"This is the worst decline in assessments and property value since the Great Depression here in Santa Clara County," said county assessor Larry Stone.
People losing their homes to foreclosure was the first shoe to drop. Now the empty store fronts are putting new pressure on the economy. Santa Clara County lost 4,000 large and small businesses in the past year and the tax impact is huge.
The countywide assessment dropped an average of 2.43 percent. That amounts to a loss of $7.4 billion. The loss was steepest in Morgan Hill and Gilroy, both down 6.1 percent. Palo Alto was the only city in the county to see an increase of a tiny 0.4 percent gain.
"I don't think you're going to see a rebounding of commercial and industrial and retail properties until we see some significant job growth occur," said Stone.
In 1933, the county's assessment rolls fell 3.19 percent. It should be noted that assessment rolls dropped 21 percent in 1979 following passage of Proposition 13. However, Stone says that was a result of political and not economic issues.
And there are signs everywhere that more businesses are shutting their doors.
Small retailers, such as Furniture 2000 store that's going out of business in Cupertino, are key to keeping people employed, but when they close, the jobs evaporate.
The store used to employ eight sales people. As it liquidates its stock, only four are working. As soon as the showroom is empty, their jobs will be gone.
Owner Sonny Le says his will be the county's next business closure.
"Now I look further, I don't see anything… any sign of recovery or anything that I can stay in this business anymore," said Le.
The drop in assessments will have an impact on schools and government agencies.
Other school districts tell us community colleges will feel the most pain. That's because most K-12 districts, which get their funding from Sacramento, are "topped off" by the state when there is a revenue shortfall. San Jose Unified School District is one such example.
West Valley Mission Community College District has seen a 29 percent spike in enrollment in the past three years at its two campuses. Budget cuts have already led to layoffs and additional revenue losses will impact access to classes aimed at honing skills to get back to work.
"Sometimes you'll enroll, but we won't be able to place you in every class you need, and this has the very serious economic effect to the state of prolonging the time students spend trying to get the education they need," said chancellor John Hendrickson.