Paterson Fails To Win Over McCall on Tax Cap

While Governor Paterson has been able to convince Senate Republicans of the benefits of a property tax cap, he's had no such luck with one of his closest political allies.

The Democratic Party's nominee for governor in 2002, H. Carl McCall, who has known Mr. Paterson since the latter was a teenager, said he has strong reservations about the governor's high-profile plan to cap local property taxes around the state.

"I don't think it's a way to solve the problem," Mr. McCall said in an interview, during which he praised Mr. Paterson as a "decisive" governor.

Mr. McCall, a former two-term state comptroller and a former state Senator who occupied the same Harlem seat that Mr. Paterson represented when he was a legislator, said he was concerned that the governor's plan to limit how much districts can tax property would put a strain on school budgets.

"It will, in some places, drastically reduce the amount of money available for schools," he said. "Where is Albany going to get the money?"

He said a better alternative would be to raise school revenue through the state income tax.

Mr. Paterson has been trying to persuade legislators to get behind his plan to prohibit districts from increasing annual property tax levies by more than 4% a year. Over the last decade, the taxes have been raised by about 6% a year.

Assembly Democrats are adamantly opposed to his proposal for the same reason cited by Mr. McCall, while Senate Republicans say they may pass a version of the governor's tax-cap legislation as early as Monday, the scheduled last day of session.

As they wrap up their negotiations, lawmakers and the governor, meanwhile, came to an agreement on other legislation.

Mr. Paterson yesterday announced a deal on a bill inspired by the subprime mortgage crisis that would, among other things, protect borrowers by requiring lenders to send notices to homeowners at least 90 days before starting foreclosure proceedings, a process that already takes more than a year in New York.

The agreement would also create a duty of care for mortgage brokers, who would be responsible for ensuring that their customers are able to repay loans.

The legislation, which faced resistance from the banking industry, comes amid a Justice Department crackdown on mortgage fraud. Federal law enforcement officials announced yesterday that they have indicted more than 400 housing developers, lenders, brokers, and other alleged violators in their Operation Malicious Mortgage sweep, which began in March.

Mr. Paterson announced the deal before flying to Chicago, where he is scheduled to participate in an economic roundtable with the presumptive Democratic presidential nominee, Barack Obama, and other governors.

At the urging of Mayor Bloomberg and the New York City Council, lawmakers also passed a bill that will allow traffic enforcement agents in New York City, not just police officers, to issue tickets to motorists who "block the box" by getting their vehicles stuck in the middle of an intersection after the traffic light turns red.

Lawmakers also raised the fine to $110.