D.C. City Council member John A. Wilson (D-Ward 2), chairman of the council's Finance Committee, said yesterday he will propose giving city homeowners some property tax relief, including cutting in half the tax for senior citizens.
The City Council sets the property tax rate every July, after receiving recommendations from the mayor.
Mayor Marion Barry has recommended that the council keep the property tax rates in all classes at current levels.
Wilson's plan also would keep tax rates the same but would increase the homestead exemption -- an amount deducted from the assessed value of owner-occupied residential property -- from $9,000 to $15,000. The tax rate on these properties is $1.22 per $100 in assessed value.
The higher homestead exemption would help offset increases in assessments, which Wilson said rose by about 10 to 13 percent for most homeowners in the last tax billing and which result in higher tax bills even when rates stay the same.
Homeowners over the age of 65 who are retired and living on fixed incomes would only have to pay half their property tax bill under the plan advanced yesterday by Wilson, who called it a "trial balloon."
The council member said the tax relief would be paid for by the natural revenue growth that results from higher assessments and additions of taxable properties, such as from new construction. In fiscal 1985, the natural revenue growth was about $55 million, Wilson said, and this fiscal year it will be more than $40 million.
"The mayor has always spent it on programs ," Wilson commented in an interview. "I'm going to spend it first this time on tax relief ."
Barry proposed keeping rates at the current level for all classes of property for the tax year ending June 30: $1.22 per $100 of assessed value for owner-occupied residential properties; $1.54 for rental residential properties; $1.82 for hotels and motels; and $2.03 for commercial properties and vacant land.
"While I would like to be able to reduce the real property tax rates, I am unable to recommend a reduction at this time due to the continued uncertainties surrounding the Gramm-Rudman-Hollings federal budget cutbacks and tax reform," Barry said in recommendations to the council. Council Chairman David A. Clarke this week introduced Barry's recommendations as a bill at the mayor's request.
Wilson said he has heard from several colleagues interested in providing tax relief, particularly for elderly residents who may have lived in a house for many years and found their tax bill leaping just because their neighborhood is changing and assessments are rising.
"They other council members don't want to vote against it. I'd like to see the arguments against it," Wilson added. But he also said he wants to get reaction to the proposal before officially offering it for a vote. "I'm floating a trial balloon," Wilson said.
City law requires the council to set real property tax rates by July 15. If the council fails to act, a "calculated" rate would automatically go into effect, set at a level to yield the same amount of tax revenue as the year before, plus inflation.