From The Vaults

Public Taxes To Finance Religious Schools, Ohio HB136, May Incite Wider Debate About Church Tax Breaks

The push of Ohio House Bill 136 to transfer public tax money from public schools to private religious schools is sufficiently outrageous that it may well incite closer public scrutiny of how tax money, in general, is used to support churches and the propagation of religion.

Churches and church schools are nonprofit organizations that are exempt from many laws that regulate other non-profits; they are given big advantages via special IRS tax laws that other non-profits do not enjoy.

The court documents from the bankruptcy of Robert Schuller’s Crystal Cathedral revealed that eight church employees received over $832,000 worth of income, each year, that was completely tax free — via a “housing allowance” law that applies only to churches, not to other non-profits.

According to bankruptcy court filings in California:

  • Robert A. Schuller, the megachurch founder, received a $98,861 tax-free housing allowance annually.
  • A son and daughter of Schuller received tax-free housing allowances that totaled $236,768 annually.
  • Three of Schuller’s sons-in-law received tax-free housing allowances that totaled $306,093 annually.
  • Fred Southard, chief financial officer of Crystal Cathedral Ministries and who owns a home in Newport Beach, California, worth $2.3 million, received a tax-free housing allowance of $132,000 annually, and his son-in-law, a part-time pastor at the megachurch, received a tax-free housing allowance of $58,747 annually.

Since the “housing allowance” is tax free money, preachers often receive more in “housing allowance” than in salary. Fred Southard at Crystal Cathedral received $132,000 in “housing allowance,” but only $12,242 in salary.

TV evangelists and other ministers of the “prosperity gospel” live in multimillion dollar homes and receive hundreds of thousands of dollars each year tax free to pay for those homes.  And the law allows these preachers to own multiple vacation homes and receive the same tax advantage on each home.

Huge tax advantages given to churches and preachers is one explanation why there has been such a boom in the proliferation of new church startups. The “housing allowance” is one big advantage, but not the only one.

A 2006 article in The New York Times — In God’s Name: Religion-Based Tax Breaks: Housing to Paychecks to Books — shows that the cost of this “housing allowance” for churches each year is over $500 million in lost tax revenue.  And, of course, we all are paying more taxes to make up for this lost revenue, so we are being indirectly taxed to pay to support churches and support the propagation of specific religious doctrines

The nation needs a huge in-depth discussion about tax fairness, tax purpose.  Proponents of HB136 — pushing for the use of public tax money for private religious education — may succeed in stirring up public interest in the whole question of why tax money, in general, should be used to finance churches and the promotion of specific religious doctrines.

From the Secular Coalition For America:


11 comments to Public Taxes To Finance Religious Schools, Ohio HB136, May Incite Wider Debate About Church Tax Breaks

  • Eric

    Connecting HB-136 to the Crystal Cathedral is a stretch, Mike.

    On the other hand, if more Oakwood and Kettering kids enroll at St Albert and Alter as a result of HB-136, there will be openings for Dayton kids in those districts. Sounds like win-win-win: Parents get a preferred school choice and Oakwood kids get exposure to lower socioeconomic peers.

    If you care about public education, consider correcting its obvious deficiencies rather than attacking your neighbors’ freedom of religion.

    You might also review the relative societal costs of tax breaks versus collective bargaining for teachers.

  • Mike Bock

    Eric, you are refusing to answer the fundamental question that I keep raising: How is it right that tax dollars should be used to fund private religious education? I am opposed to using tax money to support private religious schools whose mission is to unabashedly fulfill an agenda of religious indoctrination. Using tax dollars to support religious indoctrination, it seems to me, should be opposed by “conservatives,” yet it is a Republican dominated Education Committee that is pushing HB136.

    Connecting the Crystal Cathedral and HB136, in my thinking, is not a stretch, because both point to the same central question: Is is right, constitutional, or wise to use tax dollars to support the propagation of religion? I think most voters, including “conservatives,” if given the chance, would oppose the “housing allowance” tax loophole granted to churches, and, instead, would choose to treat churches as other non-profits. Closing that tax loophole for churches would bring $500+ million of revenue, each year, back to the federal budget. Of course, churches of all types would fight such a change in the tax code tooth and nail, but why should churches get special tax privileges not given to other non-profits?

    The point is, the advocates of HB136 should realize that by pushing for even more tax dollars for religious indoctrination, they risk inciting a wider debate about the whole issue of church tax breaks, and, if a sufficient part of the public, including “conservatives,” is awakened, a wider debate will inevitably threaten well established tax privileges that help fund churches — such as the “housing allowance.” HB136, I feel, is moving public policy way beyond what the public wants, and, therefore, risks a big push-back with unpredictable results.

    Transformation is needed in public education. But, more dictates, more legislation from Columbus is not the answer. The best way forward is for local communities to exert local control via vitalized local democracy.

  • Rick

    And you, Mike, refuse to acknowledge that it is the parents who are primarily responsible for educating their children. If they choose to send their kids to private schools, they should be able to make use of the school taxes they paid. Yes they could have sent them to government schools but they did not. They, not the government, are responsible for educating their children. That is one thing you liberals push for constantly, an ever increasing role of the government in all facets of our lives.

