The Clergy Housing Allowance

Warning: this is a very “inside baseball” kind of piece, relevant only to clergy and those interested in issues of clergy compensation.

On Friday, a Federal District Court judge, Barbara Crabb, ruled that the housing allowance afforded to clergy is unconstitutional. This set off a long discussion in the United Methodist Clergy Facebook group, but I got a chance to read through the decision, and I thought I’d share my thoughts on what this decision means and how it might impact the United Methodist Church and other denominations.You can read Judge Crabb’s full decision here.

The decision rested on a few principles that appeals courts will need to deal with. The first is the issue of “standing” – who can sue in a case like this? This case was initially dismissed because the plaintiffs, the Freedom From Religion Foundation, are not affected by the law – they did not suffer injury by not having a housing allowance. But, the judge allowed a broader understanding of this, since to force them to try to claim the housing allowance and then get rejected by the IRS would needlessly add time to the lawsuit. This argument may get tossed on appeal – the FFRF sued in this same court with this same judge regarding the National Day of Prayer, and the judge’s argument that they did have standing was tossed by the Seventh Circuit Court of Appeals. But, assuming the argument that they do have standing to bring the lawsuit remains (Judge Crabb relies on a better Supreme Court precedent specifically addressing a religious tax exemption in this case), the merits of this case do not bode well for the future of the housing allowance.

The central argument is that this respects the establishment of religion, a violation of the First Amendment. Under “the Lemon Test,” a law respects the establishment of religion if it 1) has no secular purpose, 2) its primary effect advances religion, or 3) it fosters an excessive entanglement with religion. This case argued that the housing allowance violates 1 and 2. In short, it is a housing arrangement only provided for clergy, who by nature must be religious, even when it is religion that can be non-theistic like Unitarian Universalism, and so it has no secular purpose and advances religion. The government (the defendants in this case) argued that the law is actually necessary in order to prevent excessive entanglement with religion.

To understand this argument, we need to look at the history of the housing allowance. When the income tax was first passed, one of the things that was put in place was an idea that you shouldn’t have to pay tax on the rental value of housing provided for the convenience of an employer. So, for example, if you are the live-in caretaker of a camp, you don’t have to pay the IRS something on the value of the “income” you receive in the form of free housing. It’s not cash you took in, and you really didn’t have much of a choice but to live there in accepting the job. This doctrine was naturally expanded to church-owned parsonages, but there is a multi-factor test to determine whether housing is for the benefit of the employer (and under this test, a parsonage right on the main church property would qualify, but a parsonage a few blocks away likely would not). Congress in 1921 decided that this was prying too much into the business of churches to apply this test, and so exempted parsonages entirely, without needing to substantiate whose benefit it is for. Later, in 1954, the code was amended to also include cash housing allowances, on the grounds that to only exempt parsonages was to discriminate in favor of certain church polities and of more established churches.

However, the cash housing allowance becomes tenuous when you realize that this concept of trying to stop discrimination against smaller, less-established religions only applies to religion and doesn’t serve a secular purpose or have a secular counterpart law, and so likely violates the establishment clause of the first amendment. A “less-established” camp in the example above which hasn’t been able to afford to build a caretaker’s residence can’t pay its employees a cash housing allowance tax-free, even if its competitor has well-established housing arrangements for its employees.

All of this to say, I think Judge Crabb is right, but I am not a lawyer or a judge, so she could get overturned on appeal. The cash housing allowance is a benefit afforded only to religion, and it could very likely fail constitutional muster when all is said and done. So, what does this mean for the United Methodist Church?

Well, for that answer, we need to return to the case. One important thing to note is that while the cash housing allowance was ruled unconstitutional, the exemption for parsonages was not. It was not considered because of the standing issues I notes above, and this one is harder to get around – the plaintiffs don’t live in employer-provided housing, and so it really doesn’t affect them. However, for the reasons I explained above as to the origin of the housing allowance, the parsonage exemption has a much stronger line of reasoning supporting it: to apply the complex employer-provided housing test currently in place would lead to excessive government entanglement in religion. So, for purposes of this post, I’m going to assume that the parsonage exemption is legal and will be upheld in the long-run, and the housing allowance is not and will not be upheld in the long-run.

