Lower California home values mean lower tax revenue

The San Francisco Chronicle reports:

Hundreds of thousands of Bay Area residents will receive a pleasant surprise in the mail this summer - a notice that their property taxes are being cut because real estate values have dropped.

But this boon for homeowners will mean the loss of millions of dollars in property tax revenue, a pot that gets divvied up among K-12 schools, counties, cities, redevelopment agencies, community colleges and special districts - all already squeezed by California's financial crisis and the economic downturn.

Every Bay Area county assessor is doing downward revisions for big swaths of homes. And for some counties, it will be the first time anyone can remember that property tax revenue has dropped from the previous year.

In Contra Costa County, 150,000 homes will have their property tax bills reduced. The county expects to take a tax hit of about 7.6 percent, meaning its total property tax receipts will be about $134 million less than last year's.

You see the built in bias for artificially high real estate prices.