INDIANAPOLIS - Amid an escalating property tax crisis, Gov. Mitch Daniels on Wednesday stopped just short of convening a special session but said he is formulating some proposals that would need the Legislature's approval.
"The ideas I'm looking at would require a special session," Daniels said of efforts to deal with a groundswell of complaints about sky high property tax bills.
Daniels didn't give specifics, but hinted they could involve changes to the $300 million property tax relief the Legislature approved in April - such as crediting taxpayers' fall bills instead of issuing rebate checks or targeting the relief to those areas hardest-hit.
Long-term, Daniels suggested getting to the "root cause" of property tax reform would involve restructuring multiple layers of government at the town, city, township, county and school levels.
"We will never get the property tax problem of this state under control until we fundamentally modernize local government - civil and school - from its current condition, which is essentially that of 150 years ago," Daniel said.
He plans to announce a proposal soon, but wouldn't divulge details.
"I have formulated an idea that would require legislation. It's just too soon to tell whether this is a workable idea or a saleable idea or the best idea," he said late Wednesday.
A new reassessment system called "trending," coupled with the phase-out of the state's inventory tax, has produced eye-popping property tax increases for some homeowners.
But some homeowners have seen significantly higher increases, sparking outrage and fueling anti-tax protests outside the governor's mansion that drew hundreds July 4 and again Saturday.
"This the hottest issue that I've ever seen," said Rep. Woody Burton, R-Greenwood. "The second hottest is probably immigration, but that's a national issue."
Burton, who is also a real estate agent, said retirees may be forced to sell their homes if they can't afford their tax bills.
Another property tax protest is scheduled for Sunday at Monument Circle in downtown Indianapolis from 9 a.m. to 1 p.m. CDT. Organizers have dubbed the demonstration "Black Sunday" and asked protesters to wear black T-shirts.
Although their cities are not hit as hard as Indianapolis, two mayors in Southwestern Indiana expressed frustration that municipal governments are being blamed for what they see as a state-level problem.
"They have got to start listening and stop playing politics," said Mayor Gail Kemp of Huntingburg, Ind. "They have got to resolve the fundamental issues on property tax, and quit putting the blame on somebody else."
Kemp said Huntingburg residents are blaming Indianapolis, not the city or Dubois County, for increases.
In Washington, Ind., Mayor David W. Abel said some homeowners there have seen 25 to 30 percent increases.
"We know the city is not going to get 25 to 30 percent more income," he said. So a special session of the Legislature might be a good idea, he said.
Local governments must pay for essential services such as police protection and paving streets.
Decreasing property taxes would mean increasing other taxes elsewhere, he said.
"It has to come out of somebody's pocket," Abel said.
Daniels announced other measures Wednesday that do not require the Legislature's approval. He said counties will be given an extra two months, until Oct. 1, to decide whether to adopt new local-option income taxes they could use to offset their local property taxes.
Meanwhile, a powerful state senator, Luke Kenley, R-Noblesville, will hold a public hearing for homeowners to testify about the impact of property tax increases. The bipartisan Commission on State Tax and Financing Policy will meet at 9 a.m. July 23 in the Indiana Government Center South auditorium, 402 W. Washington St., Indianapolis, to take public testimony.
The Associated Press contributed to this story.