HARRISBURG -- Gov. Ed Rendell's administration received a cool reception from Republicans yesterday when he took the first step toward legalizing video poker in bars as a way to raise up to $550 million for college students in the state.

"We have an immediate need for tuition relief for college students," Kathleen Shaw, a deputy secretary of education, told a House panel during the initial public hearing on the legislation. "Incredible educational benefits would come to our state if the Tuition Relief Act is passed."

She said many families are racking up debt of $40,000 or more to meet the rising costs of college, and the state needs to help them.

But critics, such as Rep. Curt Schroder, R-Chester, attacked the proposal, which would put up to 70,000 video poker machines in 14,000 bars and clubs around the state that have state liquor licenses.

"Video poker is one of the most addictive forms of gambling," he said. "It will be destructive of our neighborhoods by turning thousands of bars and restaurants into mini-casinos."

Stephen Drachler, executive director of A United Methodist Witness, also was critical, saying video poker "is the crack cocaine of gambling. It is a bad bet for Pennsylvania."

Mr. Schroder said the slots casinos in the state "will certainly demand their $50 million license fees back" if the Legislature permits competition from thousands of bars, each of which could have five video lottery gambling devices.

Other criticism centered on the limits of the tuition relief plan. It would apply to students at the state's 14 community colleges and the 14 schools in the State System of Higher Education, but not state-related schools such as the University of Pittsburgh and Penn State University or to private universities.

Dr. Shaw said the amount of funding limits how many colleges the plan can include.

Once the tuition relief plan is fully implemented, it's estimated there would be $550 million in new tax revenue produced from video lottery terminals, as the administration calls them. To fund students at all colleges in Pennsylvania, $2 billion would be needed.

Under the current plan, the tuition relief would be limited to students from families earning no more than $100,000 a year. Some legislators said that limit should be raised to help more students.

The hearing was held by the House Gaming Oversight Committee, led by Rep. Dante Santoni, D-Berks, who introduced the governor's bill.

There will be more hearings, including one in Western Pennsylvania, before the committee votes.