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Alison and Patrick Whitty's three-bedroom brick rancher in Silver Spring was once worth a half-million dollars.

But by the time they purchased the house in 2008, the market had tanked and the price was $385,000.

The Whittys — helped by Alison's father, David Boyd — questioned why they were being asked to pay property taxes based on a $500,000 assessment when their home was only worth $385,000 on the market.

They began a lengthy, multi-step appeals process that Boyd said few take on, and so far they have been successful.

But the Whittys' case is instructive for a couple of reasons. Their appeal is more the exception in Maryland, which has bucked a national trend, fueled by the economic recession, in which many states are seeing property assessment appeals spike.

Also, it gets to the heart of a precarious numbers game: Unlike in a number of states where the housing market has tanked, Maryland has yet to see a decline in property tax revenues, although experts say it is likely coming in the near future.

A recent New York Times story detailed how some states are being swamped with property assessment appeals as a result of the housing market decline. Maryland might have escaped the recent stampede of appeals because about half the properties that were assessed in 2009 had declined in value, negating the need for an appeal, said Hank Sikorski, state supervisor of assessments for the Department of Assessment and Taxation.

"I think when people see the value go up and they see it's faster than their perception of the true value, then they are motivated to appeal," said Neil Bergsman, director of the nonpartisan Maryland Budget and Tax Policy Institute. "I think just, psychologically, if your assessed value is going down or staying about the same you're not going to have the same emotional response."

In January 2009, the state assessed 700,000 properties and received 38,300 appeals, or about 5.5 percent, Sikorski said. That was a decrease from January 2008, when 48,149 appeals were requested out of 700,000 assessments, or about 6.9 percent.

The number of appeals in 2007 was 32,500 out of 700,000, or 4.6 percent, Sikorski said, adding that he can't predict the number of appeals when a round of assessments goes out in January 2010.

Many homeowners do not bother to appeal their assessments at all because they think the cap provided by the Homestead Tax Credit is protecting them, he said.

A Maryland law known as the Homestead Tax Credit has capped increases at 10 percent per year. Because home prices rose so steeply through about 2006, assessed values still have not caught up to the market values of many homes — meaning property tax revenue has continued to increase statewide.

"Very rarely (does declining home value) affect property tax revenue," Sikorski said. "Homeowners have a Homestead Tax Credit, so they are not paying on the full assessed value. They are paying on a portion of it."

In fact, property tax revenue brought in statewide is up 6.3 percent on average, according to a state legislative analyst — even as homeowners have seen their property values decline.

Counties can set their cap at less than 10 percent, but not higher.

In Maryland, properties are assessed on a three-year cycle.

With the Homestead Tax Credit program, if a property was previously assessed at $500,000 and the property owner had accrued a Homestead Tax Credit of $150,000 over time, the owner is only paying taxes on $350,000 of assessed property value.

If under a new assessment the property declines in value and is now assessed at $400,000, the tax cap means the owner would pay taxes on a $385,000 property — 10 percent more than the taxable assessment from the year before.

But, the new taxable assessment of $385,000 is still below the home's most recent assessment of $400,000 — therefore the owner's property tax bill would rise.

However, experts say that eventually assessed value will catch up to market value, and property tax bills could go down in the next two to four years — if the housing market does not rebound by then.

That would force counties to consider cutting back services or programs — or even raise taxes — according to Bergsman.

Herbert H. McMillan, a former Republican delegate from Anne Arundel County, said a drop in tax revenue will cause officials to raise the tax rate to make up the difference.

"They're going to get it one way or the other," said McMillan, president of the Maryland Tax Association.

Boyd, a Towson University professor and head of Property Tax Payers United of Baltimore County, says that property assessments have been inflated — an effort some believe is designed to bring in more tax revenue over time.

State officials say that is not true.

Actually, property owners have been paying higher taxes all along, according to McMillan.

As assessments have skyrocketed, lawmakers have cut tax rates at insignificant levels, meaning they can claim to give taxpayers a break, while continuing to collect more revenue, McMillan said.

In states like Florida and California, where the housing market has declined precipitously, officials already are seeing a drop in revenue, according to The New York Times. Some counties in those states are looking to layoffs or tax increases to balance their budgets, the report states.

In Maryland, counties collect property taxes and turn over a certain percentage of them to the state. That amount has increased for each of the past three fiscal years, according to a spokeswoman for the Comptroller of Maryland.

In fiscal 2007, the state took in $552.5 million in property tax revenue — out of $12.39 billion in total revenue. In fiscal 2009, the amount was $698.6 million out of a total of $12.9 billion in revenue.

The increase in property tax revenue has been seen at the county level as well.

In Frederick County, $226 million was collected in property taxes in fiscal 2009, according to director of treasury Lori Decker. In fiscal 2007, that amount was $184 million.

Frederick County caps increases in assessable property value at 5 percent.

Raymond Wacks, budget director for Howard County, said property tax revenue rose from $337.5 million in fiscal 2007 to an estimated $402 million in fiscal 2009.

Howard County caps the increase in assessable property value at 5 percent.

Countywide, residential property value has declined about 15 percent, Wacks said. There are some indications that when assessments go out in December, property values in some areas will have dropped as much as 20 percent since the last assessment three years ago, he said.

In Montgomery County, Robert Hagedoorn, division chief of treasury, predicts that the Homestead Tax Credit will have disappeared — meaning owners will begin paying property taxes based on their homes' actual assessed values.

This will cause property tax revenue to remain flat or decrease, he said.

The Homestead Tax Credit lets homeowners have more consistency in their tax bills, Hagedoorn said.

"It levels it off," he said. "It takes away the peaks and the valleys. It makes it more manageable for folks."

In the most recent assessments, which were completed in December, home values declined 16 percent. However, property tax did not decline, Hagedoorn said, primarily because of the Homestead Tax Credit system.

When property assessments are completed again, Boyd said those who are unhappy with those assessments have the option of appealing.

But appealing an assessment means a long and arduous process that discourages most from even beginning, he warned.

The Whittys have been through two steps and have had the taxable assessment value of their home dropped at each stage. They are only about $32,500 away from their goal, Boyd said.

The couple presented comparable properties in their area that have been sold recently when appealing the $500,000 assessment; all of the properties showed declining value. However, Boyd said officials in Montgomery County were reluctant to lower the assessment and did not consider the struggling housing market when making the assessment.

Officials offered to lower the assessment by $30,000, but Boyd said the couple is continuing to fight the amount. During the second step of the appeals process, which included stating their case before a state appeals board, the assessment was lowered by more than $80,000.

The couple is now moving on to step three — a hearing before the Maryland tax court.

"Many people will stop after the first step," Boyd said. "They get discouraged and are disgusted."