Some positive budget news from the District’s Chief Financial Officer today: thanks to an uptick in tax revenue, the city’s budget gap for fiscal year 2012 has been reduced from as high as an estimated $600 million to about $322 million.

The District will reportedly bring in $5.3 billion in FY2012, a 5.3 percent rise in revenue from 2011. CFO Nat Gandhi attributed the rise in revenues to commercial property taxes during a press conference this afternoon. According to Gandhi, the District is even “far, far better off” than other major cities across America. He did note, however that the city’s finances could be in trouble if the federal government continues to shrink or shuts down for a time.

What does it mean in the short term? Well, $322 million is still an incredibly large deficit, and budget consideration will still be a bear for the Council come April, when you can expect another round of service providers lining up to tell the legislature why they should be spared. But at least the situation isn’t quite as dire as previously believed. When asked what this development meant for a possible tax increase, Mayor Vince Gray said that a hike remains on the table — of course, with the deficit being slashed nearly in half because of taxes, Councilmembers opposed to an increase might intensify their objections to raising rates further.