HARRISBURG -- A trio of Republican lawmakers yesterday proposed a three-part plan to cap government spending and reduce taxes.

The Taxpayer Protection Package would reduce the personal income tax from 3.07 percent to 2.8 percent by next January, require referendums for almost all school and municipal tax increases and limit state budget increases.

"The people of Pennsylvania work very hard for their wages, and they deserve to keep more of their paychecks," said state Rep. Tom Quigley, R-Montgomery, who stumped for the package yesterday with Rep. Daryl Metcalfe, R-Cranberry, and Todd Rock, R-Franklin.

Democrats faulted the proposal, saying the income tax reduction would leave an $810 million hole in the budget and that arbitrary spending caps are unreasonable because financial needs change.

"It's easy to say, 'I'm going to cut taxes.' It's harder to identify $810 million worth of program cuts," said Rep. David Levdansky, D-Forward.

Proposals similar to the Taxpayer Protection Package have been considered before.

Act 1, which limited school spending, passed last session, but Mr. Metcalfe said it has been ineffective.

The act limits annual budget increases to an inflationary index that varies by school district. Districts can apply for exceptions for special expenditures, like construction. This year, 210 of the state's 501 districts applied for exceptions and all of their requests were granted, Mr. Metcalfe said.

"Voters in those districts still have absolutely no say about whether their taxes go up," Mr. Metcalfe said. "Act 1 has proven to be what so many predicted, referendum in name only."

The Republican group's proposal would require voter approval for all municipal and school tax increases with few exceptions for emergency, health or safety reasons.

Mr. Metcalfe, Mr. Quigley and Mr. Rock also want a constitutional amendment to cap state spending. Increases would be limited to the rate of inflation plus the rate of population growth.

Democrats say the spending caps are arbitrary, harmful and a way for lawmakers to avoid making tough decisions about taxing and spending.

Governments need flexibility to make investments that will save money in the long run, Mr. Levdansky said.

Gov. Ed Rendell "wants to spend money on early childhood education. That's going to result in more spending in the short term, but will help hold down education costs in the long run," he said. "If you arbitrarily tie spending to inflation, you're not going to have any discretion and that's not very good budget planning."