HARRISBURG -- Pennsylvania businesses won a skirmish over tax-reduction measures yesterday, but the battle has a long way to go.

The state House Finance Committee, which is controlled by Republicans, voted along party lines for bills that would reduce two key business taxes -- the corporate net income tax and the corporate stock and franchise tax -- faster than Democratic Gov. Ed Rendell wants to.

Democrats on the committee complained that the reductions would cost the state more than $900 million in 2005-06, and charged that Republicans were irresponsible for not suggesting spending cuts to make up for the lost revenue.

The first measure, introduced by Rep. Mark Mustio, R-Moon, would reduce the stock and franchise tax by 3 mills in 2006 -- compared with a reduction of 1 mill proposed by Rendell in his 2005-06 budget message.

Also, Mustio would accelerate total elimination of that tax by two years -- ending it entirely by Jan. 1, 2009, compared with the current schedule phasing it out by Jan. 1, 2011.

The committee approved the 3-mill cut despite a warning from state Revenue Secretary Gregory Fajt, a Rendell appointee, that it would cost the state $621 million for the 2005-06 budget year, which starts July 1.

Republicans also approved a bill to lower the corporate net income tax to 6.99 percent instead of the 7.99 percent Rendell favors. It's currently at 9.99 percent, one of the highest rates in the nation. Fajt warned that tax cut would cost the state another $288 million next year.

Committee Democrats, including Reps. David Levdansky of Forward, Dan Frankel of Squirrel Hill and John Pallone of New Kensington, said Mustio also should suggest ways of balancing the budget.

The GOP bills are "ridiculous, willy-nilly cutting of [state revenues] and not putting any money back to replace it,'' Pallone said. "This just saves more rich people more money.''

Frankel said that with state costs sharply increasing for Medicaid and other health assistance programs for low-income people, additional sources of revenue must be found.

Mustio said the state could use a projected budget surplus of about $400 million for the fiscal year ending June 30, or scrap Rendell's proposed $100 million program on workforce development, to cushion the loss of revenue.

Mustio and Rep. Mike Turzai, R-Bradford Woods, said that reducing business taxes helps companies increase their business, create new jobs and hire new workers, thus generating additional tax revenue for the state.

And it's not just big corporations that would be helped by the business tax cuts, said Rep. Daryl Metcalfe, R-Cranberry.

"These measures will help small business create jobs -- it's not just something for the rich,'' he said.

The two tax-cut bills now move to the GOP-controlled Appropriations Committee for further debate, and then on to the full House and Senate. Rendell could veto them if he thinks they would cost the state too much money.