The United Methodist Church is an itinerant ministry. And because of this, I believe (though I haven’t been able to find any hard data to confirm this) that we likely own more parsonages per capita than any other Protestant denomination. Most other denominations assume the pastor will be there for a while, and the benefits of home ownership are the same as anyone else who accepts a job assuming they will be there for a while. United Methodist clergy are appointed for one year a time, and though we may stay for a while longer than that, we can be moved at any time. Since it takes about five years to really start to build any equity in a home, it can be a risky move for a United Methodist pastor to buy a home, because he or she can be moved in a few years and then take a big financial bath in the process if he or she bought a home. So, in many cases, it makes more sense for the pastor to live in a parsonage. However, the consistent growth of real estate values through much of the 2000s led many pastors and conferences to encourage use of the housing allowance so that pastors could buy houses and benefit from the growth of equity in their home. This has slowed down since the real estate bust, but there still seems to be a sense that the housing allowance is financially more beneficial to the clergy person (even though this may not really be the case for a shorter appointment).

However, if this case stands, I think we might see a significant shift back to the parsonage. Without the tax-free housing allowance, the risk for a UM pastor buying a house becomes that much greater. There’s no way to get around it: should this stand, it will cost clergy money – we will pay more in taxes if we don’t live in a parsonage. But similarly educated professionals like teachers also have to pay this same amount of taxes because they’ve never been afforded a housing benefit. As hard as it is, we’ve been blessed with this tax benefit for many years, and now we will need to begin living within the same constraints as our laity.

It might even be positive for our polity in some ways. First, it will eliminate some of the confusion our laity have in how we are compensated. One of the biggest challenges in setting clergy compensation is that it is very different from compensation of laity. I know pastors who have been accused of being tax cheats because they use their housing allowance to its fullest (and perfectly legal) extent. If we can’t get a tax-free housing allowance, it’s much easier to do an apples-to-apples comparison. Second, if parsonages were back in vogue, it could make clergy moves easier. The move process becomes that much more complicated when multiple clergy-owned houses are in the mix – in our polity, an appointment change happens in such a way that we may preach a farewell sermon on one Sunday, move, and then the following Sunday, preach our first service at a new church. Buying and selling a house in the middle of all of that can really limit our effectiveness during the transition.

Of course, it will also bring challenges, the biggest of which is our retired clergy, who made plans based on their retirement income coming in the form of tax-free housing allowance (All annual conferences declare retiree pension payments to be a housing allowance). If the ruling stands, clergy today will know that they need to plan for retirement housing. Retired clergy don’t have the time to change their financial planning, and are the least likely to be able to afford this. This will be something we have to address as a denomination. And we as clergy who have enjoyed the preferential tax treatment will have to tighten our belts (I will be among those who would need to tighten my belt – live under a housing allowance and so have greatly benefited from the tax savings), but we need to remember that our laity have had to live under these rules for much longer than we have.

Bottom line, I don’t think our tax-free housing allowance will last much longer. We’ve got to learn how to live off of the same rules as our laity. Which brings me to a final point – the Social Security issue. Clergy are considered self-employed for Social Security purposes, which means we have to pay (currently) 15.3% of our income (including housing allowance or fair rental value of paronsage) toward Social Security. I think it’s a very logical argument to make that treating clergy as self-employed rather than employees would also be just as problematic as the housing allowance issue (but that’s a different part of the tax code, and so would require a different lawsuit), but I would also argue that it really wouldn’t make that much of a difference. If we were employees, our church would have to pay 7.65%, and we would have 7.65% taken out of our paychecks in FICA like other employees, and so the total paid, 15.3%, wouldn’t change. But more than likely, if our church had to pay that cost, our compensation would likely decrease to cover the cost – not many churches can afford to give a 7.65% raise to all of its clergy, and so a switch to employee status would just change the bookkeeping, not our take-home pay.

