Financial Picture Poses Difficult Choices
Financial Vice-President's Report
Volume CII, No. 10October, 2002
Nineteen ninety-five was a landmark year for Local 802. That February, the union hired Jon Bogert as controller and assigned him the tasks of developing an in-house accounting system and a budgeting process. For the first time in the union’s history, we had a budget projection and timely financial information on a monthly basis. They have given us the ability to see where we have been, where we are now, and where we are heading financially.
In our role as managers, the three officers must constantly make decisions on spending priorities that will maintain and improve services to existing members as well as providing the resources to organize new members. This year we face a projected General Fund loss of $250,000 on the heels of an actual loss in 2001 of $114,000. The numbers indicate that some difficult decisions must be made.
The union’s income, which comes primarily from dues, is not keeping pace with expenses. If the amount of employment in the music business were growing, or even holding steady, work dues would increase as scales rose and Local 802 would not have the financial problems it now confronts. In 2001, recording work dues income was $1,038,000, down to a level last seen in 1998. The same is true for Broadway, where dues income was $963,000 in 1998 and $934,000 in 2001. In the first six months of 2002, total work dues have declined by $158,000. (See Bogert’s report, here, for additional analysis of the budget numbers for the first six months of 2002.)
Given that our expenses continue to increase, we must begin to look at ways to balance costs with income. We have only three ways to achieve that balance – reduce staff (our greatest expense), bring in more members and more filed contracts, which our organizers and business reps continue to do, or raise dues.
While the officers have decided not to lay off staff at this time, we have instituted a hiring freeze combined with attrition of staff who leave the union for other reasons. So far this year this has resulted in the loss of one recording rep, one clerical employee, one supervisory employee (who is moving to a part-time position) and one organizer (who is moving to a supervisory position).
In terms of increasing membership rolls and contracts, our organizers and business reps continue to work diligently. Nonetheless, our membership is declining.
Finally, the question of increasing dues remains. While we look at this option with great reluctance, we will not be able to continue operating effectively without an increase in income. The last annual dues increases went into effect in 1995 and 1996 – $10 in each of the two years. Our expenses have risen since then and will continue to rise. We cannot keep pace if dues remain the same. The last increase in work dues was a half-percent increase in 1984. Your elected officials will need to explore possible increases in both annual dues and work dues in the not-too-distant future.
While these are difficult issues for all of us to face, our ability to look ahead with some degree of certainty, as the result of the work of our controller, is an important achievement. The ability to plan for the future, however painful that future might appear, will assist us in maintaining the financial stability to provide the services our members deserve and expect, and to continue organizing unorganized musicians and work.