INDIANAPOLIS -- Indiana House Speaker Pat Bauer on Monday suggested several ways that government could lower homeowners' soaring property tax bills, including raising county income taxes and tapping the state's larger-than-expected budget surplus.

Bauer, the House's leading Democrat, made his suggestions two days after Gov. Mitch Daniels offered his own ideas in a letter to lawmakers. Bauer also firmly asserted what the Republican governor has said is possible: that Marion County homes were unfairly assessed and that a new assessment is needed to tax owners fairly.

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Capitol WatchBlog: Property Tax Crisis

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"It's very obvious that the (Marion County) reassessment was botched, and the governor does have the power through the Department of Local Government Finance to order a reassessment," Bauer told reporters at his Statehouse office.

Daniels has said he wants the DLGF to determine whether high property tax bills in some counties, including Marion County, were due in part to unfair assessments and whether those assessments need to be redone.

Bauer also said counties are failing to use a tool that lawmakers gave them earlier this year: the power to raise county income taxes to offset the need for higher property taxes.

Bauer said the state should provide a further incentive to do so by paying an additional portion of a county's child welfare costs if it raises its income tax by a half-percent.

"If they did that here in Marion County, it'd cut the (property tax) increases in half," Bauer said.

Bauer also said it might not be a bad idea to use part of the state's larger-than-expected budget surplus to lower property taxes.

The state ended the fiscal year with a surplus of about $1.28 billion, but little of that money would be available for spending.

Much of the money is set aside in Indiana's rainy day savings account and other reserve funds, leaving $537 million in the state's main checking account, officials said. The new two-year budget that took effect on July 1 allocates about half that to make up back payments owed to local governments, leaving about $252 million in spendable cash.

Daniels, who has warned against what he called "raids" on the state's surplus, probably wouldn't agree with using it to provide tax relief, 6News' Norman Cox reported.

State Rep. Eric Turner, R-Gas City, said Bauer's on reassessment and spurring counties to raise their income taxes were fine. But he said it might be time to get rid of property taxes altogether.

"The residential property tax payer has had it with the unpredictability of property taxes, and they're looking for another way to be taxed that is very predictable," Turner said.

According to estimates last spring, homeowners were expected to see a 24 percent raise in their property taxes this year, but residents in parts of some counties, including Marion County, have seen much higher increases.

Earlier this year, lawmakers approved rebates that were expected to lower the average increase to just less than 8 percent, but the rebates won't be sent until after the year's second installment of property tax bills are mailed in the fall.