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Canceling Church for Mission

This recent article found via the United Methodist News Service highlights a practice I’ve seen a number of churches doing in recent years: canceling Sunday morning worship and replacing it with mission in the community (I am not singling out this particular church, other than the fact that this is the most recent article I’ve seen. This has been going on at various churches for at least a decade as far as I can tell). I don’t doubt the good intentions behind these movements, and I am sure good, meaningful ministry in the name of Christ is done by trying to do church differently. I am sure some have come to join churches and have become faithful disciples of Christ through this ministry. However, I think the practice is problematic for several reasons.

Sunday is the Lord’s Day in Christianity, and it has been the day where the church gathers together for Word and Table for as far back as we can determine; Acts 20:7 describes the gathering together of the church community on the first day of the week, and we see throughout church history the regular gathering of worship. To replace worship of the triune God through proclamation of God’s Word as revealed in the Scriptures of the Old and New Testaments with mission in the community suggests a few things that unintentionally undermine both mission and worship:

First, mission and worship are not compatible. In order to do the most good, we need to cancel church to get our faith into the community. Our worship won’t serve the poor or do the poor and needy any good, so we are better off doing service outside of our church.
Second, worship doesn’t do good for our community, and so we need to cancel it every now and then to show our usefulness to the community.
Third, worship doesn’t matter, at least not as much as social service. In the article I linked above, the pastor said this, “Instead of doing church, we went to be the church,” which suggests that regular corporate worship of the church is not being the church.

I worry we set up such a dichotomy between worship and community service that we end up diluting both. We need to be empowered by the Word of God and strengthened by the sacraments to go into the world and serve God and humanity. If worship isn’t compelling us to action, we are not being the church. But at the same time, if we are doing mission in place of worship, what is the message we are sending to those who we minister to? It seems that we are suggesting that they need not come to worship, that they would be better off serving in their community on Sunday morning, and that worship of God really doesn’t matter as long as you are a good person.

I’m reminded of this week’s lectionary passage  (Luke 10:38-42) where Martha wants Jesus to rebuke Mary for sitting and being in the presence of Christ. But instead, Jesus says that Mary has chosen the better part, even though Martha is doing something much more practical and useful. We should be careful of getting into the habit of privileging service over worship and suggesting that we are not being the church when we gather in worship to praise the Triune God. Our praise and worship should lead us outside the church, but that doesn’t negate the need for weekly corporate worship where we gather to hear God’s word proclaimed and give thanks in the breaking of bread.

I have seen an alternative which I think does this better: having worship out in the community in an abbreviated form, then doing service and mission. This is probably a more biblical way of worshiping than gathering in a large gothic sanctuary, and it doesn’t negate our worship of God like canceling worship altogether does. It also more directly connects our faith and worship to the service we are doing – if we hear God’s Word, are fed by the sacrament, and then immediately are sent out to serve God’s people, the connection between our worship and sending forth make it clear that we are doing this as disciples of Christ and reminds us of how God’s Word demands that we both serve the world and worship God.

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A Church’s Savior

So, as most who know me have learned, I was involved in a last-minute appointment change and will be moved to a new church at the beginning of July (a little later than most of my North Georgia clergy friends… a blessed reprieve given the last-minute nature of the move and all the preparation involved in moving). The plan had been for me to remain at my current appointment, where I began serving last year. We had done some wonderful work together as a church and I was looking forward to continuing the efforts for a second year. But, God had other plans as I learned I would be moved.

This last-minute change has taught me a few things. First, is that it isn’t over till the bishop fixes the appointments at the end of conference! (And even then, things can happen mid-year) Second, and perhaps most important, was learning some humility for myself. I had worked very hard at this church and felt that things had gone very well under my leadership. And because of this, I had started to have the creeping sense that I was responsible for the success of the church. Naturally, then, my first reaction when I learned a change of appointment was imminent was, “What would this church do without me?” Once I had that reaction, I knew I needed to reconsider my role and prepare myself for the fact that this church would need to make do without me. And, most importantly, I needed to remember that this church has had a savior long before I got there, and my arrival did not bring salvation to this church. Though it had had a difficult few years, this congregation had managed for 40 of its 41 years of existence to survive without my leadership. It can be very easy as public leaders of congregations to take credit for success (and just as easy when things aren’t going well to receive all the blame for failure… but that’s a topic for another post). It’s easy for us to get so caught up in our own skills that we forget that God has been at work for a long time without our help.

