Two of the priorities for Indiana's new property tax reforms were to make property tax relief permanent and to deliver tax relief now, in 2008. Taxes in 2008 and 2009 will be lower than they were in 2007. But in some counties, the tax reform will deliver more relief in 2008 than in 2009. Some homeowners could see a tax increase between those years. Call it the "tax echo."

To help make property tax relief permanent, whole local government functions will be removed from the tax in 2009. The big one is the school general fund, which supports school operating budgets, mostly teacher pay. Next biggest are the county welfare funds, which are mostly aid to children in trouble. Several smaller funds will be removed, too. This will reduce property tax rates.

The state will take over these functions. The sales tax has already increased from 6 to 7 percent to pay part. The rest will be paid with money already in the state budget, which pays for property tax relief credits. In 2009, this money will be used to pay for the added school and welfare spending. The old tax relief credits will disappear. That means that total state spending will rise by the amount of the extra sales tax, and only the extra sales tax provides new property tax relief.

The relief is channeled to homeowners with an additional homestead deduction.

Next year, homeowners will subtract the existing $45,000 homestead deduction from their home's assessed values, and then subtract a new 35 percent supplemental deduction. Start with a home worth $100,000, subtract $45,000, then subtract 35 percent of what's left, and only $35,750 would be taxable.

The added deduction provides most of the property tax relief to homeowners.

The tax rate reductions from the levy takeovers are just about offset by the elimination of the tax relief credits. Homeowners will have lower taxable assessed value, so their tax bills will drop. Most other taxpayers will not see tax cuts. Some will pay more.

These big changes don't start until 2009. The local budgets for 2008 are already set, so it isn't possible to eliminate those property tax levies this year.

How to deliver tax relief now? The tax reform includes a one-year tax-relief plan for homeowners in 2008. The new sales tax revenue raised this year will be added to money budgeted last year to fund an extra homestead credit. This bigger credit should cut homeowner taxes by about a third, statewide.

Now for the tax echo. In 2008, homeowner tax relief will be delivered with a bigger homestead credit. In 2009, it will arrive through lower tax levies and a bigger homestead deduction. Each method delivers about the same amount of homeowner tax relief each year for the state as a whole.

But not for every county. Consider counties with high credit percentages, but low school general fund and welfare fund tax rates. They'll lose a lot of relief when the tax credits go away, but won't gain so much when the state takes over school and welfare levies. That means homeowners in those counties could see a tax increase from 2008 to 2009. That's the tax echo.

Don't be fooled. Homeowner taxes everywhere in both years will be lower than they were in 2007. In some counties, though, they just won't be as low in 2009 as they were in 2008.

Counties have options for dealing with the echo problem. They can let it happen, and explain to homeowners that they're still paying less than they did. That might take a lot of explaining.

Counties can delay some of the added state homestead credits, and pay part or all of them in 2009 or 2010. That could help smooth the transition to the permanent 2009 plan.

Or counties could adopt a local option income tax for property tax relief.

Income taxes would go up, but the added tax relief provided in 2009 would wipe out the tax echo.

So, a year from now, remember to compare your 2009 property tax bill to what you paid in 2007. Most homeowners will see lower taxes. It's just that they might not be lower than they were in 2008.