When the bubble bursts, and housing values go down (much like they did in the UK and Australia), then property tax values are going to go down – along with other local revenue streams. Problem is, that the local/state level has been asked to take on more and more of the services – while federal taxes have been lowered.
This simply is a bad scene. Many inner cities have problems with providing services as it is. Creating new revenue streams (or changing the way we do services) simply must come to the fore.
This kind of (relatively) rapid change may leave existing legislation and quite a few of the residents in the dust. That’s unfortunate, but right now many cities (including mine) are in an adapt-or-die situation. We have to gamble and change – or we’ll slowly die anyway.