DENVER -- While Colorado property owners know their home values are falling, they may be surprised to learn that their taxes haven't changed.

It's no mistake. The state tax system has a lag built into it so that governments can plan their budgets and taxpayers can appeal decisions they don't agree with. The tax bills that are coming out now are based on evaluations done in June 2006. That was before the housing market collapsed and foreclosures drove home values down.

JoAnn Groff, property tax administrator with the state of Colorado, said the system has a good and bad side for Colorado taxpayers.

The down side is that as home values fall, taxes are owed on a higher value.

Residents see the up side when the housing market is booming.

"When we are in a market that is growing dramatically and prices are going up fairly dramatically, then the lag time really does work to the advantage of the taxpayer," Groff said.

Governments and school districts that count on property tax revenues are already bracing for the downturn.

Groff said the full extent of the losses will be felt in 2010.