The pot is shrinking.

Douglas County commissioners received another stark reminder Monday about how difficult it will be to craft future budgets.

Led by a major slowdown in housing construction and home sales last year, the Douglas County Appraiser’s Office projected Monday that the county’s 2009 total valuation would decrease 2 to 4 percent.

That’s after no change in 2008 and several years of steady increases as the county grew.

“We’ve had fewer new housing permits issued for the city of Lawrence and Douglas County as a whole than we have in the past, and I believe that’s a reflection of the economy,” said Steven Miles, an appraisal manager II in the appraiser’s office.

The property valuation numbers are important because they tell elected officials essentially how much is available before they set property tax rates during budget talks.

The county relies on property taxes for about 55 percent of its revenue. County Administrator Craig Weinaug said the city of Lawrence relies on property taxes for about 20 percent of its revenue, and the school district’s local revenue comes entirely from property taxes.

The effects of the slowing economy showed up in the appraiser’s report to commissioners:

• Of the 29,291 residential properties in the county, 94 percent will see their values stay the same or decline.

• Residential property values were flat last year, after they had risen from 2 percent to 6 percent every year since 2003.

• Commercial valuation remained flat.

• In 2008, 1,066 homes were sold in Lawrence at an average price of $195,900 compared with 1,431 sales in 2007 at an average of $201,500.

• Of newly constructed homes, 59 were built in the county, which was a 45 percent decline compared with 2007. The new homes sold at an average price of $302,000.

• Home foreclosures are up 70 to 75 percent in the last year from about 80 foreclosures to about 130, Weinaug said.

Valuation notices will be mailed to property owners later this month. Residents have until 5 p.m. March 31 to request an informal hearing with the appraiser’s office.

County officials said they expect more people to request an informal hearing this year — after the appraiser’s office handled about 800 last year — because of the amount of attention real estate value has received nationally.

Weinaug said the county typically also loses about an additional 1 percent in valuation each year after appeals are adjusted.

County officials say the economic situation likely won’t make the picture any brighter, at least in the near future.

“I would anticipate the same type of trend for the next year or so,” County Appraiser Marion Johnson said.