The diocese will be raising the overall amount of its “parish assessments” — the “tax” collected from the Islands’ 66 parishes and two ethnic Catholic communities to help pay for diocesan operations — by about 30 percent at the start of this new fiscal year, July 1.
The diocese now collects a total of $2.7 million from its parishes, an amount set in 2004. This year the amount will go up to $3.5 million.
It is the first increase to parish assessments in a decade, said Diocese of Honolulu finance officer Lisa Sakamoto. In the last 10 years, she said, the diocese has “never changed” its assessment requirements “even with rising costs” and inflation.
The decision to raise the assessments was made by Bishop Larry Silva after consultation with pastors and financial advisors.
Parish assessments are an important part of the financing of a diocese’s budget, said Sakamoto. The Diocese of Honolulu has more than 20 central departments whose work the assessment partially funds. These include the bishop’s office, the Hawaii Catholic Schools office, the Office of Worship, the Office for Social Ministry and the Office of Clergy.
As authorized by church law, most dioceses require these mandatory parish contributions to finance their operations and programs.
The Code of Canon Law (1263) states, “After the diocesan bishop has heard the finance council and the presbyteral council, he has the right to impose a moderate tax for the needs of the diocese upon public juridic persons (i.e., parishes, religious institutes) subject to his governance; this tax is to be proportionate to their income.”
The parish assessments will cover 35 percent of the Diocese of Honolulu’s $10 million annual operating budget, Sakamoto said. The remaining income comes from donations, rental earnings, charges for services, investments and grants.
“It’s all to support the greater church,” Sakamoto said.
Sakamoto said that “most parishes will see significant increases” after July 1 in their individual assessments. Some parishes will see their assessments go up by several thousands of dollars.
Calculating assessments
The method for calculating each parish’s assessment “has been in practice for a long time” and is “very complex,” Sakamoto said.
Here’s how it works. A parish’s total revenue — Mass offerings, donations, grants and other income — is calculated. Every parish then receives a standard deduction of $45,000. A number of other deductions are also applied, further reducing the parish’s “assessable revenue.”
These deductions include money paid for construction, building repairs and maintenance, subsidies to parish schools, fundraising expenses and funds distributed to the parish from the With Grateful Hearts capital campaign.
Sakamoto said deductions apply to any parish project or initiative aligned with Bishop Silva’s diocesan Road Map goal to “restore, revitalize and rebuild” parish life.
A parish’s individual assessment is calculated by dividing its own assessable revenue by the total revenue of all the parishes. The figure obtained is then multiplied by the diocese’s total assessment needs, which will be $3.5 million beginning this fiscal year.
In other words, the percentage of an individual parish’s taxable income to the combined income of all the parishes is the percentage of the $3.5 million the parish owes.
It is a cumbersome formula that is unique to our diocese, Sakamoto said. She has discussed parish assessments with diocesan finance officers on the Mainland and found that there is no standard assessment calculation process.
“How they tax a parish is all over the map,” she said. “There is no one-size-fits-all” model.
Sakamoto noted that other dioceses take assessments ranging from 5 percent to 30 percent of a parish’s revenue. In the Diocese of Honolulu, assessments represent about 11 percent of all parish earnings.
A dozen or so Hawaii parishes will actually see a decrease in their assessments this year. Sakamoto said the reasons for this are unique to each of the parishes. Many of these parishes have been helped by the diocese’s various deductions, she said.
The bigger picture
The new assessment increases should not put any local parish in financial strain, Sakamoto said. The diocesan Finance Office, Presbyteral Council and finance council have spent months discussing how to ensure the diocese’s needs are met without compromising parish work.
Many parishioners are not aware of the increase in parish assessments, Sakamoto said. However, it is important for local Catholics to understand that “a portion of what they’re paying to their parish” goes to the diocese, and to “make the connection that the diocese is part of the (larger) church.”
“The diocese is there to serve the parishes,” she said.
Going forward, the diocese hopes its renewed focus on stewardship and development will provide, alongside the parish assessments and other income, a sustainable source of support for its programs and services.
“It is our hope that the time, talent and treasures of our parishioners will multiply to support the parishes, schools and chancery operations and ministries,” Sakamoto wrote in a March 30 letter to the Presbyteral Council, the bishop’s body of priest advisors.
