HARRISBURG -- The state Legislature opened its special session on property taxes yesterday, with Gov. Ed Rendell launching an all-out effort to force every Pennsylvania school district to take part in a tax relief program funded by slot machine revenue.

Carolyn Kaster, Associated Press Gov. Ed Rendell addresses a joint session of the state legislature in a special session yesterday on property-tax cuts. Behind Rendell are Speaker of the House John Perzel, left, and Lt. Gov. Catherine Baker Knoll. Click photo for larger image. An ally for the governor    HARRISBURG -- Gov. Ed Rendell has a lot of supporters for his idea to trim property taxes, but he doesn't have too many actual cheerleaders.    Yesterday, however, he did have Lottie Hoskey, a retired West Penn Hospital worker and a community activist from Pittsburgh's Hill District.    The gray-haired, "70-something" woman stood in the governor's reception room, before 100 or more senior citizens and homeowners from around the state, and led cheers for Rendell.    "Hey hey, ho ho, property taxes have to go," she shouted with a smile. "The governor has a wonderful plan and people should get behind it."    Hoskey attended the event at the invitation of Rep. Jake Wheatley, D-Hill District, one of many legislators she's been pushing to reduce her property taxes.    "After years and years of paying property taxes, I'm looking forward to some relief," she said. Online graphic See a chart of goods and services that are taxed and not taxed

His chances for eventual success over several competing tax plans seem good, though the battle likely will drag on into next year, rather than wrap up by the end of 2005 as he would like.

Rendell said his goal of giving tax relief to all property owners in the state "was undermined by the disturbing fact that only 111 of our 501 school districts now qualify to receive state [slot machine] funds to reduce taxes on their homeowners. That's not fair."

Before he can declare victory, Rendell will have to overcome at least three other tax-relief plans, all of which are based on increasing revenue from existing taxes.

A House Republican group called the Commonwealth Caucus wants to lower the statewide 6 percent sales tax to 5 percent, but extend it to include food, clothing and many services now exempted.

State Sen. Jeffrey Piccola, R-Dauphin, who plans to run against Rendell for governor in 2006, has a similar plan, lowering the sales tax to 5.7 percent but also extending it to food and clothing.

Rendell's bill, called House Bill 1 of the special session, took a step forward yesterday after his speech to a joint session of the House and Senate. The House Appropriations Committee reported it out to the House floor, a step toward putting the matter up for a vote.

House Democratic leaders said they would begin rounding up most of their 93 members to back the governor's plan, but they also will need a dozen or so votes from the Republicans, who control the chamber with 110 representatives.

State Rep. Mike Veon, D-Beaver Falls, said competing tax relief plans based on the sales tax or income tax "have been debated for the 21 years I've been in the Legislature. But in the end there won't be the votes for such alternative sources of revenue for property tax cuts."

It will take at least 102 votes to approve a bill in the House.

Rep. John Maher, R-Upper St. Clair, an Appropriations Committee member, voted yesterday to send the bill to the House floor but said he doesn't support it as now written. He contends it doesn't provide enough tax relief to school districts in Allegheny County.

Under the current distribution formula, Maher said, those districts would get an average of only $146 per homeowner in relief during the first year of slots, which will be 2007.

Once 14 casinos are up and fully running by 2008, Rendell is predicting $1 billion will result statewide, with an average property tax cut of about $330 per homeowner statewide.

Rendell's plan likely will face a stiffer challenge in the Senate.

"I don't believe there is strong support to mandate that all school districts take part in Act 72," said Senate President Pro Tem Robert Jubelirer, R-Altoona.

Piccola criticized Rendell's plan to change Act 72, calling it "a failed idea. School districts have rejected it, yet he's holding up false hopes of using it to lower property taxes."

There's another tax relief plan being floated -- to raise the personal income tax rate, now at 3.07 percent, to 4.07 percent or more. Each 1 percent increase would raise about $300 million that could be used to reduce property taxes.

But lawmakers still are feeling heat from their vote to raise the income tax rate to 3.07 percent (from 2.8 percent) in January 2004, so a further increase seems unlikely.

Rendell is angry that 390 school districts refused to accept slots revenue to use in lowering property taxes.

They didn't like an Act 72 provision for a "back-end referendum," meaning that if a district takes part, voters can reject any future tax increase that exceeds the rate of inflation. Rendell said that provision must remain.

Sen. Wayne Fontana, D-Brookline, said he'll push the Rendell plan in the Senate. "We need to act on it quickly, by the end of the year," he said.

Some Democrats want to tinker with Rendell's bill. Sen. Robert Mellow, D-Lackawanna, would leave it up to the voters of each school district whether to take part in the slots-funded tax relief program, rather than having the state mandate participation.

Rendell may be open to a compromise on that point, if it means getting the tax relief plan through the Senate.

Rendell wants to lower property taxes both to boost his chances for re-election next year and to make good on a 2002 campaign promise, so far unfilled, to legalize slot machines and lower property taxes.

The Commonwealth Caucus in the House contends its plan would raise up to $10 billion by extending the sales tax to food, clothing and professional services like attorneys, accountants, architects, construction and college tuitions, as well as items like caskets, newspapers, home heating oil and electricity.

The GOP group said it's aiming to eliminate school property taxes, not just make a dent in them, as Rendell's plan would do. Piccola thinks his plan would generate $8 billion to reduce or eliminate school property taxes.

But as much as lawmakers want to please constituents by reducing property taxes, it would take a lot of political courage to slap the sales tax on food and clothing, which many critics denounce as a regressive move that hurts poorer people.

Besides, Rendell has said he won't go along with taxing food and clothing, which means the House and Senate would have override a veto, and the votes aren't there to do that.

A fourth possibility always remains -- that of doing nothing, as happened three years ago, when then-Gov. Mark Schweiker called a special session on property tax reductions and no legislation was passed.

"I've been around here for 30 years and a lot of governors have been burned by this issue," said Jubelirer.