Home values dropped 17 percent this summer compared with the same third-quarter period last year, the Standard & Poor's/Case-Shiller Home Price Index said.

At the same time, property tax collections rose 3.1 percent, the Commerce Department's Bureau of Economic Analysis reported.

As a result, state and local governments are projected to collect a record more than $400 billion in property taxes this year, USA Today reported.

One reason is that state laws that prevent big tax hikes when property values soar also block big tax drops when values sink, the newspaper said.

Property taxes -- collected mostly for public schools -- have escaped serious damage, even as the U.S. housing market collapsed, hurting sales and income tax collections.

As a result, public education is one of the few economic sectors still adding jobs, the newspaper said.

Property taxes haven't fallen since 1934, the Bureau of Economic Analysis said.