- The Washington Times - Monday, February 27, 2006

The District has spent more than $1 million preparing an appeal to a September court ruling that ordered the city to refund more than $15 million in property taxes to some homeowners.

City officials say the appeal, sought by the D.C. Office of Tax and Revenue, should make its way to court by the end of April.

“We’ve spent about $1 million thus far,” said Sherryl Hobbs Newman, deputy chief financial officer for the District’s Office of Tax and Revenue. “It could take awhile before [the case] is decided. It’d be hard to say, but it will probably be decided by the end of the calendar year, maybe.”

Superior Court Judge Eugene N. Hamilton ordered the city to repay $15 million of its collected 2002 real estate taxes to residents after he ruled the District’s property assessments were “illegal” and “discriminatory.”

The 2002 assessments made sweeping property-value increases in specific neighborhoods and significantly raised property taxes, homeowners said.

Judge Hamilton ruled the assessments were “capricious, an abuse of discretion and otherwise not in conformity” with the law.

The judge’s order came after Cleveland Park residents filed a class-action lawsuit against the city in 2002. The suit claimed the District’s methods unfairly compared properties while using an inaccurate formula based on recent home sales to determine how much assessments should change in any given neighborhood.

The city failed to “inform the taxpayer of the basis, rationale and methodology used in reaching the proposed assessment, thus depriving the taxpayer of information necessary to exercise his rights of appeal,” Judge Hamilton ruled.

Despite the court’s ruling against the city, D.C. officials are confident that they will win the appeal, saying their assessments are equitable and similar to those used in Maryland and Virginia.

“You always have to be confident. There’s no point in going to court if you are not confident,” Miss Newman said. “We feel confident and comfortable that the arguments that we will make at appeal … will assure us a victory when we go and we finish this.”

During a D.C. Council Finance Committee hearing yesterday, she testified that the Office of Tax and Revenue had sent out notices — per Judge Hamilton’s order — to about 45,000 property owners who would receive refunds should the city’s appeal fail.

She said the city would not deliver the refunds until the appeal process is complete.

Peter S. Craig, a Cleveland Park homeowner and lawyer who came out of retirement to file the civil suit, says the city’s case “has no legs.”

“I’ve laid out to [D.C. Chief Financial Officer Natwar] Gandhi the problem, and he did nothing. I laid out to [D.C. Council member] Jack Evans the problem, and he did nothing. And I laid it out to the court, and they agreed with us 100 percent,” Mr. Craig said. “The city is swimming against 35 years of court decisions that lay out what it must do [to assess property], and the city will not win.”

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