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Mayor Richard Daley on Tuesday mounted a blistering attack on the Cook County assessor's office for the rising tax burden on Chicago homeowners and called for immediate reforms to ease the load.

Delivering his annual State of the City speech at a downtown luncheon meeting, Daley once again expressed anger and embarrassment over his administration's trucking scandal. But he quickly changed the subject.

"Quite frankly, I think it's time to blow up the property tax assessment system and start over," the mayor declared.

Never mentioning Assessor James Houlihan, a fellow Democrat, by name, Daley said that "the assessor's office has shifted more of the local property tax burden to residential property owners" and has changed the process for receiving exemptions in such a way that there are "more than 80,000 homeowners who qualified for them but didn't get them."

And Daley said that "we need to change the unfairness in the system and take the mystery out of the way the Cook County assessor's office values homes and apartments."

The assessor is required to base assessments on the market value of properties, and Daley acknowledged that skyrocketing values during the late 1990s have played a role in increases faced by homeowners.

But he said that "too many homes [are] being over-assessed." He did not provide proof of faulty valuations, pointing out only that while 35 percent of the property tax burden in the county was borne by homeowners in 1997, the figure now is "42 percent and rising."

Houlihan said in an interview that the hot real estate market, and not his office, is to blame for fast-rising tax bills.

"I don't think they are over-assessed, but the increases are dramatic, and they reflect the marketplace," he said.

The assessor also blamed market forces for the shift in the tax burden from commercial to residential property owners.

"The rate of appreciation of homes is far greater than that of commercial or industrial property."

Houlihan said Daley was mistaken in his assertion that 80,000 property owners eligible for an exemption had not received a break. "I think that's a staff misunderstanding," he said.

Daley's criticism was viewed in some quarters, in part, as a diversionary tactic to redirect attention from the scandal in the Hired Truck Program. Mayoral aides insisted that the focus of the speech was determined before the scandal broke late last month. They also said that Daley has proposed changes to the assessment system designed to prevent steep tax increases but has failed to get Houlihan on board.

A Houlihan-backed bill that would limit residential assessment increases to 7 percent a year failed to pass in Springfield last week. Daley said he shares the concern of those who contend the measure would shift the tax burden onto renters and low-income homeowners whose property values do not rise as fast as those of others.

He called for legislation that would impose the 7 percent cap but also protect low-income homeowners, low-income renters and longtime homeowners.

Daley said he will seek passage of bills ranging from one that would create a state-funded rental subsidy for families making less than 30 percent of median income to another that would increase the homeowner's exemption from the current $4,500 to $5,500 for people not covered by the 7 percent cap.

If the cap ultimately fails to pass, he said he will work with the Cook County Board to limit assessment increases for many people who have lived in their homes for more than four years to no more than 15 percent above the average citywide increase.

"As a short-term solution, I believe the assessor's office should review immediately the assessment of every residence before property tax bills go out later this year," Daley said. "If that can't be done, then the assessor should at least reconsider every property tax appeal. According to that office, 70 percent of all residential appeals were rejected this year."

Houlihan was noncommittal.

"We feel pretty comfortable that the appeals and that the assessments [are] accurate," he said.

Reassessing every property "may be the thing to do, if Springfield doesn't act," Houlihan said. But he said doing so "may not be possible" because it probably would delay tax revenue payments to school districts and municipal governments.

To underscore Daley's concern, his aides distributed a color-coded map of assessment patterns that appeared to indicate the greatest increases were concentrated in predominantly black neighborhoods in parts of the West and South Side.

That elicited a statement of "outrage" from Cook County Commissioner Earlean Collins, who declared she would press the County Board to remedy what she termed an "inequity" or turn to the courts for relief.

On the subject of the Hired Truck scandal, Daley in his speech decried "the apparent waste and favoritism" that has been uncovered.

Daley said he knows that "accepting responsibility is not enough. The burden is on me and my administration to show that we will live up to the commitment to put taxpayers first."

He did not mention a continuing federal investigation of the Hired Truck Program or the arrest on corruption charges of its former manager, Angelo Torres.