D.C. City Council member John A. Wilson (D-Ward 2) plans to propose today a freeze on assessments of residential property in the city, which have more than doubled in the last five years, allowing city leaders to effectively increase property tax burdens without voting politically unpopular tax rate increases.
Wilson, who is chairman of the council's Finance and Revenue Committee and has talked of running for mayor next year, said yesterday that his proposal would provide tax relief to many long-time Washington residents who are being forced to sell their homes because they no longer can afford to pay tax bills that in some cases exceed their mortgage payments.
The city's property tax revenues have risen steadily since 1977, despite council approval of two major reductions in the tax rate for homeowners and the adoption of first a $6,000 and later a $9,000 homestead exemption.
"The yearly increases in assessments have been such that, even with tax rate decreases, residential real property owners are paying ever larger real property tax bills," Wilson said. "Persons purchasing homes in the District today wonder how long they will be able to stay in them when assessments increase by more than 20 percent a year."
Wilson's plan drew criticism yesterday from Council Chairman Arrington Dixon, who also has talked of running for mayor next year, and from Philip Dearborn, Mayor Marion Barry's chief financial adviser.
Dixon said it would be a mistake to relieve the tax burden of homeowners by placing a ceiling on the value of residential property instead of reducing the tax rates. "The approach has to be to stabilize the tax burden citizens pay, and my hope is that rates will be used rather than capping the value," Dixon said.
Dearborn said Wilson's proposed freeze would cause major inequities among some owners whose property might be valued at about the same amount at the time assessments were frozen but later had sharp disparities in value -- but identical tax bills -- because one property value was increasing at the time of the freeze while the other was in decline.
"It's not fair to send the same tax bills to people with varying values of property," he said.
Dearborn said the city would be better advised to reinstitute a tax indexing law, which the mayor and city council discarded two years ago, to prevent property taxes from rising at a faster rate than the rate of inflation.
The city currently levies a tax of $1.22 per $100 of assessed value for owner-occupied residential property; $1.54 per $100 for rental property and $2.13 per $100 for commercial units.
Under Wilson's proposal, which he intends to introduce as a City Council bill today, the assessed value of residential property containing no more than five residential units would be frozen at the current 1982 tax year levels, including the $9,000 homestead exemption for owner-occupied property.
Residential property that is subsequently sold would be reassessed to reflect the sale price.
About 82,000 of the nearly 158,000 taxable properties in the city would be affected by the freeze. The only way the real property tax on these properties could be increased would be if the mayor and the City Council agreed to increase the tax rates.
The proposed freeze would not apply to large apartment buildings or to commercial property, which would continue to be assessed annually at their fair market value.
The average single family home assessed at $72,400 for tax year 1981 was reassessed at $85,900 in 1982, with the taxes on that property increasing by $164, from $773 to $938.
Under the current system, the owner of such a home could expect the property to be assessed by another 20 percent and the tax bill to rise by an additional $209 in 1983, Wilson said. However, under Wilson's plan, the owner of that property would pay no additional taxes in 1983 unless the tax rate was raised.