Vacant Property Tax Rate could go down

By: Michael Neibauer

Examiner Staff Writer
July 31, 2009

The D.C. Council is poised to halve the 10 percent tax rate on vacant property, a levy several members consider punitive and generally ineffective in spurring owners to rehabilitate their languishing properties.

The move, strongly backed by Council Chairman Vincent Gray, is unusual given the District’s budget woes. But city finance leaders told council members that the reduction would not affect 2010 revenues, which have fallen short about $150 million.

If approved Friday when the council votes on its revised fiscal 2010 budget plan, the tax cut would cost the city $10.8 million in 2011.

At-large Councilman Phil Mendelson, who is backing the reduction, said the $10 per $100 of assessed value rate was so high that “it will actually make it difficult for some property owners to sell or put their property back to use.”

Mendelson said he supported the Class 3 tax as an “economic consequence” for allowing a property to languish, just not at 10 percent.

The Class 3 rate was doubled as part of the fiscal 2009 budget, and 3,609 properties were billed this year at the higher rate, according to tax data. But complaints have poured in from owners, who say they were unfairly taxed, or that the tax costs them so much that they are unable to reinvest in the property.

“I would think that with a $150 million deficit, the council would be looking for creative ways to make up the cash,” said Shaw resident Brian Smith, a 10 percent tax rate supporter. “Instead I am sure this is just another sign that the law-abiding taxpayers will get another surprise — less services and a tax increase, maybe even something creative like an Adams Morgan pizza tax.”

Ward 4 Councilwoman Muriel Bowser, meanwhile, is crafting language that would retain the 10 percent rate for the worst offenders. Her colleague, 18-year council veteran Jack Evans of Ward 2, scoffed. There hasn’t been an effective Class 3 tax yet, he said, and that’s after decades of trying.

“It’s not an easy tax to figure out, but it would be unacceptable to me to give these scofflaw property owners a tax break while we’re cutting police officers and teachers,” Bowser said.


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