“It’s just very difficult,” says Father Tom, pastor of Flint’s St. John Vianney Parish. “If what happened in Flint had happened in the same time span as Hurricane Katrina, we’d be getting aid from all over the country. Because it happened over 20 years, nobody notices. But it’s a disaster. Trust me.”
Blue-collar industrial cities such as Flint were among the first and hardest hit by a financial storm that includes a slumping auto industry, plunging stock market and volatile fuel prices.
In recent months, what some call the worst fiscal crisis since the Great Depression has swept rapidly across Michigan, the country and the globe, leaving massive destruction in its wake.
Tough times have touched most people in the 10-county Diocese of Lansing. Many have lost jobs, homes or money from retirement or college savings accounts. Still more fear for their financial futures – and their families – on a daily basis.
Perhaps most unsettling is the grim forecast. In December 2008, the national unemployment rate surged to a 16-year high of 7.2 percent. Meanwhile, Michigan’s was the highest in the nation at 10.6 percent, with four counties in the diocese – Genesee, Hillsdale, Lenawee and Shiawassee – some of the hardest hit.
President Obama has proposed a nearly $1 trillion economic stimulus plan, including tax cuts and major investments in America’s infrastructure, designed to create three million jobs in the next three years. Yet, many economists predict the country’s recession will stretch well into 2009.
“The biggest unknown is the duration,” diocese financial officer Tom Pastula said. “How long will this last? What happens to the auto industry in Michigan? There’s a lot of concern out there. We’ve had pinches in the past, but this is uncharted territory. The decline is significant. You can tell this is really getting to people.”
Predictably, pocketbook problems have carried over to the collection plate. Parish giving historically increases between 2 percent and 2.5 percent each year, Pastula says. But an informal survey in December showed the diocese’s parishes were on track for an average decrease of about 1 percent this year.
The diocese also is struggling. Roughly two-thirds of its annual operating budget (which totaled about $7.4 million in the current fiscal year) comes from a general appeal for funds – the Diocesan Services Appeal, or DSA. This year, the campaign fell about $250,000 short of its goal.
Pastula says the current deficit was reconciled mainly through the recent closing of the DuKette School in Flint, the elimination of about $40,000 in donations to Catholic Charities agencies in the diocese and reduction of work hours for diocese staff.
The 5 percent funding cut will create challenges for the Catholic Charities agencies, which offer a wide variety of ministries, including counseling, adoption and foster-care services, and provide help with basic needs.
The eight agencies – which served almost 90,000 people in 2007 – used the money mainly to cover the cost of providing services to people who cannot afford to pay for them, according to Chris Root, chairman of the Department of Catholic Charities.
“We’ll have less flexibility now to fill in those gaps,” Root says. “As needs are rising, our dollars are reduced. We’re trying to make the most of what we have.”
In the coming year, the diocese plans to trim another $700,000 from the budget, mainly by reducing staff hours and asking employees to take on a greater share of health-care costs, Pastula says.
“We’ve never tried to budget for this much of a decrease,” Pastula says. “This (crisis) will affect more of what we do and how we do it than any other economic shock we’ve had in the past. It’s hard, because a lot of the activities and ministries we offer are in greater demand.”
Slumping tax revenues mean Michigan’s state government faces an immediate $200 million deficit that economists predict could top $1 billion by 2010 unless spending cuts are made.
The struggles center, of course, on the auto industry that’s supported the state for more than a century. General Motors Corp. and Chrysler LLC needed billions of dollars in emergency federal bridge loans to avoid bankruptcy and are scrambling to restructure their business plans and labor contracts to stay afloat. Ford Motor Co. did not take loans, but sought a credit line from the U.S. government and was restructuring to help offset slumping sales.
Building cars helped build Michigan’s middle class and provided widespread prosperity for decades. But the state’s long reliance on auto-related jobs and failure to diversify economically and intellectually have resulted in deeper and more prolonged suffering, University of Michigan finance professor David Brophy says.
“This is what we’ve reaped,” says Brophy, who is a parishioner at St. Mary Student Parish in Ann Arbor. “We got a heck of a ride out of the auto industry. It supplied the Michigan lifestyle: A boat, two shotguns, two salmon rods and a place near Traverse City. And we loved it. But now it’s gone – or going.
