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Rendell defends record on property taxes

| Tuesday, Feb. 14, 2006

HARRISBURG, Pa. (AP) - Gov. Ed Rendell defended himself Monday against Republican gubernatorial hopeful Lynn Swann's charge that he has done "nothing" to combat soaring property taxes, saying the legalization of slot-machine gambling was a crucial step toward one of the biggest tax cuts in Pennsylvania's history.

Rendell said he remains optimistic that the GOP-controlled Legislature will follow up soon and pass new legislation to funnel an estimated $1 billion a year in slots revenue to homeowners in the form of property-tax reductions.

"Harrisburg's been trying to give property-tax relief for 30 years," the Democratic governor said at a news conference on another topic. "If we get it, the only reason we will get it ... is because we've expanded gaming, which was my original proposal."

Rendell was invited to respond after Swann leveled the charge Saturday at a meeting of the Republican State Committee, which endorsed him for the GOP nomination, and during a taped interview with ABC News that aired Sunday.

The former Pittsburgh Steelers star, who has been vague about his own approach to the property-tax issue, faces opposition in the May 16 primary from retired business advocate Jim Panyard, but is widely viewed as the front-runner.

"Ed Rendell told Pennsylvania in 2002, the first thing he was going to do was resolve property tax in Pennsylvania," Swann said on ABC's "This Week" show. "Now, we're in the last year of his first term. The property-tax issue has not been resolved. He has not done one thing to reduce property tax or fix a system that doesn't work."

"He's still talking about it," Swann told the state committee. "Nothing's been done."

In fact, the Legislature approved a comprehensive property tax-cutting law — Act 72 — at the same time it legalized slots in July 2004, with the understanding that it would be financed by tax revenue from the new gambling. It also gave local voters the power to block most future property-tax increases that exceeded inflation.

However, at the insistence of lawmakers worried about eroding local control over schools, the law essentially gave school boards the power to veto Act 72 in their districts. Most of the boards did reject the program, leaving the state with no way to distribute the slots money.

"Had we not done Act 72 with the local option, we would have had property-tax relief passed on the books a long time ago," said Rendell.

To focus legislative attention on the problem, Rendell called the Legislature into a special session on property taxes in September. The special session continues intermittently, as lawmakers haggle over the details of something to replace Act 72.

Rendell said he would sign a measure, passed by the Senate and pending in the House, that would distribute the slots money and provide at least $250 million more to expand the state's property-tax and rent rebate program for low-income senior citizens. The bill also includes the local referendum requirement for future tax increases that exceed inflation.

But many House members want to go further, providing even deeper property-tax cuts that would be offset by increases in the sales or income taxes, and no quick resolution is assured.

No slots parlors have been licensed yet. The Pennsylvania Gaming Control Board is reviewing 22 applications for the 14 slots licenses that the law authorized.

Asked whether he thinks House GOP leaders want to prolong the debate for political reasons, Rendell said that "it's always a possibility" but does not believe it is true.

"I still believe the vast majority of the members of this Legislature want to do the right thing and they want to give people property-tax relief," he said. "I think that the will is there to get something done."

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