Reuters: For local governments housing crisis keeps hitting

The bust in the housing market that began nearly three years ago has hit them like a slow-moving avalanche, first striking with abandoned properties and rising homelessness. Some also saw drops in sales tax revenue as people, feeling poorer after the slide in home values, pared back on shopping trips.
Now, property taxes are falling. The housing slump pushed down property values but that has only recently affected property tax collections, as there can be as much as a three-year lag in assessing properties.