“Now, we’re in the era of high technology and there are people who can’t even spell those words. Fixing this is like trying to turn the Queen Elizabeth around with a canoe paddle.”
Michigan has plenty of resources to attract new industry, including a wealth of engineering talent, manufacturing might and central geographic location, Brophy says. The key is using those assets to carve a new niche such as renewable energy or building the lithium-ion batteries for plug-in hybrid electric cars.
The state can’t count on President Obama’s New Deal-like stimulus plan to save the day, Brophy says.
“A little push start is fine,” he says. “But how long do you want to be the kid propelling the wheel down the road with the stick?”
Instead, Brophy says, long-term fixes must come from the same intrepid entrepreneurial spirit that’s fueled Michigan industries from the fur trade to lumbering and automobiles.
“You’ve got to earn your way out of these things. We let ourselves get into it by drifting for many years when we could have been getting into other industries. Now we want to fix it overnight. That’s not going to happen. We’re now in a nationwide and global recession. Everybody is hanging on to everything they’ve got.”
That’s true throughout the diocese, which includes car towns such as Flint and Lansing and countless employers related to the auto industry.
“We have to come together,” says Father Tom, who is navigating a $250,000 deficit at St. John’s parish elementary school. “We have to be willing to help each other and the church has to take the leadership in doing that. We have to stretch ourselves as much as we can financially in these tough times.”
Financial advisors such as Ted Zale have spent several months fielding the same question from clients shaken by Wall Street’s plunge:
“Should I keep investing right now?”
Zale, a vice president at Morgan Stanley, gives the same answer every time.
“I tell everyone the same thing I told them in 1987, 1990 and 2001 – just because the market is down doesn’t mean you should sell everything and get out,” Zale says. “The prudent investor is looking at his funds and looking at the best avenue to place dollars back into the market. If we’re at the bottom, then all the money will be made when the market ratchets back up. Opportunity is there.”
Zale is careful to offer two exceptions to his advice:
1. Don’t continue to invest at the expense of your mental health. “For those so skittish they truly can’t stand to see their balance go down one more month, they should put their money in a money market account,” he says. “I don’t advise that, but if you can’t stand the heat, get out of the fire.”
2. Don’t keep pouring cash into college savings accounts if your son or daughter needs the money in one or two years. “In that case, your investments need to be liquid. You’re better off in a fixed-income product as a short-term CD.”
If you are facing tough times and need assistance, your Catholic Charities agency can help.
• Catholic Charities of Lenawee 517.263.2191
• Catholic Social Services of Washtenaw County 734.971.9781
• Catholic Charities of Shiawasee and Genesee Counties 810.232.9950
• Catholic Social Services of Livingston County 517.545.5944
• Catholic Charities of Jackson 517.782.2551
• St. Vincent Catholic Charities, Lansing 517.323.4734
When the need to feed Lansing soared, Mayor Virg Bernero called on the local faith community for help.
The response was overwhelming. Roughly 30 churches, including Immaculate Heart of Mary Parish, united to form the Church of Greater Lansing Project and meet a 32 percent increase in demand at Lansing’s food banks.
Together, the churches raised money to feed 2,000 people in the city. On Jan. 18, hundreds of Christians gathered at Lansing’s Eastern High School, unloaded boxes of food from semi-trucks and delivered it to homes around Lansing.
“It was like nothing we’ve done before,” says Father John Byers of Immaculate Heart of Mary. “It’s a good sign that the Holy Spirit is working in a powerful way to meet the needs of so many people really struggling right now.”
The project was spearheaded by Trinity Church, a nondenominational church in south Lansing. The city’s Christians are committed to stepping across traditional denominational boundaries to spread the love of Christ and care for the poor, Father John says.
“This was just the beginning,” he says. “We’ll build on this with a number of initiatives. That’s what’s exciting to me.”
The church isn’t the only charitable organization struggling to raise cash.
The Capital Area United Way, which contributes money to charities in Clinton, Eaton and Ingham counties, reports that dollars are disappearing due to the economic crunch.
