A Massachusetts senator has introduced a bill to close a loophole in the way the commonwealth manages its relations with non-profit entities. Right now, in order to maintain their tax-free status, they have to file annual reports with the Secretary of State’s office that accounts for what real estate they own, how much money they take in, from what sources, and what they did with it (kind of like a tax return, but more of a no-tax return).
For decades, though, one class of non-profit organization has been exempt from the reporting requirements. One senator, Marian Walsh of West Roxbury, has looked high and low for the original rationale for that exemption, and can’t find it, so she’s filed a bill to close it off. And that has a lot of people in high dudgeon.
Because, you see, the groups that have so far been exempt from the reporting requirement have been churches.
Senator Walsh freely admits that her move was prompted by the recent priestly sex-abuse scandal that has rocked the Catholic Church. As it began to break, parishioners started noticing some odd things about how the Church was reacting. The Boston Archdiocese was paying out multi-million-dollar settlements, while at the same time insisting that the money did not come from parishioners’ offerings and closing parishes and selling off real estate holdings.
Some of those parishioners turned to the Church, asking just where the money was coming from and where it was going. And when the Church refused, some of them went to their elected representatives.
It’s a tough question. With the “separation of Church and State” principle, the anti-establishment clause of the First Amendment, the Catholic Church’s odd dichotomy of also being a representative of a sovereign state, and a host of other issues, does a state have have the authority to demand a church open its books? And if it does, should it?
I’ve given it a bit of thought, and I’d have to say yes to both. The government (meaning, really, all of us citizens) subsidize churches to a degree by exempting them from income, sales, and property taxes that any other organization would be liable to pay. And that privilege should come with a price: they must demonstrate that they are not abusing and exploiting that benefit.
I’d be more than willing to listen to arguments why churches should be granted this exception, and on an interview today I heard Senator Walsh say much the same thing. But as of right now, I think that the arguments in favor of treating the churches like any other non-profit organization are pretty compelling.