Image by Matti Mattila via Flickr
Riverside Church in Manhattan is a nice church. By "nice" I mean ginormous with high powered folks who go there. Prestigious. It is the Big Time.
The church has been transitioning from a most affluent white liberal membership to more African American. With the call of Braxton, a Southern Baptist & Rhodes Scholar, the church will take on a more personal piety dimension, & will almost certainly move to a more conservative position. (Link to Association for Church Renewal.)
But when Juan Gonzalez first broke the story about the annual salary package the church was going to pay Rev. Braxton, it brought rounds of criticism. (The Daily News.)
And rightly so ... if it were as Mr. Gonzalez lays it out to be, as follows:
- $250,000 in salary.
- $11,500 monthly housing allowance.
- Private school tuition for his child.
- A full-time maid.
- Entertainment, travel and "professional development" allowances.
- Pension and life insurance benefits.
- An equity allowance for Braxton to save up to buy a home
Mr. Gonzalez is making the same mistake most Americans make when examining the way a pastor is paid --- &, frankly, most Americans, including Mr. Gonzalez, have no idea what they are talking about.
First, there is a
Image by Fellowship of Reconciliation via Flickrhuge difference between "salary" & "cost of employment." Salary is what the guy/gal actually makes & is the basis of the W2 wages. The Cost of Employment is the total amount the employer is allocating for that employee.
For example, a first year teacher in my school district makes around $35,000 a year. That is the teacher's salary. The W2 will reflect that as the amount of money paid to the teacher & all taxes must come from that dollar figure. The cost of employment to the school system, however, is much higher because that teacher also gets personal days off, health insurance, dental & vision insurance, etc., of which the school district pays a large portion. The school also pays half the social security tax for the teacher. All equipment the teacher needs is paid for by the school system, as well as staff development training, stipends, extra curricular activity monies, incentives to perform, etc. Then there is the money the school is required to put into the mandatory Teacher Retirement System. All of that adds up to the cost of employment, but the actual salary the teacher makes is far less.
In the case of Riverside Church, the salary the pastor makes looks like, if the story is accurate, is $250,000. That's a lot of money but it is a far cry from the cost of employment.
Mr. Gonzalez seems to not understand taxes very well, either. The housing allowance is per the IRS guidelines that allows a pastor to designate part of his salary as "housing" to prevent that portion from being taxed as regular income. This was done because pastors tend to move around a good bit & pastors end up getting shafted regarding home equity because of the whim of his superiors or the congregation. However, that housing allowance is still taxed for social security purposes --- nearly 16% --- & that has to be paid out of his salary.
The maid & tuition for the child are also taxed at fair market value & must be paid out of his salary.
The insurance & benefits are the same for any employee regardless the salary. No one thinks to include that when discussing how much salary they are getting paid from their employer.
The travel & education & other allotments are the same as when a school system pays travel costs for a teacher to go to an off site location for training. All employers do this. Why make an issue of it for this guy? We want teachers to get continuing education credits & we reward them, but not a pastor?
I'm not saying the guy is worth $250,000. Maybe he is. I don't know. However, in Manhattan, with that church, $250k may not be far off the mark. All I'm saying is that we need to be fair when discussing salary & not confuse it with the cost of employment. Otherwise we might just be telling that first year teacher that she is really making $60k a year, instead of the $35k she sees on her W2.