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CFO Gandhi: "The Plot ... Sickens"

D.C. Chief Financial Officer Natwar M. Gandhi this morning publicly announced the city's latest revenue shortfall, which was detailed in today's Washington Post. In a breakfast meeting with the D.C. Council, Gandhi had the line of the day when, noting that the budget problems will grow worse next year, he quipped: "In 2010, the plot thickens--or should I say sickens."

The prime culprits in the revenue declines are the same economic indicators the rest of the country is grappling with in the recession: Falling incomes (and resulting income taxes) and property values (ditto).

But Gandhi noted a third factor. In recent years, the city has been paying out about $40 million to $50 million in fees to property owners who have appealed their property assessments--and resulting tax bills--and successfully gotten them reduced.

This year, however, Gandhi said the appeals are skyrocketing and the city expects to pay out about $100 million to property owners. Next year, the estimated figure is $120 million, he said.

That raised a question among council members about whether Gandhi's office is over-estimating values despite obvious evidence that property values are in free-fall--or whether the quasi-independent Board of Real Property Assessments and Appeals is erroneously awarding victories to property owners who hire skilled lawyers?

"Do we feel the need to explain to the board that what they do directly affects our revenues?" council Chairman Vincent C. Gray (D) asked. "This is scary."

Phil Mendelson (D-At Large) said board members are not well-versed in valuations and "property owners know how to manipulate the system."

Some members suggested giving Gandhi's office the right to appeal the appeals -- in other words, take cases to court if the city loses at the appeals board level.

But David A. Catania (I-At Large), a frequent critic of Gandhi's revenue projections, said no way. "It's about the balance of power," Catania said. "We do not want to give his office the right to endlessly fight the taxpayer."

The property board has come under heavy criticism recently. Former chairman Paul Strauss, who is also one of D.C.'s two shadow senators, was criticized for his management. And the person Mayor Fenty appointed to replace him came under fire when another member resigned and eviserated her management in a letter to city leaders.

Jack Evans (D-Ward 2), chairman of the Committee of Finance and Revenue, said the board has long had problems, largely because it is difficult to find qualified people to serve on a board that offers little pay but a large work load.

"Most qualified people make enormous money on the other side -- appealing," Evans said.

By David A Nakamura  |  February 25, 2009; 12:44 PM ET
Categories:  City Finances  
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Gandhi is a pathetically ineffective CFO, but he's right about the of Real Property Assessments and Appeals Board. When it comes to this and other administrative bodies, the deck is stacked against every single DC government agency. This is one of the reasons why it is so difficult to get corrupt, incompetent employees out of the government. Terminations are routinely overturned on appeal.

Posted by: IHeartDC | February 25, 2009 7:47 PM | Report abuse

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