Credit City HALL for admitting a gigantic goof that had sent Washington's world of good works into a state of philanthropic panic this month. No, says Mayor Barry now, it was not the intent of the government to strip all the city's nonprofit organizations of their tax-exempt status. And no, churches won't have to shut down all those fine services they run for the homeless and poor. They feared as much when the city set forth some weird tax regulations that would have based tax exemption on percentages of floor space used for religious worship.

These and other unreasonable-to-reckless rules for tax-exemption eligibility came to light in the pages of the D.C. Register, without a public hearing or even a warning to the groups potentially affected. They would have been damaging enough to charitable activities had they appeared in any language resembling English; but the wording of the regulations as published made the proposals all the more outlandish. Apparently the intent of the local government was to tighten the connection between strictly religious/charitable works and tax exemptions, while taking a harder tax look at other operations going on under the label of nonprofit activities. No doubt there are some organizations whose uses of various properties should not entitle them to tax breaks -- and the city should be reassessing its standards and policies on this point. But that is a big issue that should be open to public comment and debate, as it now is scheduled to be.

Three days of hearings have been set in February, and new, allegedly clarifying language will appear in the D.C. Register. Fair enough. By then city officials should be prepared to explain exactly what they have in mind -- or, barring that, to drop all proposals for changes until they can come up with a coherent and justified policy.