Remembering that God has been with this church for all of its life, and that God would continue to be with this church even when I am not there, was an important lesson for me and one I’m continuing to struggle with. God’s church prevails even when we as humans fall short. God’s church needs human effort, but God has a way of working both through, and in spite of us.

Part of the lectionary Gospel for one of my final Sundays at my current church has really convicted me: “Jesus said to him, ‘No one who puts a hand on the plow and looks back is fit for God’s kingdom'” (Luke 9:62, CEB). It is tough to trust God and not look back, wondering what my efforts might have produced. But I’m called to move on to a new place of service and trust that God will provide in all places and will continue causing the growth after I have tended the soil.

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Without Reserve?

“Do you offer yourself without reserve to be appointed and to serve as the appointive authority may determine?” This question appears in ¶335c.1 of the Book of Discipline of the UMC as part of the paperwork candidates for ordination as elders must answer before their ordination to full connection. This is a question you are expected to answer “yes” to before you are ordained as an elder. The problem is, there is a huge, but unstated, asterisk in many Annual Conferences that I think is ultimately destructive of the very nature of itinerancy, one of the central pieces of our United Methodist polity. If you’re not familiar with United Methodist terminology, itinerancy is our system whereby pastors are appointed to churches, rather than called. Clergy are appointed by the bishop, and though congregations and pastors now are involved in the consultation process, it is still a consultation, and ultimately, elders covenant to go where they are sent.

One of the fundamental stated ideas for why we itinerate in United Methodism is that the gifts of pastors can be matched to churches by people who can see the big picture rather than being focused solely on the concerns and wants of a single church. In theory, we have “open itinerancy” in United Methodism, a concept which emerged when we were dismantling our segregated structures. Open itinerancy means appointments are to be made “with consideration of the gifts and evidence of God’s grace of those appointed, to the needs, characteristics, and opportunities of congregations and institutions… without regard to race, ethnic origin, gender, color, disability, marital status, or age.” In theory, it’s a force to be reckoned with, and if it were used the way it was written, I can imagine our churches could do some amazing things with pastoral leaders they would have never hired on their own. Instead of congregations always hiring people who look like them and think like them, they might be sent someone who will challenge them toward holiness and who might help them to see their ministry in a new light, and the pastor might be sent to a place where s/he is challenged in his/her own perspectives. There are times when that happens, and it’s wonderful to see. But the very nature of itinerancy is at risk because of a big, invisible asterisk after “without reserve.”

So what’s that big asterisk? Most of us clergy seem to expect that our next move will see a salary increase, or at the very least will not see a decrease. It’s expected that itinerancy will have us beginning in small churches and slowly moving up to more prestigious and bigger churches. And if the church were intended to function like a business, that would make perfect sense. You reward seniority, experience, and paying your dues by promotions within the company. Large churches pay lots of apportionments, and so since they generate the most revenue, they deserve the most experienced pastors, and large church pastors have the most experience and have to deal with a unique set of pressures, and so they should get paid the most. The capitalist in me likes it and thinks it’s logical.

But what if the church were modeling an alternate economy? What if the church isn’t called to be just another expression of American capitalism? What if we, on occasion, sent our most experienced pastors to small, struggling churches who have never seen a pastor stay for more than three years and thus have stayed in the cycle of being small and struggling? What if we decided the best way to support pastors was not by paying compensation packages that well exceed the median income of our communities, but instead was by providing support for regular sabbaticals, support for clergy families, and regular counseling and spiritual direction?

When itinerancy means you need a pay raise to move, itinerancy can become focused not on the needs of the churches and the gifts of the pastor, but the career needs of the pastor and the financial gifts of the churches. And I found myself greatly troubled by a proposal that came before my Annual Conference (North Georgia) this year. The desire of the personnel practices committee was to raise the superintendent’s salaries to 95% of the episcopal salary, which means raising cabinet-level salaries by about 4.5% over the next four years. (It did not pass – I spoke against the proposal at Conference partly on the basis that we as a conference aren’t paying our general church apportionments in full, and so to obligate ourselves to significantly higher salary costs would surely prevent us from meeting our obligation to the general church). The argument for this proposal is that the bishop needs superintendents’ salaries to be higher in order to offer a compensation package favorable to current compensation. And that troubles me, because it sounds like clergy have turned down superintendencies because the salary was not enough. I understand why – there are clergy in the North Georgia Conference whose base compensation even before housing and pension benefits exceeds $200,000 annually, so it would be a considerable pay cut for those clergy to be appointed as superintendents. But the problem is, our ordination vows never said every move would be a raise.

