MADISON, WI (March 18, 2019) — The Seventh Circuit Court of Appeals declared the clergy housing allowance constitutional, overturning a lower court’s decision on Friday.
Under the law, a “minister of the gospel” doesn’t pay income taxes on compensation that is designated part of a housing allowance. In 2017, the Freedom from Religion Foundation (FFRF) sued the government, arguing that the law discriminates against secular employees. “Minister of the gospel” has been understood to mean any clergy.
U.S. District Judge Barbara Crabb had ruled in FRFF’s favor, agreeing that the housing allowance violates the First Amendment’s Establishment Clause.
The panel of three judges, however, said the law was constitutional based on a 1971 U.S. Supreme Court ruling, which stated that for the statute to be legal, “it has a clearly secular purpose; has a primary effect that neither advances nor inhibits religion; and does not foster an excessive entanglement between church and state.”
The court ruled Friday that the clergy housing allowance does not sponsor religion but keeps the government from forcing the church to support the state and does not compel the church to promote religion on behalf of the state.
Circuit judge Michael Brennan wrote in the opinion that, “FFRF claims Section 107(2) renders unto God that which is Caesar’s. But this tax provision falls into the play between the joints of the Free Exercise Clause and the Establishment Clause: neither commanded by the former, nor proscribed by the latter.”
The FFRF is expected to appeal to the U.S. Supreme Court, but the group said it has not yet made a decision.
It is the second time the Seventh District has overruled Crabb on the issue. In 2013, she agreed with the FFRF when it attempted to have the clergy housing allowance declared unconstitutional, but the three-judge panel overturned her decision the following year.
Religious organizations have contended that eliminating the housing allowance would make it impossible for many houses of worship to afford clergy.