HARRISBURG -- State Sen. Jim Ferlo wants to postpone by seven months the deadline for school districts to decide whether to participate in a new property-tax reduction program funded by slot machine revenue.

The governor, however, is against any postponements.

Ferlo, D-Highland Park, is sponsoring a bill that would give school boards more time to deal with the confusing and politically challenging issue. His move comes as many districts across the state are still uncertain about whether to participate.

The program, known as Act 72, will use slot machine gambling revenue to pay for property tax cuts. Under the current law, signed by Gov. Ed Rendell last summer, school districts must decide by May 30 whether to opt in or out of the program. Ferlo's proposal would push the date back to Dec. 31.

Many districts still are deliberating because the gambling revenue windfall -- which Rendell thinks will amount to $1 billion statewide -- comes with strings attached. First, districts must agree to increase their earned income tax by 0.1 percent to get the money.

Second -- but, in the schools' eyes, most worrisome -- school boards also must agree to subject proposed property tax increases to a voter referendum. The public vote would be required, with a few exceptions, if a proposed increase in a school budget is above the inflation rate.

There are still more red flags. A national credit rating agency says it may downgrade by "one notch" the credit rating of any district that decides to opt into the Act 72 program.

Lowering a school district's credit rating makes it more expensive to borrow money through bond sales, a common borrowing technique, according to Moody's Investors Service.

Moody's is issuing the warning because of the referendum clause. Putting a budget up for a public vote could tie a school district's hands when it comes to borrowing, giving voters a new type of veto power over a school budget.

"The uncertainty of gaining such approval [from voters] will prevent participating school districts from pledging their unlimited taxing power to secure general obligation debt," Moody's said. But Moody's also said it would "examine each school district's credit factors" to determine if the district should be exempt from the downgrade.

Standard & Poor's, another rating agency, is monitoring the situation in Pennsylvania but does not anticipate issuing a blanket statement about Act 72. Rather, it will assess individual districts once they have decided whether to participate.

Already, one Western Pennsylvania school district, Mars Area, is planning to petition the Supreme Court to extend the May 30 deadline for school boards to decide. Other school districts are pensive about the deal, and at least 80 say they are probably going to opt out of enrollment.

"Because this new law is so complicated, I believe homeowners have been slow to lobby their school board members," Ferlo said. So far, only four school districts statewide, including Charleroi and Gateway, have opted into the program.

A report released yesterday by the Pennsylvania School Boards Association said that of the 244 boards to respond to the association's survey, about one-third are leaning against participating in the program. Another 81 districts are likely to enroll, according to the survey, and 77 districts are undecided.

There are 501 school districts in the state.

"What this reinforces most definitely is that school districts are being very deliberate and very thoughtful on how they approach" the property tax program, PSBA spokesman Scott Shewell said. "They're looking very hard at all of the issues that come with this law."