When our vows require us to submit to the authority of the bishop and offer ourselves without reserve, that has to include salary and prestige. I think ultimately every pastor needs to be willing to serve at the minimum compensation for their conference, and if we think that’s beneath us, we should consider many of our laity who faithfully tithe and make much less than us, who aren’t guaranteed an appointment and who don’t have a defined benefit pension or affordable health insurance. In spite of the recession, our denominational average compensation (which includes the value of our housing benefit) climbed from $56,044 in 2006 to $65,186 in 2012. In that same time period, median household income in the US has declined from about $54,000 to about $51,000. We’ve been blessed mightily, and perhaps it’s time that we earnestly reconsider how the church uses money. Do we really treat it as sacred to God and the poor?

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The Orders of Ministry in the UMC

Warning: this is a very “insider” post. If you aren’t particularly interested in issues facing the United Methodist Church, go ahead and skip this.

I wrote my Master’s thesis on some historical issues with ordained ministry in American Methodism, specifically the problem of having unordained clergy preside at Holy Communion. I won’t go into all the details (I have 70 pages on it if anyone is dying to know), but the short version is this: we have a very strange, almost nonsensical theology of ordination. It arose out of missional necessity, which is in the DNA of Methodism. But the way we do it now just really doesn’t make a whole lot of sense. Let me try to break it down. Here are the common categories of clergy (or people who function effectively like clergy) that we currently have in the United Methodist Church:

Ordained Elders in Full Connection
Ordained Deacons in Full Connection
Provisional Deacons
Provisional Elders
Licensed Local Pastors (I serve in this category)
Certified Lay Ministers
Supply Pastors

Ordained elders can preside at Holy Communion in all circumstances, unless they have been honorably located, in which case there are certain restrictions. Ordained deacons can preside at Holy Communion only if the bishop gives them specific permission to do so within their ministry setting. Licensed Local Pastors can preside at Holy Communion within their ministry context, which, depending on how your Conference interprets it, means your church building, the community you serve, or anytime you’re ministering to someone who might become part of your church or whom you consider your community. Provisional elders are issued a local pastor’s license when they are “commissioned,” which is a service sort of like an ordination, but not quite, so provisional elders can serve communion with the same restrictions as licensed local pastors. Provisional deacons are issued a “license for the ministry of the deacon” at their commissioning, which confers no authority and from what I can tell, most annual conferences don’t issue a paper certificate at all. Certified Lay Ministers and Supply Pastors can never preside at Holy Communion, though at times there are cases where the elements are “pre-consecrated” by an ordained elder; however, this practice is not sanctioned by our official teaching document on Holy Communion.

Confused yet? You should be – this strange tiered system of clergy and sacramental privileges is really not theologically grounded, but really about practical realities arising out of the history of our church. Originally, only traveling preachers were ordained and were the only ones with sacramental authority, and they didn’t really pastor churches, but instead went from community to community preaching and teaching and serving Communion – the quarterly conference (what morphed into today’s charge conference) was a revival more than the business meeting and found its apex around the Communion service led by the presiding elder, the predecessor office to today’s district superintendent. The local communities would be led by the laity of that community, rather than ordained clergy. Eventually, though, the traveling preachers started settling into a less strenuous life and itinerancy meant you moved every few years instead of every few weeks and morphed into the office of pastor much as we think of it today.

But we’ve never had enough ordained clergy to serve all of our churches. So, the local preacher filled that gap by serving as the pseudo-clergy leader of a local community. Each church would be visited at least four times a year by an ordained presiding elder. But some churches wanted Communion more often, and it was becoming difficult for the PE to visit each church quarterly, so local preachers were given the right to preside at Communion and baptism. The ordained deacon as we have it today arose in its present form in 1996, as did the provisional elder and deacon office – I won’t go into detail on those but they also have a complicated history.

