This story landed like a like grenade yesterday, and the alarm over it is only growing.

If you haven’t heard about it by now, take a deep breath and read on:

A proposed bill that would take power from Catholic priests and bishops and turn it over to parishioners has sparked outrage among church leaders, criticism from opposition lawmakers and questions about its legality.

“You cannot tell a church how it can govern itself,” said Marc D. Stern, general counsel for the American Jewish Congress in New York. “The church is entitled to govern itself any which way it wants.”

The bill, which would create lay councils of seven to 13 people to oversee the finances of local parishes, relegating Catholic pastors and bishops to an advisory role, won’t get its official public hearing before the legislature’s judiciary committee until Wednesday.

But by Monday, a firestorm had erupted: Thousands of Catholics contacted the committee’s co-chairmen, Rep. Michael Lawlor, D- East Haven, and Sen. Andrew McDonald, D- Stamford, to register their displeasure; McDonald’s in-box was inundated with 3,600 e-mails by 9:30 a.m., an aide said.

Senate Republican leader John McKinney called the proposal “offensive” and “patently unconstitutional.” And the New York-based Catholic League for Religious and Civil Rights issued a statement demanding that Lawlor and McDonald be removed from office.

“I was astounded at the reaction in my own parish,” said Monsignor John J. McCarthy. Like priests across the state, he discussed the proposal with his parish at the Cathedral of St. Joseph in Hartford on Sunday. “People wanted to know, ‘How can the legislature do this? Isn’t this unconstitutional?’ I can’t recall seeing such strong reaction to any issue.”

Bridgeport Bishop William Lori also condemned the bill, calling it “a thinly veiled attempt to silence the Catholic Church on the important issues of the day, such as same-sex marriage.”

The proposal is part of a larger struggle within the Catholic Church over the balance of power between the laity and the leadership. “Catholic lay people provide all the funds for the running of the parish, but they have absolutely no executive authority for how those dollars are spent,” said Paul Lakeland, director for the Center of Catholic Studies at Fairfield University. “That’s a situation that increasing numbers of people are unhappy with.”

The issue was brought to McDonald by a Catholic constituent from Greenwich named Tom Gallagher, who is part of a group pressing for parishioners to play a greater role in church governance following two cases of financial impropriety at Fairfield County churches.

McDonald, who is Catholic, said he is keeping an “open mind” and had yet to decide whether to embrace the measure. But he does not regret raising the issue.

“I certainly think it’s an appropriate function for legislators to listen to constituents who have been the victims of fraud and take their concerns seriously,” he said.

You can read more at the link. And you can read some more Catholic reaction here:

Although the legislation in question was introduced in Connecticut, Archbishop Charles Chaput of Denver has issued a statement on a bill that would effectively sever the relationship between a bishop and his pastors and parishes. Archbishop Chaput says in his statement, “What Happens in Connecticut Matters Here,” that the bill is “bad public policy in every sense.”

The Senate Bill 1098 was introduced last Thursday by the chairs of the Judiciary Committee of the Connecticut State Legislature: Senator Andrew McDonald of Stamford and Representative Michael Lawlor of East Haven.

Sen. McDonald and Rep. Lawlor are both homosexual activists, who have opposed the local Church’s efforts to defend marriage between a man and a woman.

The bill’s supposed purpose is to increase financial oversight of the Church, following two recent embezzlement cases.

However, the proposed legislation also reorganizes the internal structure of the Church, removing the bishop as the head of the board of the parishes in his diocese and requiring the pastor to report to a board composed of laity instead of the bishop. Under the bill, the bishop is also relegated to being an “ex officio” member of the board, without voting rights.

Addressing the perception that outsiders have of the Church as “a monolith,” Archbishop Chaput said that “the opposite is true.”

“Her real structure is much closer to a confederation of families. Each diocese or ‘local Church’ is accountable to the Holy See and in relation to one another within the Catholic faith,” the archbishop explained.

“Bigoted legislators,” Chaput said in reference to Sen. McDonald and Rep. Lawlor, “including some who claim to be nominally or formerly ‘Catholic,’ are thankfully uncommon. Most lawmakers, whatever their convictions, sincerely seek to serve the common good.

“But prejudice against the Catholic Church has a long pedigree in the United States. And rarely has belligerence toward the Church been so perfectly and nakedly captured as in Connecticut’s pending Senate Bill 1098, which, in the words of Hartford’s Archbishop Henry Mansell, ‘directly attacks the Roman Catholic Church and our Faith.’”

UPDATE: CNA has this interesting wrinkle:

Catholics around the country are upset over a new bill in the Connecticut Senate that, in the words of the Archbishop of Hartford, “forces a radical reorganization of the legal, financial, and administrative structure of our parishes.” The bill, which bears resemblance to Voice of the Faithful’s Strategic Plan, is being supported by Dr. Paul Lakeland, who believes that in this case it’s appropriate to use state legislation to force the Church’s hand.

Dr. Paul Lakeland, Fairfield University Chair of Catholic Studies, Voice of the Faithful member, former Jesuit Priest, and author of several books including “The Liberation of the Laity: In Search of an Accountable Church,” recently discussed his support for Connecticut’s controversial Bill No. 1098 with CNA. Dr. Lakeland is also scheduled to testify before the Connecticut General Assembly on behalf of the bill.

The premise of the bill is remarkably similar to the 2009-2010 Voice of the Faithful Strategic Plan. “The VOTF,” as Dr. Lakeland explains, “grew up in response to the sex abuse scandals here. One of the things that became rapidly apparent, among both liberals and conservatives, was the sense that the bishops hadn’t done a very good job of handling this.”

PHOTO: by John Woike/Hartford Courant