HARRISBURG, Pa. - Gov. Ed Rendell plans to sign a pair of bills today that will legalize slot machine gambling to finance $1 billion a year in property-tax reductions for homeowners across the state.

The bills authorize up to 61,000 slot machines at 14 sites - more slots than any other state except Nevada grants. Most of the resulting tax revenue would be used to cut local property taxes by an average 20 percent.

Following the Senate's lead, the House early Sunday approved the slots bill 113-88 following an 8½-hour debate. The property tax bill passed 164-37 after much less discussion.

Rendell, a Democrat who had made slots-for-tax-relief the centerpiece of his 2002 election campaign, celebrated with leaders of both parties, who compromised to make the legislation possible.

"A good example of government working for the people," Rendell said in a news conference in the Capitol Rotunda shortly before dawn.

Opponents of the slots bill, who made most of the floor speeches, predicted a proliferation of crime, addiction and other social ills. They complained that the bill was crafted in secret by a handful of party leaders and lacks adequate safeguards against corruption and conflicts of interest among members of the state panel that would oversee the proposed 14 slots parlors.

"This really scares me, and it ought to scare you," said Rep. Kerry Benninghoff, R-Centre.

Rep. Daryl Metcalfe, R-12th, called the legislation "Machiavellian" and "extremely flawed." He said it would spawn increases in crime, bankruptcies, divorce and child abuse.

"Our new revenue could easily be zeroed out" by the costs of coping with those problems, he said.

House Minority Leader H. William DeWeese accused the bill's critics of "demagoguing" in an attempt to kill the measure.

"We are at the threshold of a historic moment," said DeWeese, D-Greene.

A new gambling commission with broad powers would issue slots licenses to racetracks, resorts and other sites for fees ranging up to $50 million apiece.

The bill would make Pennsylvania the 18th state to legalize slot-machine gambling, not counting casinos run by American Indian tribes, according to the American Gaming Association.

Of the roughly $3 billion a year slots are expected to generate, the licensees would keep 48 percent, the state would get 34 percent and the rest would be divided among the equine industry, public construction projects, and counties and municipalities in which slots parlors are located.

Proponents said the bill would enable the state to recapture much of the money Pennsylvanians currently pour into slot machines in neighboring states and help revive the state's horse racing industry.

The property-tax reduction will not be immediate. Officials say the initial relief would be deferred until at least 2006 to allow time for the slots parlors to obtain licenses and gear up.

Ultimately, state taxes on slots are expected to generate $1 billion a year for reducing property taxes in all but one of the state's 501 school districts. In Philadelphia, there would be reductions in the city's wage tax.

Districts will be awarded a share of the money based on a formula that looks at its wealth, student enrollment and other factors. Each district's share will be evenly divided among homeowners who apply for "homestead exclusions" that would be used to reduce their tax bills.

To take advantage of the reduced property taxes, school boards will be required to increase local income taxes by 0.1 percent.