This year, Capital Area United Way distributed about $1.8 million to a wide variety of programs. But as of January, the group’s annual fundraising campaign was running about $500,000 behind its pace from the previous year.
On the surface, Michael Draminski has many reasons to feel miserable.
The Lansing-area man is Exhibit A for the hardships created by the current economic crisis. Once a mid-level manager in the title insurance industry, Mike has lost two jobs in just over two years due to corporate downsizing. As of January, he was still searching for work to help support his wife, Lynda, and their two children.
But financial struggles have not broken Mike’s spirit. In fact, the 44-year-old Michigan State University graduate calls his trying circumstances a blessing.
“I’m hard pressed to say any negatives have come out of it,” says Mike, who worships at Lansing’s Immaculate Heart of Mary parish. “This has certainly helped me realize I can be happy, if not happier, with less.”
Mike was stunned in September 2006 when he was one of several employees let go without warning by
LandAmerica Financial Group, a now-bankrupt firm where he’d worked for about 10 years. After several months of searching, Mike landed a similar position in Canton. But he was laid off again in June 2008.
Despite holding a bachelor’s degree and boasting a wealth of industry experience on his resume, Mike has yet to find a new job. His Catholic faith, however, has helped calm fears about the future.
“I have a peace about it that I can’t explain other than to say I’ve grown much closer to God than I’ve ever been in my life,” Mike says.
Mike began serving on Immaculate Heart of Mary’s stewardship committee about the same time his job troubles started. The experience shaped his perspective on the treasures, time and talents we receive and give back to God.
“I recognize God has always taken care of me and he always will,” Mike says. “If he wants me to have to have a job, I’d dare somebody not to give me one.”
Thanks to a recent extension of unemployment benefits, Mike continued in January to collect a much-needed $640 every two weeks. That money and income from Lynda’s job at a title insurance company enabled the family to make ends meet.
“We’re barely paying the bills, but we are paying them,” Mike says. “We’re still paying our tithe and doing so happily.”
Luxuries such as eating out and going to movies are gone. Paying for Christmas was a challenge. But the Draminskis have discovered that life without the extras many middle-class families take for granted delivers perks that can’t be purchased.
Mike, for example, was able to spend a memorable summer at home with his son, Sam, 13, and daughter, Grace, 10.
“The situation has brought us closer as a family,” Mike says. “We talk about God as our provider more than we ever did. We talk about being thankful and how we can show our gratitude.”
These scenes from the front lines of the war against poverty in Flint are all too common for Sister Carol Weber and her colleagues at the St. Luke North End Women’s (N.E.W.) Life Center.
“It’s extreme poverty and it’s not just a concept,” says Sister Carol, who has ministered in Flint for about 25 years. “It’s real. It’s true. I’ve seen it.”
Sister Carol and Sister Judy Blake are leading a fierce fight to help people survive the economic misery that’s consumed Flint for many years.
About five years ago, they launched the N.E.W. Life Center, which provides a wide variety of support, including life skills education and job training, for at-risk women and children. Headquartered in a former Flint elementary school, the center offers a three-year program designed to help single mothers by boosting their self-esteem, improving their health and landing jobs that eliminate the need for pubic assistance.
Each Wednesday, women are transported to the center to learn skills such as sewing, knitting, cooking, cake decorating and using a computer.
“The goal is to help them get jobs, although that’s almost impossible in Flint right now,” Sister Carol says. “But we’re training them so that when the economy lifts a little, they can go into the work world.”
N.E.W. runs an after-school program for the women’s children, providing help with homework and an evening meal. The center also operates a food pantry, a literacy program and a weekly street ministry that provides basic necessities to people in surrounding neighborhoods.
“The problems are overwhelming,” says Sister Carol, who along with Sister Judy, worked at St. Luke Parish before its recent merger with St. John Vianney. “But in my prayers, God encourages me to help who I can. That’s what he is calling us to do.”
The N.E.W. Life Center’s annual operating budget of about $150,000 is funding largely through a federal grant and assistance from individual donors, though it has received support from individual parishes and a small grant through the Diocese of Lansing.
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