This time of year, the board's focus is on the budget. The temple operates on a fiscal year of July 1 through June 30.

The budget reflects who we are and what programs and services we want to offer now and in the future. We can take great pride in the wonderful work and events that Temple Micah offers and in our tremendously talented and devoted staff. It was not happenstance that Newsweek Magazine recently named Temple Micah one of the 25 most vibrant Jewish congregations in America (and Micah was the only membership-based shul in the Washington metropolitan region on that list).

If you have been following Temple Micah's finances, you know that we have been facing annual deficits for a number of years. In previous reports and presentations, we have described this as a "structural" deficit. This term suggests that the cause of the deficit is not a decrease in income in any given year, but a reflection of an imbalance between reasonable projections of our income and the costs of operating the Temple Micah we know and love. In recent years, the deficit has been measured in the tens of thousands of dollars. Given the current recession, and the cumulative effect of annual deficits, our shortfall is projected to grow this year, and correspondingly our reserves are being depleted.

Let me quickly emphasize that we are not teetering on the brink of insolvency and will not need to seek federal bail-out funds (although they certainly would be welcome). But, our budget deficit is a serious problem that we, as an entire community, need to confront. Failure to do so will soon impact who we are and who we want to be as a community. At this year's "Ask the Rabbi" session on Yom Kippur, someone asked Rabbi Zemel what his perfect congregation would be. His response, and here I paraphrase, was Temple Micah without the financial constraints. That should be our aspiration.

Treasurer Joel A. and I have put together a few salient points on our budget:

Our total annual operating budget is about $1.25 million dollars. On the income side, 74 percent comes directly from dues and 12 percent from religious school tuition. The balance comes from special gifts or fund-raising programs, such as the auction. The board and the staff also review potential grants for additional sources of funding. We are hopeful, for example, that we will receive a grant that will cover part of Rabbi Esther Lederman's salary.

Nearly three-quarters of our expenses are salaries and benefits. Approximately 57 percent of our budget is devoted to pulpit and administrative staff costs. When we include the personnel costs associated with our religious school, that figure increases to 72 percent. Our salaries are by no means excessive in the market. Micah has made decisions over the years as to what kind of community we want to be, the nature of our worship and the services we want to offer, and these people and positions are central to our ability to achieve that objective, to thrive and to grow.

Approximately 7 percent of our budget goes to pay the mortgage on the initial construction of our building. (The expansion was built using funds from the capital campaign. We obtained a short-term loan, which will be paid-off as pledges are paid over the next few years.)

Some 17 percent of our budget pays for our education programs, the largest component of which is the personnel cost. About two-thirds of the cost is covered by tuition and grants, leaving approximately $55,000 to be paid from our operating budget. It is usual and customary at synagogues for a large portion of education costs to be borne by general operating funds.

Approximately 4 percent of our budget pays for our membership in the Union for Reform Judaism.

The balance of the budget, approximately 15 percent of the total, is used for everything else, including worship services and other programs, office supplies, utilities, cleaning and building maintenance.

Over the past several years, the board has worked to eliminate as much "fat" as possible from the budget, and the board and staff have searched for grants and third-party funding to help offset costs. But still the deficit persists and we simply will not be able to reach a balanced budget solely through the reduction of expenses. We need to look at the income side of the balance sheet.

So, where do we go from here?

As always, we would ask that each of you carefully consider the dues form that was delivered recently. As you complete the form, please consider your commitment to Temple Micah and its meaning in your life. Please consider whether you can increase your pledge from last year's amount. Please also pay all of your outstanding pledges and other commitments as soon as they become due, or earlier if you are able to comfortably do so.

We are also looking at whether we can use the newly expanded building to generate new sources of income. For example, if you are planning a life-cycle event, consider holding the function at the temple. We are also re-examining other potential uses of the building that might serve both to strengthen our community and enhance our balance sheet.

We also need to look beyond our existing membership to address this structural deficit. As I mentioned in my high holiday remarks, we need to modestly grow our membership. Presently, we have about 440 households. Our projections suggest that our structural deficits would be eliminated if we were to grow to about 500. At that level, our income and expenses would be closer to break-even. Please help spread the word to your friends and family about our wonderful community.

[By Bill Nussbaum; from June 2009 Vine]