Members of the D.C. Council introduced a slew of bills yesterday that would reduce the property tax burden in the city in anticipation of another year of skyrocketing property values.
Every member of the council has sponsored or co-sponsored at least one tax cut proposal since the legislative session began Jan. 2, indicating wide support for such measures. Chairman Linda W. Cropp (D) said those proposals contain more than $300 million in tax relief, including proposed reductions in income and sales taxes.
Council member Jack Evans proposed several tax relief bills.
The revenue-reducing bills are the first salvo in an expected battle between council members and others who want to use the city's rapidly rising revenue to reduce its tax burden and those who want to use the extra money to restore programs cut during lean times and improve health and human services. The city has a record $1.2 billion in reserves.
The council is considering the tax cut measures as homeowners are bracing for their new property assessments and as at least four council members are assessing their chances for a mayoral bid.
"We obviously can't do it all, but we will do something," Cropp said. "Everything should be put on the table, and we should have an open discussion."
Sharon Gang, spokeswoman for Mayor Anthony A. Williams (D) said the mayor would be skeptical of "doing tax reform in a vacuum'' without any revenue estimates.
Council member Jack Evans (D-Ward 2), chairman of the Finance and Revenue Committee, introduced a series of bills that would provide broad-based tax relief.
For owner-occupied homes, Evans has proposed capping yearly property tax increases to 5 percent, down from the current 12 percent, and increasing the homestead exemption to $45,000 from the current $38,000. The deduction, which reduces the taxable assessed value of a property, amounts to a tax credit for those who live in properties they own.
The yearly cap would remain in effect until the home is sold. The new owner would pay taxes on the full assessed value during the first year, after which the yearly cap would begin again.
Residential assessments on average will rise citywide this year by 15 to 18 percent, said Thomas Branham, the city's chief assessor. Assessments are scheduled to be mailed by the end of the month.
"It's just exploding in the city, and everyone is getting hit," Evans said.
He also proposed capping tax increases on commercial and rental property taxpayers at 10 percent a year, saying that landlords often pass on tax increases to tenants.
Evans also proposed that disabled homeowners with incomes less than $100,000 be given the 50 percent discount on property taxes that seniors get.
Council member Phil Mendelson (D-At Large) assailed Evans's proposal for a tax cap, saying it would disproportionately help more affluent residents. Mendelson also introduced a bill that would eliminate the sales tax on utilities for businesses in exchange for an increase in the gross receipts tax. He said it would result in the federal government paying more to the city.
Two measures introduced yesterday were aimed at providing tax relief for the elderly.
Evans and council member Carol Schwartz (R-At Large) introduced a bill to allow senior citizens who receive less than $50,000 a year in income to defer property taxes until their death. At that time, the deferred taxes would be due.
"This is not a tax forgiveness; it is a deferral," Schwartz said.
Also yesterday, council members Adrian M. Fenty (D-Ward 4) and Marion Barry (D-Ward 8) introduced a bill that would increase the homestead deduction for low-income seniors who own their homes and create an income tax credit for low-income seniors who rent.
A coalition of social service advocates has scheduled a rally today to call for more spending on housing, health and child care. It will release a report titled "Keeping Score: Where Will the Surplus Go?"
But yesterday belonged to the tax cutters, who said property tax relief is also high on the priority lists of city residents.
"This starts the debate on what the people want to spend their money on: property tax relief or more money on schools and social services," Evans said. "I don't want to sound Republican, but that's the issue."