(WSBT) Higher property taxes are a big problem for many Hoosier homeowners. The governor says he wants to get to the heart of the problem.

Governor Mitch Daniels says the state's system of local government is costly and outdated and that system is the big reason behind the state's property tax problems.

He's organizing a commission to study ways to re-invent local government. Former Governor Joe Kernan and State Supreme Court Chief Justice Randall Shepard will co-chair the Blue Ribbon Commission on Local Government Reform.

“Our local governments were really organized a century and a half ago,” Kernan said. “I don't know of many organizations that have the same structure they had a century and a half ago that are still around.”

St. Joseph County Commissioner Mark Dobson hopes the commission looks at the issue of consolidating city and county governments.

“There have been a lot of successes in other communities,” Dobson said. “The consolidation efforts have worked and worked well.”

But Commissioner Bob Kovach disagrees.

“People automatically think if you combine and eliminate, you're going to automatically save dollars,” Kovach said. “That's not necessarily true.”

Kovach says many departments would need to have the same amount of total employees after a consolidation.

He says the issue of property taxes has long been a political blame game, with both state and local governments pointing fingers at one another.

The commission is expected to release its findings in December. That's in time for the General Assembly to tackle the topic in the next session.

The governor also ordered an examination into property reassessments across the state. The administration believes commercial properties may not have been assessed highly enough and that may have shifted the tax burden to homeowners.

State Rep. Jackie Walorski has asked the governor to direct the Department of Local Government and Finances to examine the numbers in Elkhart County, where assessments went up an average of 25 percent.

The governor's office office says Elkhart County, among others, will receive special scrutiny.