Don’t Cut Your Pastor’s Salary

The vast majority of Baptist churches in Alabama base their budgets on a calendar year. That means across the state, finance committees are working on church budgets for 2006. Let me offer a heartfelt appeal. Don’t cut your pastor’s salary.

Truthfully few churches ever actually reduce the dollars they pay their pastors. Such actions are reserved for those dire circumstances when a church can no longer continue the level of ministry it previously provided. In such cases, it is not uncommon for the pastor to suggest reducing his salary in order to maintain other ministries considered vital to the church.

A lot of churches carry on because of the financial sacrifices made by the pastor and staff members but that is another issue.

This appeal is for the bulk of Alabama Baptist churches facing another year of ministry at levels similar to or greater than the past. Please don’t cut your pastor’s salary.

Make sure you increase his salary and benefits to cover cost of living adjustments, or you have actually reduced the purchasing power of your pastor’s salary. That translates into a cut.

Inflation is not running in the double digit range recorded in the early 1980s, but it is still an issue for finance committees to consider.

So far this year, inflation is running at an annualized rate of about 2.5 percent. That means to stay even in the purchasing power of his salary, the pastor must receive at least a 2.5 percent increase.

This increase is not a raise. It doesn’t raise the ability to buy more goods and services. It doesn’t allow the pastor to have more for his family. It only keeps the purchasing power of his salary even with changes in the cost of living.

If a church wants to give the pastor a raise, then it will have to provide financial support beyond the cost of living.

Unfortunately some churches go from year to year without making any changes in the pastor’s salary. Committee members conclude it is easier to keep everything the same than it is to fund priorities. They had rather tell everybody they did not have enough money to make any changes in the budget than to present a budget that shows increased amounts for some areas and reduced amounts for others.

Such decisions result in cuts in the pastor’s salary. One pastor shared with me that his salary had remained the same for five years. The church still paid him the same amount agreed upon when he was called as pastor. Using figures from the United States Office of Personnel Management, that means the pastor experienced more than a 14 percent decrease in purchasing power during those five years. That is a substantial cut in anybody’s book.

Another church gave no salary adjustments to its entire staff for three years. The result? All church staff suffered a cut in purchasing power of more than 8 percent during the elapsed time. The church did not intend to cut the salaries. That was just the practical outcome of the church’s decisions.

Pastors’ salaries get cut in other ways. When churches do not keep up with the costs of being an employer, pastors usually suffer. In August, the Internal Revenue Service took the unusual step of increasing the allowable business mileage expense in midyear. The allowable amount jumped from 40.5 cents to 48.5 cents per mile. How many churches followed suit?

Unless churches change their reimbursement polices to reflect the increased cost of gasoline, pastors end up paying the difference between what churches allow and the actual cost. Businesses do not expect their employees to foot the bill for doing the work of the employer. Neither should churches.

Churches incur other business expenses such as medical insurance for employees. When a church fails to cover the costs for these business expenses, the employee — the pastor — has to pay the increased costs. The impact is a cut in salary because the pastor has less money left with which to provide for his family.

In the course of my years in ministry, I have been in situations where salary adjustments were simply impossible. The State Board of Missions staff here in Alabama was in such a situation just a few years ago. Occasionally most ministers find themselves in such situations. When they do, most are understanding.

But years of no cost of living adjustments should be few and far between. Churches should make every conscious effort to provide at least a cost of living increase for pastors and staff members and adequate funding for legitimate business-related expenses. To do any less results in a cut in the pastor’s salary whether the church intends it or not.