Palm Beach County's real estate values will continue to fall next year by 10 percent or more, say county leaders, who estimate the deeper slide will open up a $110 million budget gap in 2011.

The prospect of another gaping budget hole - this one, about 10 percent of the county's $1.1 billion operating budget - will likely require a fundamental rethinking of what services the county government should provide and at what cost to taxpayers already grappling with double-digit unemployment amid the worst financial crisis since the Great Depression.

Even as the residential real estate market shows signs of recovery, commercial property values, which had shown some resilience, are now plunging further, said property appraiser Gary Nikolits. He predicted a lagging commercial real estate decline would at least offset any slowing or stabilizing of residential values.

"I think next year is going to be at least as tough, if not tougher," Nikolits said. "I wish I could be more optimistic about it."

The dire forecast emerged alongside new estimates that said Palm Beach County's tax base is on track to fall 12.9 percent this year, a decline not seen in more than a century, according to Nikolits. The numbers were a slight, albeit insignificant, improvement over last month's estimate, which said the county's property values would drop 13.5 percent.

To collect the same amount of money this year as last year, the county will have to raise its property tax rate 14.9 percent.

Meanwhile, county budget-writers learned earlier this week that the state will pass down about $8 million less in revenues and sales taxes this year, bringing state contributions to 2001 levels.

"We can't catch a break," said county budget director Liz Bloeser.

The year stands in stark contrast to almost any prior year in Florida, where it seemed property values would increase as sure as the sun would rise. Real numbers always surpassed conservative expectations. County and city leaders made an annual habit of slashing tax rates. And still, more tax money rolled in, as values surged.

"This is exactly 100 percent different than the way it used to be," said Bloeser. "It's exactly stair-stepping back down the way we went up."

Cities are sharing in the pain. This year's hardest-hit appear to be Loxahatchee Groves, Lake Worth and Greenacres, whose property values are expected to plunge 26 percent, 24 percent and 22 percent, according to latest estimates.

Only Briny Breezes is expected to see an uptick - of about 2 percent, the figures show.

Resilient municipalities include Pahokee and Palm Beach, where values are expected to dip just 3 percent, the figures show.

But the Village of North Palm Beach, which expects to see a 9.6 percent drop in values, expects to make further cutbacks, despite eliminating the assistant police and assistant fire chief positions and outsourcing maintenance at its golf course and parks, according to village manager Jimmy Knight.

In Riviera Beach, which faces a 15.7 percent drop in its tax base, the city council is considering cutting up to 60 positions, including police officers and firefighters; imposing a mandatory one-day-a-month furlough for city employees; and dipping into reserves to balance the budget.