- The Washington Times - Wednesday, January 29, 2003

A 2-year-old think-tank called the D.C. Fiscal Policy Institute (DCFPI) has a recommendation for D.C. policymakers: Raise property taxes on people who have nice or really nice homes, and eliminate tax relief for low- and moderate-income homeowners. Don't expect the folks at the left-of-center DCFPI, an appendage of the Center on Budget and Policy Priorities, to admit their new study is that pedestrian. However, that is precisely what it boils down to property-tax increases all around town. It is a public-policy position contrary to Mayor Williams' objective to lure 100,000 new families to the District, Congress and to current and potential homeowners.
The study cites a fault line with the District's triennial assessment system, which first was implemented in 1997, when the congressional-created control board necessarily had oversight of D.C. affairs. Here's how the current system works. Instead of assessing homes annually, the District eases assessments in over three years, which encourages homeowners in all income brackets to better maintain their property and helps ease their tax burden.
The heart of DCFPI's complaint is that homeowners in affluent neighborhoods such as Foxhall and Cleveland Park are reaping larger tax cuts than their counterparts in poorer neighborhoods, like Congress Heights and Barry Farms. "[N]early all of the tax-relief provided by the cap in 2003 will go to homes with the highest market values," DCFPI complains in its report, while the owners of homes worth $250,000 or less will receive 15 percent of the property-tax relief, or an average of $1,900 vs. $110. DCFPI doesn't even want senior citizens and the working poor to receive their fair share of property-tax cuts, calling arguments on their behalf "weak justification" and citing other tax-relief options available to low-and moderate income earners.
To eliminate these so-called inequities, which are tax breaks any way you cut the pie, DCFPI proposes that D.C. officials return to annual assessments and limit tax breaks for homes assessed at $400,000 or $500,000.
Such a shift would truly constitute an inequity. Raising property taxes won't sit well with new or longtime homeowners. Implementing both or either of DCFPI's recommendations likely won't sit well on Capitol Hill, either, since federal law grants a special $5,000 federal credit for first-time D.C. homeowners a law that has considerably helped to spur the District's reversal of misfortunes. In fact, it was Congress and the control board that, in the mid-1990s, encouraged D.C. leaders to begin setting their sights on policies that would lure new taxpayers and homeowners in the outyears, to help when the going got tough. That time is now.

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