Bloomberg now reports on a "fiscal flood that threatens to swamp local government budgets across the U.S. . . . " Bloomberg's article focuses on Michigan, but also includes data from Illinois, Nevada and New Jersey.
This trend indicates future revenue shortfalls for municipalities:
Municipal budgets “tend to lag economic conditions” by 18 months to several years, according to a National League of Cities report in October that Pagano [Unniversity of Illinois professor] co-wrote.
“The full weight of the decline in housing values has yet to hit the budgets of many cities and property tax revenues will likely decline further in 2011 and 2012,” the report said.
When the effect of today's appeals finally hits municipalities, we can expect more revenue raising measures that will create further declines in the value of real estate.