District homeowners receive a cut in tax based on a law approved by the D.C. Council last year. The real estate tax rate will fall Oct. 1 to 88 cents, from 92 cents, per $100 assessed value. The decrease is the result of a law that automatically lowers the property tax rate if tax revenue surpasses projections.

But the tax rate reduction also means that the city will not collect more than $17 million that it would have amassed under the old rate.

The institute released a study yesterday showing that middle-income District residents earning $50,000 to $150,000 annually are paying lower taxes than do their neighbors in the Maryland suburbs and in most communities in Northern Virginia.

In recent years, the D.C. Council has approved several tax breaks on grounds that it wanted to create tax parity with the rest of the region.

Council member Jack Evans (D-Ward 2), chairman of the Finance and Revenue Committee, said he disagreed with some of the study's findings, because the institute did not include parking and sales taxes, which also affect D.C. residents.

According to the study, sales taxes were not included because it was difficult to estimate a family's purchases. In addition, District residents cross borders to shop in suburban malls, and suburban residents often commute to the District.

Julia M. Friedman, the city's deputy chief financial officer for revenue analysis, said that other taxes, such as those on utilities, should have been considered and that the report does not reflect the majority of District residents who are renters and earn less than $50,000 a year.

Edwina Baniqued