I'm going to assume you mean as a result of the recent
crash in housing values in California. Because California has a large population, with
a huge economy and any number of large industries, property values in big cities have
been higher than the rest of the country for years, and in the last five years,
considerably higher. The benefit of this is that property taxes, even if collected at
the same rate, would generate a lot more revenue for the cities and state to pay for
everything from schools to law enforcement to fire
departments.
The drawback is that housing bubbles burst,
and as services had been developed to match the amount of revenue that could be spent,
when the values dropped, the revenue did also, and sharply, which meant that existing
services had to be cut. These cuts were sometimes drastic, and we even saw some
counties and municipalities declaring bankruptcy.
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