HARRISBURG - - Ignoring facts that show their plan simply would not work alone and ignoring an amendment proposed by Democratic Leader Robert J. Mellow, Senate Republicans voted this week to pass Senate Bill 100.

               Republicans claim the measure would reduce property taxes by letting local voters decide through a referendum whether to exchange property tax cuts for increases in the earned income tax. Unlike the state income tax, the earned income tax does not include investment earnings.

               Calling Senate Bill 100 “a clone” to Act 50 passed in 1998, Mellow said that neither proposal offers residents real property tax relief. Under Act 50, school districts were given the option to increase local income taxes to offset reductions in property taxes and eliminate “nuisance taxes” through a voters’ referendum.

Under Act 50, only four school districts actually chose to use the option. Similarly, Senate Bill 100 would exclude certain school districts (Philadelphia, Pittsburgh, distressed and state-empowered school districts) from receiving any relief, estimating that about 544,000 of 3.4 million state households would not see tax cuts under the Republican plan.

             Mellow’s amendment, modeled after Gov. Ed Rendell’s Plan for a New Pennsylvania, would have provided homeowners with $1.5 billion in property tax cuts by increasing the personal income tax and using revenue from slot machines at race tracks. Then, voters could decide in November, as provided in Senate Bill 100, whether they wanted more property tax cuts through local wage tax increases.

            The Mellow amendment failed in a party line vote (28-21) and Senate Bill 100 passed 27-22.

The measure now goes to the House -- under the threat of a veto from Gov. Rendell if the House rubber-stamps the Senate version.

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            In a party line 28 to 21 vote, the Senate amended and approved House Bill 113, which would provide $4.2 billion to school districts for the fiscal 2003-2004 school year -- a 2.8 percent increase.

            Democrats, predicting a veto from Gov. Ed Rendell, noted that the legislation left out all of the governor’s proposed education reforms.

            The bill was amended to abolish the costly and controversial statewide teacher testing program that begun under former Gov. Tom Ridge.

            During debate on the measure, Republicans hid behind procedural maneuvers to table Democratic amendments that would have exempted senior citizens from future property tax hikes; and all but forcing the legislature to act on tax reform by December 31, 2003.

            The bill now returns to the House.

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             By 27-22 vote, the Senate approved House Bill 623, which would permit up to 5,000 slot machines at the state’s horse racing tracks.

             Under the bill, track owners would pay a $50 million licensing fee, and receive 46 percent of slot revenue. The state would receive a daily 36 percent share.

             The slots proceeds would also provide $25 million annually for volunteer fire departments.

Gov. Ed Rendell, who estimated that the state could eventually reap up to $800 million annually in slots revenue, has proposed using the funds to lower property taxes and enhance education in public schools.

Those arguing in support of the bill said it would preserve Pennsylvania’s 35,000 horse racing-related jobs, bring in 15,000 new jobs, and keep home a share of gambling proceeds that have been flowing into neighboring states for years. It is estimated that Pennsylvanians spend over $3 billion every year on legalized gambling in neighboring New Jersey, Delaware and West Virginia.

To allay fears of increased gambling addiction, the bill would set up strict regulatory controls at the tracks, earmark $1.5 million annually for gambling addiction programs, and limit the use of automatic teller machines and credit cards at the tracks.

The measure now returns to the House.

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            Senate Bill 10, an economic stimulus package, known as the Economic Enhancement Act, unanimously passed the Senate this week with hopes that it would provide the catalyst for an economic turnaround.

            Under the measure, the act would operate through a newly created Economic Enhancement Financing Authority to stimulate economic growth in targeted distressed areas throughout Pennsylvania.

            Under the bill, the governor would designate deteriorated properties as tax incentive districts for a period of not more than 20 years. Once a tax incentive district is approved by its municipality, persons owning property located within the district would be eligible to receive grants and loans for qualified projects.

            Projects eligible for financing include those that: increase and diversify the manufacturing base, aid in the expansion of existing private companies, attract new industries and new products, promote environmental abatement, remediation and disposal of pollutants.

Senate Bill 10 now goes to the House.

            The bill would create Keystone Innovation Zones (KIZ) within a five-mile radius of colleges and universities. A public or private institution would be eligible within the Commonwealth, provided that it has been certified as an institute of higher learning by the Department of Education.

            The legislation is modeled after similar bills that created Keystone Opportunity Zones and Keystone Opportunity Expansion Zones.

            KIZ’s provide a joint business partnership with colleges and universities within the state giving qualified employers grants to begin their business as long as certain requirements are met. One requirement includes providing employment opportunities.

           Keystone Innovation Zones would be eligible for the same tax abatement periods and tax exemptions available to Keystone Opportunity Zones and Expansion Zones.

           Senate Bill 778 now goes to the House for consideration.