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Assembly proposal would slash taxes totaling $2.4 billion

Tax cuts, this year's chief theme as state lawmakers face elections, will total $2.4 billion under a plan floated Friday by the Democratic-controlled Assembly.

Though targeted in different ways, the plan joins the multibillion-dollar tax cut efforts already advanced by Republican Gov. George E. Pataki and Senate Republicans.

The latest proposal comes as the Senate and Assembly are set to begin passing their own versions of the state budget next week as a precursor to negotiations to get an on-time budget by March 31.

Significant in the Assembly plan is its rejection of an effort by Pataki and Senate Republicans to provide an education tax credit that would help parents pay various school-related costs, including tuition at parochial schools.

Instead, the Assembly plan would give families a tax credit of $300 for every child in the household up to 17 years old. The $300 credit would phase out for households with incomes of more than $110,000 a year.

Assembly Democrats pitched their alternative as fairer to more parents.

"All parents throughout the state face financial challenges associated with raising their children. Our proposal responds to that challenge, allowing parents to use the extra savings on anything from diapers and safety gates to education resources and piano lessons," Assembly Speaker Sheldon Silver, D-Manhattan, said.

The education tax credit has a variety of powerful special interests on both sides.

Teacher unions and others oppose it, saying the state needs to first pump more money into education before tax relief, while the Catholic Church and private schools support it, saying parents of their students deserve the tax break.

The governor proposed a $500 education tax credit but only to parents with children in about 80 school districts across the state and for those making under $75,000.

The Assembly also proposed a $900 million property tax relief package for those who pay a disproportionate amount of property tax or rent in relation to their income. The plan would give a credit -- from $200 to $400 -- equal to the amount of property taxes paid that exceeds 7.5 percent of their income.

The package would also eliminate the state's marriage penalty tax and the sales tax on clothing purchases under $110.

The Senate and Assembly were rushing to meet a midnight deadline Friday to introduce thousands of pages of their own budget bills that would allow them to begin passing the measures on Monday.

The two houses would release no information about how much their plans would cost, how much they would provide for education and how much of the governor's proposed $1 billion in health care cuts would be rejected.


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