Housing Downturn Means Higher Taxes?

The New York Time has an article about one of the side effects of the downturn in the housing market. Since flattening property values means flattening tax revenues, some cities are starting to talk of raising taxes to compensate.

It seems almost certain that this problem is eventually going to touch us here in DC, too, and that makes me worry about our city's continuing struggle to improve its services. Nobody disputes that we have a long way to go in a lot of areas, including fixing the public schools, improving and enlarging MPD, and continuing to work on revitalizing our neighborhoods through things like the 14th Street Transportation and Streetscape work; and in some of those areas, we've continued to struggle despite throwing more and more money and resources at the problem.

But if we haven't been able to achieve success in these areas during a time of massively increasing year-over-year revenues for the city, how can we hope to succeed when those revenues inevitably take a dip? Are our leaders prepared for this scenario? Are they ready to make tough choices about efficiency and triage, or will their solution be to hike up the tax rates to make up for budget shortfalls?