Record Vatican Deficit of $56 Million Expected

Dismissing public notions of “presumed Vatican riches,” the council of cardinals on Roman Catholic Church finances Thursday forecast a record Vatican budget deficit of $56 million for 1986, after a $39-million deficit for the previous year.

The cardinals said the deficits could not be shaved by belt-tightening economies because the Holy See and Vatican City are already operating on austerity budgets. They called for greater contributions from faithful Catholics to bridge the gap.

The Vatican deficit has grown every year since Pope John Paul II ordered that a limited version of the hitherto secret budget be published annually. According to church sources, he decided to release the figures in part to banish the myth that the church is sitting on fabulous wealth.

‘Artistic and Cultural’

“The presumed Vatican riches are, in fact, for the most part of an artistic and cultural nature, not separable (from the Vatican), and they constitute a treasure for the whole of humanity,” the council of cardinals said Thursday in its budget statement.

Vatican City is rich in artworks, many of them priceless, that have been collected or given to the church over the centuries, but they have no bearing on the cost of the Holy See’s day-to-day operations, which must be met out of stock and real estate investment returns, tourist income and contributions.

The cardinals said the highest single expense in 1985--54% of the total budget--was the salaries and retirement benefits of the 2,281 employees of the Holy See and the 1,195 employees of Vatican City. The budget supports 113 nunciatures (diplomatic offices) abroad as well.

The cardinals said that 1985 income, apart from the annual offering that the church calls St. Peter’s Pence, totaled $44,571,689, against expenses of $83,710,369. The deficit was partially covered by donations of $28,491,364.93 in Peter’s Pence, the annual donation of Catholics the world over to help defray the expenses of the Holy See.

They said the remainder of the deficit will have to be met by drawing down some of the church’s shrinking invested capital, which is used to generate income for current expenses.

Small Surplus

The one bright spot in the statement was a small surplus in Vatican City income, reported separately from that of the Holy See. The city-state earns substantial sums from the sale of stamps, gifts and museum admissions. In 1985, the panel of cardinals reported, Vatican City income reached $41,140,643 against outlays of $40,994,040, leaving a surplus of $146,603.

Speaking of the church’s shrinking investment capital, the panel expressed “profound concern for the insufficiency of the patrimony of the Holy See.” They said that progressive erosion of the patrimony forced the Holy See to depend more heavily than ever before on contributions.

The limited budget statement did not include the activities of the Vatican Bank, officially called the Institute of Religious Works, which agreed two years ago to pay $250 million “in recognition of moral involvement” in the collapse of Banco Ambrosiano of Milan in 1982.

According to Britain’s Financial Times, the payment “has placed considerable strain on Vatican Bank’s liquidity and has forced the bank, which is run by (American) Archbishop Paul Marcinkus, to sell property assets and shareholdings.”