of underbilling congregations for clergy and lay employee benefits and property insurance and drawing on reserves to meet this deficit.

For instance, the gap between what churches were billed for health insurance and the actual cost to GNJ for health insurance was more than $6,000. Designated program reserves and property sales were used to make up the difference in the underbilling. Unknown to conference officials, GNJ used $10 million of $21 million of ministry designated reserves and property sales to supplement congregations’ payments for property insurance, health insurance and other benefit programs.

It is important to note that all clergy pension and health insurance, and all congregations’ property insurance is paid in full and all payments are up to date. No one’s pension, benefits or property insurance will ever be compromised.

Over the last three weeks, a team of GNJ leadership has been reviewing GNJ’s finances to understand GNJ’s financial position. Based on what they found this past week and to minimize the impact on our churches, GNJ will not hire six open positions and laid off seven staff members, not for performance reasons but to balance the budget.

The leadership has developed a plan to balance the budget, rebuild the reserves and assist churches over five years to meet the full costs of clergy and lay employee benefits.

The report on GNJ finances, a plan to balance the budget and rebuild the reserves, a staffing plan and legislation for the scheduled January 22, 2021 Special Annual Conference Session are available on our website. The plan was developed by a team of leaders and has been reviewed by the Conference Council on Finance and Administration (CFA), Board of Pensions, Board of Trustees and the Cabinet.

An independent team that includes a lawyer and forensic auditor will review the use of reserves and other financial matters to identify what occurred and how it occurred and report directly to the May 2021 Annual Conference Session with recommended actions to be taken.

With God’s help and by working together, we will overcome this challenge. I ask that you pray for the staff who have been laid off and for the leadership as they lead us through the challenge.

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