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Posted at 12:01 PM ET, 08/08/2012

Gray reacts to surge in D.C. property assessment reductions

Mayor Vincent C. Gray said he is concerned about “any amount” of revenue that may have been lost with the recent $2.6 billion in reductions on the taxable value commercial properties in the District.

The Washington Post found that the Office of Tax and Revenue reduced the 2012 assessments of more than 500 commercial properties through settlements between city tax officials and commercial property owners, representing a $48 million reduction in potential revenue. In most cases, the settlements went against the initial recommendations of staff appraisers.

At his regular bi-weekly news conference Wednesday, Gray said he was briefed on the issue “just the other day” by chief financial officer Natwar M. Gandhi, who oversees the tax office.

Gray said he had not read the Post story, but he disagreed with Gandhi’s stance that the $2.6 billion is minor when looking at the entire tax base of $246 billion. “Any amount that we would lose would bother me,” Gray told media. “At it’s core is why did it happen?”

The FBI and internal auditors are looking into the reductions, according to several people with knowledge of the probes. Gray said he will wait for any investigations to play out.

The mayor noted that he sponsored legislation when he was the council chairman that has ushered in “a new approach” to the independent board that hears appeals from property owners. The new board, now known at the Real Property Tax Appeals Commission, is filled with more professional, full-time members, Gray said.

He said he recognized that the former board, known as the Board of Real Property Assessments and Appeals, was “somewhat overmatched” when dealing with property owners with private lawyers.

In the past, Gandhi criticized the reductions made by the appeals board and wanted the right to challenge them in D.C. Superior Court.

The Post found that the tax office agreed to the assessments with owners, which did not allow the process to play out as it has in the past to the appeals board or to BRPAA.

The settlements were approved when BRPAA was still in existence. The new tax board went into effect in mid-July.

Also in July, Gandhi was approved to another five-year term, under Gray’s nomination. The mayor said he remains supportive of Gandhi. ”I was proud to renominate him,” he said. “I think he’s made an enormous contribution.”

Gray recalled when the city was in “desperate straits” financially, Gandhi was credited with helping the city out of its fiscal crisis. “Really, the city has come a mighty way...with his leadership,” he said. “I look forward to continuing to work with him.”

By  |  12:01 PM ET, 08/08/2012

 
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