Should Congress Change Pastors' Housing Allowances?
Since the conclusion of Sen. Charles Grassley's (R-Iowa) financial investigation of six large televangelism ministries, the Evangelical Council for Financial Accountability (ECFA) has been chosen to lead a commission responding to Grassley's eight remaining questions about ministry finances, including "Should there be specific guidelines controlling pastoral housing allowances?" The current tax code excludes the rental value of a home from pastors' taxable income.
"In the paradoxical Christian spirit that a little sacrifice by some assures a more abundant future for all, reductions could reflect typical mortgage deductions by phasing out the allowance for pastors who make more than the typical American while leaving the allowance for the rest."
Gary Moore, founder, The Financial Seminary
"There should be a needs limit on the housing allowance. Some pastors are near the poverty line, but it's hard to justify the head of the National Cathedral in Washington, who makes big money, to have a housing allowance as well and not be taxed on it."
Pablo Eisenberg, senior fellow, Georgetown University Public Policy Institute
"Many might see it as a governmental subsidy or incentive of sorts for religion that is not similarly available for secular tax-exempt entities. The housing-related costs of ministers are no more deserving of housing subsidy assistance than the costs of nonprofit executives."
Rick Cohen, National Correspondent, Nonprofit Quarterly
"Since 1921, clergy have depended on this income tax benefit, but Sen. Grassley's staff has raised questions as to whether a limit should be the amount of the housing allowance and whether a minister should be permitted to exclude expenses for more than one home."
Dan Busby, president, ECFA
"I'm all for saving tax money, but I do see the legal complication of giving tax breaks just to ministers, structured the way it is. A lot of ministers depend on it, and I don't want pastors to suffer. I hope it's retained, but at the same time it's hard for me to find reasons why it should be."
Gene Edward Veith, provost, Patrick Henry College
"It would lead to fewer paid-ministry staff positions and more reliance on 'high capacity volunteers' to run the church. We would probably have to narrow the scope of some ministries. This would be especially true in smaller campuses where budget dollars are already at a premium."
Glenn Wood, administrator, Seacoast Church
"Repeal of the allowance would have tremendous financial shock waves on the funding of ministries and missionaries. Churches would have to take from discretionary funding to make up the difference to offset the tremendous financial burden placed upon pastors."
Brad Dacus, president, Pacific Justice Institute
"The courts have consistently upheld the constitutionality of state and federal grants and loans that flow to clergy and ministerial students attending seminaries. Why? Because the beneficiary is the individual, not 'religion.' The housing allowance is similar."
Richard Hammar, editorial adviser, Church Law and Tax Report
"Ministers have done their financial planning and purchased homes based upon the tax law as it has existed for decades. The loss of this benefit could drive some ministers and their families, especially those from small churches, into foreclosure and/or bankruptcy."
Simeon May, CEO, National Association of Church Business Administration
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Other articles on pastoral allowances in Christianity Today and its sister publications include:
Case Threatens Pastor Housing Allowances | How a California court may alter a long-standing ministry benefit. (YourChurch Blog, September 28, 2010)
Bottom-Line Training: Checking Your Pastor's Housing Allowance | If a pastor incurs more housing allowance than what he's been given, can the board grant him more? (Church Finance Update, July 25, 2008)
A Parsonage or Housing Allowance—Which is Better? anfred Holck, Jr., contrasts the viewpoints of pastors and congregations. (Leadership Journal, April 1, 1980)
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