Senate Backing, Silver Blocking Property Tax Cap

State Senate Republicans say they will return to Albany next month to pass Governor Paterson's proposal to cap local school property taxes.

Legislative momentum behind the plan, which would cap annual growth in school district tax levies at between 3% and 4%, stops at the Assembly chamber's door.

Assembly Democrats, who are closely aligned with the plan's most powerful critic, the state's largest teachers union, are indicating they won't follow the Senate's lead in passing the measure.

"I think it's critically important that we send the message that we are serious about controlling property taxes," the Republican majority leader, Dean Skelos, said yesterday, declaring unreserved support for Mr. Paterson's tax cap for the first time.

The divide between Mr. Skelos and the Assembly speaker, Sheldon Silver, over the governor's plan appeared to be as wide as ever after the three leaders emerged from a meeting at the governor's mansion yesterday, their first sit-down talks since the Long Island Republican succeeded Joseph Bruno as majority leader last month.

Mr. Silver said he feared that by limiting the amount that districts outside New York City can tax, Albany would be leaving schools dangerously short on cash, despite the record amount of state aid that has flowed to public schools in the last two years.

The speaker instead sought to cast the spotlight on an unrelated issue, saying he was most concerned about the rise of home heating oil, which has increased in price by 75% over the past year. He called on the governor to endorse an Assembly bill that would expand heating oil subsidies to greater numbers of lower-income families.

Mr. Silver said state residents this winter would be forced to decide between "freezing to death or starving to death" unless New York helps them pay for heating oil.

Mr. Skelos said he had a different perspective. At the press conference yesterday, he said homeowners must first be able to afford their houses before worrying about heating them. "You have to have the house first," he said.

With a crucial election season approaching, Senate Republicans have warmed to the idea of a tax cap, which polls have shown has strong support among voters, even at the expense of alienating New York State United Teachers, which historically has bestowed money and endorsements on Republican Senate candidates.

The Senate's cooperation with the governor on his tax plan follows Mr. Paterson's decision to move quickly on brokering a deal with IBM, which agreed to expand its nanotechnology operations in the Albany area and build a new computer chip packaging center in exchange for $140 million in state aid.

With IBM promising to add 1,000 jobs to the state workforce, Albany is spending about $140,000 a job, a ratio that is unusually high for state economic development investments.

Mr. Bruno, who had resisted the idea of tax cap, had pushed hard for an IBM agreement, which was announced by the Paterson administration three days before he retired from the Senate.