Federal Appeals Court Saves Ministers’ Housing Allowance
The median church in America has 75 regular participants on Sunday mornings. It’s difficult to pay a pastor a living wage—let alone what his college and likely post-graduate degree would call for—plus maintain the church premises and engage in community ministry with the tithes and offerings of the average congregation.
So, I was relieved (along with thousands of churches and pastors across the nation) to see the Unites States Court of Appeals for the Seventh Circuit uphold the constitutionality of the ministers’ housing allowance, aka “parsonage allowance,” in Gaylor v. Mnuchin. The minister’s housing allowance is a federal tax rule that allows a pastor to claim part of his salary as exempt from federal income tax in order to pay for housing, utilities and upkeep of his residence. This affords the small church the ability to hire pastors at a lower salary than the market would otherwise suggest.
The Freedom from Religion Foundation, an atheist/secularist organization that views almost every public benefit to religion as unconstitutional, brought the lawsuit challenging the ministers’ housing allowance. Surely, they argued, a federal tax statute that provides such an exemption must violate the First Amendment’s Establishment Clause because it subsidizes religion!
The court, however, didn’t see it that way. Tax exemptions for churches in American history even precede the 16th Amendment, passed in 1909, that allowed Congress to levy an income tax. The housing allowance has secular purposes such as treating ministers equally to secular employees (other occupations historically received similar housing allowances), keeping the government from excessive entanglement with religion, and to avoid discriminating between pastors who have their parsonage provided by the church, and pastors who must find and pay for their own living arrangements.
And, as a practical matter, it keeps churches functioning by providing an easy way for cash-strapped congregations to support their pastors.
I know, because I’ve been there. I took a serious pay cut when I left my legal job with a nonprofit organization and entered full-time church ministry. For seven years as an associate pastor at a small church, the faithful struggled to meet the financial support of two pastors plus everything else in the ministry requiring financial outlays. Both my church family and I benefitted from the use of the housing allowance.
The allowance, though a small benefit, helped. Now that I’m no longer in church ministry, I can appreciate the need for the allowance as a matter of public policy. Our nation’s churches meet the needs of the neighborhoods in which they are located in a way that no government program could ever achieve. The housing allowance is a no-brainer way of helping to make that happen.
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ABOUT THE AUTHOR
Bruce Hausknecht, J.D., is an attorney who serves as Focus on the Family’s judicial analyst. He is responsible for research and analysis of legal and judicial issues related to Christians and the institution of the family, including First Amendment freedom of religion and free speech issues, judicial activism, marriage, homosexuality and pro-life matters. He also tracks legislation and laws affecting these issues. Prior to joining Focus in 2004, Hausknecht practiced law for 17 years in construction litigation and as an associate general counsel for a large ministry in Virginia. He was also an associate pastor at a church in Colorado Springs for seven years, primarily in worship music ministry. Hausknecht has provided legal analysis and commentary for top media outlets including CNN, ABC News, NBC News, CBS Radio, The New York Times, the Chicago Tribune, The Washington Post, The Washington Times, the Associated Press, the Los Angeles Times, The Wall Street Journal, the Boston Globe and BBC radio. He’s also a regular contributor to The Daily Citizen. He earned a bachelor’s degree in history from the University of Illinois and his J.D. from Northwestern University School of Law. Hausknecht has been married since 1981 and has three adult children, as well as three adorable grandkids. In his free time, Hausknecht loves getting creative with his camera and capturing stunning photographs of his adopted state of Colorado.
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