INDIANAPOLIS | Republican Gov. Mitch Daniels and Democratic House Speaker Pat Bauer remained at loggerheads Tuesday regarding the need for a special legislative session to address soaring residential property-tax bills in Indianapolis and other pockets of the state.

Daniels wants to do away with a controversial plan to send homeowners $300 million in partial property-tax rebates later this year and instead spend the money on up-front tax credits for those hit hardest by this year's hikes.

Bauer dismissed the idea as mere tinkering that won't "solve anything." But Daniels threatened to buck the state's top Democrat and call lawmakers back to the Capitol to revamp the rebates.

"Speaker Bauer's rebate program has one defender left, and that's him. He needs to come off it and move to a credit. The taxpayers need relief now," the governor said. "It may well take a special session. I would like to see some coalescing around a good idea first, but I won't hesitate to call one with or without (consensus)."

Bauer conceived the rebate plan this spring as a way to send direct relief to homeowners -- checks will average $236 -- along with a note crediting the General Assembly for the tax break.

At the time, state analysts predicted residential tax bills would rise an average of 24 percent this year, and the rebates would cut the average spike below 8 percent.

But homeowners in Indianapolis now are protesting tax bills that are coming in more than 35 percent higher than last year. And state officials are scrambling to head off similar hikes in at least seven other counties.