California Property tax revenue plummets with home values

The San Francisco Chronicle gives an example of the situation in California :

A four-bedroom home in Antioch sold for $700,000 in 2005. Annual property taxes were $7,000, or 1 percent of the purchase price. If the home goes into foreclosure and sells for $400,000, a common scenario in a county where values have plummeted, the new tax would be $4,000 - or $3,000 less.

The California governmental class was counting on higher and higher property values to rake off higher revenue each and every year.