The housing legislation that the Senate may vote on this week contains a property deduction similar to one found in the House version of the bill. The provision would allow homeowners who do not itemize their taxes to deduct a fixed amount from their taxes -- $500 for individuals and $1,000 for couples. Senate Minority Whip John Kyl (R-AZ), however, has inserted language into the bill that would prohibit non-itemizers from using this deduction if they live in locality that raised property taxes from the time of the law's enactment until the end of the year. As the Center on Budget illustrates, this is just a finger in the eye to state and local governments. In both the short and the long run, [Kyl's language] is likely to impede efforts of localities to provide an adequate level of services for their residents, including schools, public safety, roads, libraries, parks, and social services. Moreover, it is an unwarranted and unprecedented intrusion by the federal government into policies that always have been left to the states to determine. But there's also a chance the legislation's property tax increase penalty could extend beyond Dec. 31, 2008. History suggests, however, that once a deduction is included in the tax code for one year, there is a high probability it will become an "extender" that is renewed every year. Examples include the deduction for state and local sales tax, the deduction for qualified tuition expenses, and the deduction for teacher classroom expenses, as well as a host of business-oriented deductions and credits. If this type of restriction on local property tax revenue were continued for several years, it would fundamentally alter the nature of state and local finance in the country and represent a basic change in the principles of federalism. National Education Association lobbyist Alfred Campos describes the provision a little more succinctly ($). This is all hooey...This is going to severely hamper the ability for state and local governments to address looming education shortfalls...