The nation's two rival teachers' unions, which compete for members around the country and feud over legislation in Congress, now are engaged in a sharp dispute over real estate taxes in Washington.

The American Federation of Teachers, a 520,000-member affiliate of the AFL-CIO, has charged that its 1.8 million member competitor, the National Education Association, is "cheating District of Columbia residents" out of about $282,000 in property taxes because the NEA headquarters building on 16th Street NW is tax-exempt.

The exemption for NEA was granted by Congress in 1906. But in recent years, AFT charges, NEA has changed from a "research group...to a labor union," and now should pay property taxes like all other unions in the city.

"We're holding on to something that was granted to us," NEA lawyer Maurice Joseph said in an interview. "We continue to believe we're entitled to it.

"They're probably just frustrated [at AFT] in their various organizing efforts and they just need something to rally their troops," he said.

D.C. tax records show that NEA's eight-story headquarters at 1201 16th NW is assessed at $15.4 million. If NEA were not tax exempt, it would owe $281,985 in city property taxes per year.

NEA's exemption is similar to that granted by Congress to 40 other national groups which own property in the District, including the National Geographic Society, the Daughters of the American Revolution, and the American Chemical Society.

Together, their properties are worth about $305 million and would produce about $5.5 million in tax revenues, according to city estimates.

Under the home rule charter, the City Council has had the power to revoke these special exemptions since 1975. Council legislation introduced to do that has not been passed.

On June 27, AFT wrote to D.C. finance director Kenneth Back, asking that he revoke NEA's exemption on the grounds that NEA no longer was using its property for "educational" purposes as envisioned by Congress in 1906.

Back replied last week that after inspecting the property his department concluded that NEA was using it in a way that was "consistent with the purposes" in NEA's congressional charter.

"Basically, [NEA] is a professional organization to further the advancement of education," said Lawrence Woodwell, supervisor of the real property assessment review section in the D.C. finance department. "Recently, they have taken a slightly different posture in their efforts to advance their cause. We don't see a contradiction there."

NEA lawyer Joseph said his organization would be willing to pay D.C. property taxes if other exempt groups also were required to do so. He suggested that the tax be phased in over several years.

But AFT public relations officer Phyllis Frank said, "It's just outrageous that NEA doesn't pay any property taxes. They were declared to be a union by the Internal Revenue Service last year, and they have been acting like one since the mid-1960s."

Franck said AFT itself rents space for its national headquraters at 11 Dupont Circle. The office is in a private building, she said, and the landlord considers property taxes in determining the rent. CAPTION: Picture, Headquarters of National Education Association has been tax-exempt since 1906. By Lucian Perkins - The Washington Post