Since the mid-1950s, the UMC has commissioned 15 studies of ministry to try to sort all this out, and in the end, we’ve been left with ministry that is, as one of John Wesley’s preachers wrote, “neither Episcopal nor Presbyterian, but a mere hodge-podge of inconsistencies.” The problem is, our theology of ordination is an odd mixture of hierarchical, episcopal orders like that of the Anglican or Catholic church, and more low-church impulses driven by an understanding of the priesthood of all believers. What we end up doing is creating confusion among laity and clergy about when one can and can’t serve the sacraments. And the problem that we end up with is that it weakens how we see the sacraments. We say sacraments are something God does, but then we say licensed local pastors can only do it in certain circumstances, in effect, saying that God can’t leave the bounds of the community where someone is appointed. And then we have very strange links between appointment by a bishop and sacramental authority. So how is sacramental authority mediated? Through the Church universal? A particular bishop? The episcopal office? Ordination? We have no meaningful way of articulating this, and that’s unfortunate since we have articulated much more robust thinking about the sacraments over the past few decades.

So what’s the solution? As I see it, we have a few options:

1) Say that there is no distinction between laity and clergy other than function, and thus sacraments can be served by anyone with appropriate training.
2) Limit sacramental authority to ordained elders in full connection, and raise the expectations for ordained elders that they will have to travel to churches served by licensed clergy to offer the sacraments
3) If we’re going to appoint someone as the pastor of a local church, ordain them, and eliminate the link we have right now between ordination and full connection membership in an annual conference.

I personally like option 3, because option 1 would not be true to our Anglican heritage and I think has some theological issues I’ll explore in a later post, and option 2 has practical difficulties, because there are tens of thousands of our churches served (and served well and faithfully) by licensed local pastors; in This Holy Mystery, we recommend weekly Communion to all churches, and so we shouldn’t make it harder for churches to do this. So, option 3: If we think ordination is something that matters, we should be sending ordained clergy to our churches. It would mean greatly expanding how many people we ordain, and so perhaps the standards for licensing would need to be looked at more closely. But ordination is a gift of God to the church, and we should find ways to make sure that as many of our local churches as possible benefit from this gift.

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A Single Eye

So now that I’m finished with seminary (well, one Hebrew paper to go…), I’ve decided I want to keep up with writing and blogging as a way to engage in dialogue with others and to just give me a place to ponder what Christian faith is all about. I decided to title my blog based on one of John Wesley’s lesser-known sermons, “On A Single Eye” that has been on my mind lately. It was written just a few years before his death. In it, he takes Matthew 6:22-23 as his text and in his usual style, writes about the Christian life and the demands of holiness. In short, if our eye isn’t focused entirely on God, we will be “as far remote from happiness as from holiness.” One illustration he uses struck me particularly as I consider my call to ministry. What has led me here? Is it always for the right reasons that I do what I do? Here’s the example Wesley uses:

Suppose a young man, having finished his studies at the University, is desirous to minister in holy things, and, accordingly, enters into orders. What is his intention in this? What is the end he proposes to himself? If his eye be single, his one design is to save his own soul, and them that hear him; to bring as many sinners as he possibly can out of darkness into marvellous light. If, on the other hand, his eye be not single, if he aim at ease, honour, money, or preferment; the world may account him a wise man, but God says unto him, “Thou fool!”

How do we keep our eye “single”? It all comes back to constantly seeking the sustaining presence of God through the power of the Holy Spirit. I’ve experienced that struggle that Wesley is aware of, of the hungry soul wandering, trying to get fulfillment everywhere but in God. As Wesley explains it, the solution for the wandering soul is to fix your eye on God and let his light fill your life. The single eye toward God means the soul is filled with the things of God, and Christian perfection is not far off!

I can’t say my eye is “single” yet. Sometimes I enjoy the “ease, honour, money, and preferment” of the ministry and my eye is focused far less on saving my soul and those that hear me than Wesley insists it should be. And so when that happens, I pray God will sharpen my vision back toward him, that I and those with whom I minister might find God’s marvelous light.

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