    As for your complain about using “tax” dollars to support religion, that is merely selective liberal indignation. Where ever there are tax breaks, for mortgages, giving to charity, etc. the same could be said.

  • Eric

    Transformation is needed in public education. … local control via vitalized local democracy.

    How’s that going? Here’s a threat checklist:

    Health of American democracy
    America’s national security
    Soundness of American economy
    Students’ human rights

    When the state fails to address these purposes of education, how does it justify compulsory education?

    How does an enterprise that can’t move a good idea a few miles north on Far Hills from Kettering Foundation to Kettering Fairmont lay claim to billions in taxpayer dollars and compulsory attendance of school-age children?

    President Obama is required to file a report on human rights abuses in public education with the United Nations. Will he have positive information to share from the Miami Valley? Or are his supporters too busy obsessing on their pet injustices?

    Just asking.

  • Mike Bock

    Rick, I think we can agree that taxation is needed in order to pay for those governmental expenses that advance the “common good.” There is a big disagreement about what taxes should pay for, but, most people agree that a system of taxation is needed in order to raise revenue to pay a system of national defense or a system of highways.

    Like it or not, as things now stand, citizens are coerced to pay taxes to finance a system of public education. We have a long established consensus that the “common good” of the community benefits from the education of its members and that a system of taxation should be used to finance that education. As taxpayers we have a right to expect that the revenue raised by those taxes will be spent on creating a system of public education that advances the “common good,” and we have a right to expect that those taxes certainly will not be spent on an education that indoctrinates children into a political party or that advances specific religions.

    Parents who seek to take upon themselves the sole responsibility for the education of their children are free to do so, and are free to teach the world is 6000 years old, or teach any other prejudice, hate, political view, or nonsense they please — via homeschooling or via private schools — but it is unreasonable that they should have access to public funds to do so, anymore than they should expect to receive public funds to pay for their own private army or their own private roads.

    Eric, We have no local control, because our local democracies are barely alive. A centralized control of education from Columbus or Washington may be needed to address a “threat checklist” in education in the most severely dysfunctional communities, but, at best, such centralized control can only produce new shades of mediocrity. Of course, mediocrity in public education is better than the pits now inflicted on some communities. The problem is that mediocrity, by government standards, is now labeled “excellent.” Schools now considered “excellent,” however, need to show the way to new breakthroughs. The way forward to the authentic transformation needed in public education, I believe, is via these “excellent” local systems seeking to rise to a new level. The transformation that is needed can happen only through the vitalization of local communities.

    Yes, I understand that, right now, this sounds unlikely. But, big changes can happen in a short time and our task is to work toward that end. I don’t see any other possible avenue.

  • Eric

    Mike, has the President inspired any of his supporters to address the “threat checklist?” Perhaps Jim Butler’s future opponent?

    “Barack Obama will require you to work. He is going to demand that you shed your cynicism. That you put down your divisions. That you come out of your isolation, that you move out of your comfort zone . . . Barack will never allow you to go back to your lives as usual – uninvolved, uninformed.”

  • Mike Bock

    Eric, I’m practicing my Google skills. I found the quote you cite. It is from a speech given by Michele Obama in February, 2008. The quote starts at about 7:45. But to answer your question, no, at least in my orb of awareness, once elected, President Obama disappointed his core supporters in many ways. He failed to even attempt to inspire his supporters in the way anticipated by his wife.

  • Rick

    Mike your post makes it clear you view private education with contempt. I know that Catholic schools do not ” teach the world is 6000 years old, or teach any other prejudice, hate, political view, or nonsense they please.” Their students do better than students on public schools.

  • Mike Bock

    Rick, if HB136 was limited to non-religious private schools, chartered by the state, then I think I could support it. At least I would be open to studying the proposal with an open mind. To gain my support, one big problem I would want to be addressed is the fact that, if HB136 is approved, the operators of private schools, even non-religious ones, would have no requirement to listen to or communicate with the taxpayers who would be footing the bill.

    My point is that HB136, as it is, opens the door to tax dollars being used to pay for private religious schools that are centered on indoctrination — schools whose mission is to freely teach a world POV that public schools are prohibited from advancing. My point is that parents are free to educate their own children into a POV far from the mainstream, but it makes no sense to suppose they have a claim on public money to do so.

    Proponents of HB136 would like to advance the idea that this is all about finding funding for Catholic schools — because most people have a high regard for Catholic schools — and I certainly was not referring to Catholic schools in the phrase you quote. But HB136 would encourage a type of school to become established very different from our well established Catholic schools, and a whole different type of religious education to begin to flourish and to be funded by public tax money.

    It seems contradictory to me someone who is “conservative” would support using tax money to pay for private religious education. How can such advocacy be considered “conservative”? Yet HB136 is being pushed by “conservative” Republicans on the House Education Committee and Republicans in the General Assembly.

  • Rick

    Mike, you and I do not agree what the common good is.

  • Mike Bock

    Rick, what is your definition of “the common good”?

    As I see it, policies that promote the “the common good” are those policies that make life better for the vast majority of citizens.

    I agree with a definition suggested by Wikipedia. “a specific ‘good’ that is shared and beneficial for all (or most) members of a given community.”

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