When some of Northern Virginia's biggest landholders got their tax bills last month, they also got some welcome news: the assessed value of their land suddenly had been slashed in half, plummeting from $174 million to $88 million.

The beneficiaries of the change were the region's two major railroads -- the Richmond, Fredericksburg & Potomac Railroad and Southern Railway, which this year will save $1.2 million in local taxes on their 700 acres of suburban real estate.

The losers may be the taxpayers in Arlington and Alexandria where officials have appealed to Richmond for help, and in Alexandria's case, have warned that the city's real estate taxes may have to be raised to make up for the loss.

"It's so outrageous," said Alexandria Assessor David J. Chitlik, noting that state officials changed railroad assessment procedures despite promises that no change would be made without the General Assembly's approval.

What has particularly troubled some area officials is that the Virginia State Department of Taxation, in effect, has created two categories of railroad properties, wiping out a system that based a railroad's local tax bill entirely on the value of its land in that community.

Land that is considered operating property is now taxed at a sharply reduced rate, so much so that some Northern Virginia officials fear the railroads will "bank" their most developable land, classifying it as operating property and thus sheltering it from local taxes. After all, they note, Crystal City was built partly on railroad property.

Under the new assessment method, the state now values the bustling 305-acre Potomac Yard, which straddles the Alexandria-Arlington border, as if it were located on 305 acres of land in a rural Virginia county.

Precise figures are not available for the yard's assessment, but Chitlik estimates that the value of land there plunged from $2 to $6 a square foot to 50 or 60 cents a square foot.

No single jurisdiction in the state suffered as much as Alexandria did by the revaluation of the yard, he said.

Alexandria Mayor Charles E. Beatley, equally upset over the changes, said the only "possible plus" from the change is that city officials may give "a cold shoulder" to development of railroad land in retaliation for the revenues they will lose under the changes.

The changes in assessments came after one railroad, which state officials won't name, threatened to sue the state over the assessment procedures. RF&P and Southern officials said they are delighted with the changes and that their companies did not threaten the suit.

"We didn't precipitate it or have any role in it," said Richard L. Beadles, an RF&P vice president, in a statement echoed by Robert E.L. DeButts, a vice president for Norfolk Southern, which owns Southern Railway.

David E. Jordan, the taxation department's railroad appraiser, said the threats were not crucial in deciding to change the state's assessment methods when his agency assumed the job from the State Corporation Commission in January. He said that the agency made an "honest mistake" by failing to tell legislators of the need to change the way it assesses railroad property.

The old method was flawed in part because it did not take into consideration the unique role and problems of railroads as public service corporations, Jordan said.

So the state changed its former procedure, known as the "over-the-fence" method under which all railroad property was given the same value as nearby privately owned and locally assessed land. The District of Columbia uses this method.

Lee O'Bryan , who appraised railroad property for the State Corporation Commission, agreed with the Arlington and Alexandria officials who said that the railroads are likely to develop the land along their rights of way. "History has proven the railroads are developing property in that corridor," he said.

RF&P's Beadles, however, scoffed at the suggestion of developing the massive yard that is a nerve center for the operations of the Eastern Seaboard rail network. Beadles said, and the state's Jordan agreed, that the costs of moving the yard to a rural site would be financially prohibitive.

Arlington assessor James R. Vinson cautioned that RF&P once used the same argument in claiming that land that is now being developed as a 50-acre tract alongside Crystal City was worthless. In that case, the railroad merely moved two sets of tracks and is now building on a tract that is valued at almost $35 million, Vinson said.

Of Alexandria's 594 railroad acres, 497 now fall in the lower-taxed operating category. The change meant that the assessed value of railroad properties fell from $108 million in 1983 to $44.6 million this year, for a loss to the city of about $978,000 in tax revenues.

City Manager Douglas Harman said it will take a two-cent increase in the city's real estate tax rate of $1.41 per $100 assessed value to offset the lost revenues. "It's premature to say if we'll have to raise the tax rate," he said. "We'll make it through this year . . . but it's going to make the next fiscal year more difficult."

In Arlington, the assessment change has placed 83 of RF&P's nearly 146 acres in the operating category. As a result, assessor Vinson said, the assessed value dropped from $66 million last year to $43.4 million this year, for a loss to Arlington of about $233,000. That drop amounts to less than a penny on the county's real estate tax rate of 97 cents per $100 assessed value, but the revenue loss is no less annoying to county officials.

Neither Arlington nor Alexandria officials say they have any hope of reversing the new assessment method because the change has not hurt enough localities to force the legislature to act. Instead, the localities are lobbying for financial relief from the state for the lost revenues.

State Sen. Wiley F. Mitchell Jr. (R-Alexandria) said the Northern Virginia delegation will likely seek part of the state's projected surplus.