The Associated Press

LOUISVILLE - Despite paying millions to settle a slew of sex-abuse lawsuits last year, officials with the Roman Catholic Archdiocese of Louisville say finances are steady.

"It's been a hard year," said Steve Bogus, executive director of Catholic Charities, one of the agencies whose budget was reduced after the June 2003 settlement.

But Brian Reynolds, its chancellor and chief administrative officer, said the archdiocese never seriously considered filing for bankruptcy after the $25.7 million settlement.

Since the fiscal year began on July 1, officials have managed to avoid cuts - and employees even received a 3 percent raise.

"Agencies overall were able to continue their work with reduced budgets and reduced staffs," Reynolds said.

Bogus said his agency lost the equivalent of 7 1/2 positions last year, which "has been pretty stressful." But, he said, "there's a lot of dedication and commitment on the part of staff to try to keep things together."

The archdiocese avoided bankruptcy by paying for the settlement to 243 plaintiffs from its unrestricted investments, but that left the church without the interest income that it used to receive.

Other large Catholic dioceses haven't been as lucky.

The Archdiocese of Portland, Ore., filed for bankruptcy on July 6, after paying more than $50 million to sexual-abuse victims. It is believed to be the first Catholic diocese ever to file for bankruptcy. The Diocese of Tucson, Ariz., is considering bankruptcy.

"I'm amazed (the Archdiocese of Louisville has) been able to dodge that bullet," said Chuck Zech, author of several books on church finances.

Zech, a professor of economics at Villanova University in Pennsylvania, said Boston's and other hard-hit dioceses have also avoided bankruptcy by cutting staff and selling properties.

But the Louisville archdiocese has a tough financial road ahead, officials admitted.

Reynolds said parish income - ranging from donations to tuition - rose slightly last year, as did stock-market returns on the archdiocese's remaining investments, which are restricted for specific purposes.

But a separate fund drive, the Catholic Services Appeal, has fallen nearly 9 percent short of its $3 million goal, he said.

Catholic Charities - one of 20 agencies of the archdiocese - is looking for outside grants to restore one or two positions.

But the archdiocese itself is not restoring any positions this year, Reynolds said.

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Information from: The Courier-Journal, http://www.courier-journal.com