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The Baltimore Sun last week found that at least 115 Maryland churches have illegally contributed to political campaigns since 2000. The same day, The Washington Post reported on allegations of misappropriated funds in the Orthodox Church in America. Meanwhile, Roman Catholics in Boston, already outraged over charges of clergy sexual abuse, are still seething over the local archdiocese's decision to close and consolidate several parishes.

With such news stories and other perennial questions about the use of congregational funds, observers say the debate over requiring the disclosure of church finances isn't going away.

It has, however, suffered a major setback. The Massachusetts House rejected legislation January 25 that would have required religious organizations to file financial reports with the state. The bill was overwhelmingly defeated in the House by a 147-3 vote after passing in the Senate last fall.

The legislation would have required churches, synagogues, and mosques to file the same financial disclosure forms with the state that are required of other nonprofit organizations. Any organization with annual revenues of more than $500,000 would have needed to hire an independent auditor to file detailed financial reports every year.

Though the bill would have applied to all religious groups, the chief sponsor of the bill, Sen. Marian Walsh said frustration with the Massachusetts archdiocese sparked the creation of the bill. Lawmakers and lay Catholics have demanded more information from the archdiocese as it settled civil suits from the clergy sexual abuse crisis and closed several parishes.

"The incredible irresponsible events of one of the largest public charities were the genesis of this bill," said Walsh, a Democrat. "People want the books opened up. I just think it's going to take more time."

Walsh said she is not discouraged and will consider other future legislative efforts to require financial transparency.

Hard news can make bad law, says Charles Haynes, senior scholar for the First Amendment Center. "I think it's a big mistake to use a crisis like the sexual abuse crisis in the Catholic Church or any church as an opportunity to limit religious freedom," he said.

But the Massachusetts bill wasn't only about frustration with the Boston archdiocese, Haynes says. In recent years, the government has demonstrated an increased desire to treat religious groups in the same way it treats other groups. That, he says, is dangerous.

"Our framers of the First Amendment understood that religion is different," he said. "It needs special protection from governmental interference. To interfere with the internal affairs or to entangle government in financial affairs, the great danger is that we will lose religious freedom."

Still, Haynes says, it's likely that bills similar to Walsh's will be introduced in other states.

"I don't think it's going to go away at all," Haynes said. "With the strong Roman Catholic population in Massachusetts, it may be easier in other places to pass such legislation."

Such legislative initiatives may also get more traction when introduced apart from touchy issues like clergy abuse scandals and church closings. Jan Masaoka, executive director of Compass Point, a consulting and research organization that works with nonprofit organizations, said church disclosure laws may be most attractive to lawmakers looking for increased government revenue. Forcing church financial books open may reveal taxable revenue that's not core to church missions, for example.

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March (Web-only) 2006, Vol. 50