District church groups and nonprofit organizations claimed victory yesterday for an intense five-week public campaign to persuade the District to withdraw a controversial tax proposal they said would have penalized them for providing services to the poor and needy.
Mayor Marion Barry announced in a statement late Monday that he was withdrawing the proposal, which would have made some currently exempted churches and nonprofit groups pay property taxes. It would have affected hospitals, group homes, private schools and halfway houses, according to service providers.
"After 40 days of extreme pressure, he the mayor finally capitulated," said James Kalish, executive director of the Washington Council of Agencies, a coalition of about 400 nonprofit groups that led the opposition to the proposal.
Barry in his statement pointed the finger specifically at his new director of the Department of Finance and Revenue, Melvin W. Jones, as having "moved too quickly" in developing the regulation. Barry said the regulations had not come to him for review before they were published.
The mayor said recently in an interview that people were overreacting to the proposal, which he said was simply an effort to clarify who was entitled to exemptions.
Jones could not be reached for comment yesterday.
Kalish said his group had tried to talk with the mayor since the regulations were published Jan. 11 but "couldn't get his ear" and that religious leaders had written Barry about their concerns but had not received a reply.
"I don't know why they city officials didn't withdraw them the regulations when we first asked four weeks ago," Kalish said. "They thought they could slip them through."
The groups were particularly upset that the regulations were published unexpectedly 10 days before they were to go into effect. When city officials agreed to delay the regulations and hold hearings on the proposal, the hearings were to be held in a small police lineup room and testimony was strictly limited, another part of the process that angered those affected.
The proposed regulations would have stripped a nonprofit organization of its tax-exempt status unless it offered its services "gratuitously" or "at a nominal charge," and a church would have lost its exemption unless it used 60 percent of its total floor space for religious worship more than 30 percent of the time.
The Rev. Clark Lobenstine, executive director of the Interfaith Conference of Metropolitan Washington, said Barry probably "didn't understand how serious the situation was" until a broad spectrum of Washington's religious leaders expressed outrage last Friday at a press conference organized by the interfaith conference.
"Everyone would have lost" by the tax proposal, Lobenstine said. "Those doing the most in providing services were the ones threatened by the mayor who wanted us to do the most."
But Lobenstine said the mayor "was not well served by his staff" and that it "made sense to me" that it was because of Jones, rather than the mayor, that the regulations got as far as they did.
Barry said the rules on property tax exemptions still need to be refined, but that he would involve nonprofit groups and churches in drafting new proposals to tighten up the rules. He said nonprofit organizations, and particularly churches, need encouragement in providing services such as day care, counseling, recreation programs and help for the elderly.