ALBANY – The pieces are starting to fall into place for agreements on two of the most contentious education issues confronting New York City and state government.

A middle ground between Republican and Democratic lawmakers is beginning to take shape on both private school tuition tax credits and on what is considered to be an acceptable amount of state aid to the New York City public school system, two highly politicized issues that have grown increasingly connected in recent weeks.

To be sure, the final state budget won’t be worked out until at least the end of the month and negotiations between lawmakers and the governor are far from winding down. But with lawmakers projecting that the state will have $750 million more to spend than previously estimated by the governor, obstacles to deals on tuition tax credits and city schools funding appear to be crumbling.

The end result could be a smaller and more thinly spread-out version of the governor’s proposed tax credit program, and a capital spending plan for New York City public schools that would meet Mayor Bloomberg’s demands.

“The ingredients are there for a compromise, which would give the city the win-win that it needs,” said Senator Martin Golden, a Republican of Brooklyn who, as one of four Republican senators in the city, has acted as a broker between the mayor and the Senate majority leader, Joseph Bruno.

“All the parties seem to be moving toward a broad agreement,” said Thomas Carroll, president of the Foundation for Education Reform and Accountability, a group based in Albany that advocates for school choice.

This year’s budget talks aren’t likely to resolve entirely the Campaign for Fiscal Equity lawsuit, a protracted legal dispute over how much money the state owes city schools to ensure that students are educated to constitutionally mandated standards. But Republican lawmakers are looking to reach a deal with Assembly Democrats and the governor on spending that would satisfy the most immediate demands coming from the Assembly speaker, Sheldon Silver, and Mr. Bloomberg. Such a deal would likely put off any final agreement on the schools funding lawsuit until next year, after Governor Pataki leaves office.

Mr. Golden said Senate Republicans are leaning toward supporting a one year capital plan for city schools that would total around $1.8 billion. Financed by state bonds, the plan would cost the state about $200 million in interest in the upcoming fiscal year. The figure of $1.8 billion is the same amount that Mr. Bloomberg has said the state ought to contribute this year to the Department of Education’s capital plan.

It also happens to be same amount of capital money that a state Supreme Court Justice, Leland DeGrasse, has ordered the state to pay each year for half a decade so that city schools are able to provide a “sound basic” education. The judge’s ruling, which also ordered the state to give the city an extra $14 billion over four years in operational aid, has been appealed by the governor.

Senate support for a capital plan is gaining among Senate Republicans as Mr. Bloomberg is showing signs of backing away, at least for the time being, on his demand that the state comply with Judge DeGrasse’s ruling. In a radio interview on WABC on Thursday, the mayor said his most immediate concern was getting more capital money from the state and said the lawsuit and his demands that the state share the burden of the Department of Education’s capital plan were two separate issues.

He predicted that the decision of the intermediate appeals court, which is expected to rule in favor of the state, would be appealed to the Court of Appeals, the highest court. “And who knows after that. That will be in the courts for awhile. And I don’t think it’s worth everybody talking about because it’s going to, it doesn’t help the kids today. And that’s what I’ve got to focus on.”

A Senate capital plan would also allow the city to reverse its intention of scrapping 21 school construction projects, some of which are located in Republican Senate districts. If those schools aren’t built, Republican senators in New York City could be punished by voters in November, an outcome that the Senate leadership wants to avoid.

While the Senate may agree to use part of the multi-billion-dollar budget surplus to increase state spending for school operations, the additional amount is expected to be far lower than what Judge DeGrasse has ordered. Still, Senate Republicans are hoping that by agreeing to a capital plan for city schools, they will be able to push Mr. Silver over the fence on the issue of tuition tax credits.

Mr. Silver has repeatedly linked the tuition tax credits with compliance with the Campaign for Fiscal Equity lawsuit, arguing that the state should make sure it’s adequately supporting public schools before it assists parents to send their children to private schools.

An Orthodox Jew who represents a district in Lower Manhattan, Mr. Silver has said he is “sympathetic” to parents of children attending parochial schools, and the tax credit plan put forward by the governor has won support among Assembly Democrats representing low-income neighborhoods and Catholic and Jewish communities. Proponents of school choice have also championed the tax credit plan.

Mr. Silver, however, is feeling pressure in other direction from the public school teachers’ unions, among Albany’s most potent interest groups, which strongly oppose the governor’s proposal. The governor’s plan would give parents of public and private school children in certain struggling school districts up to $500 credits, which reduce tax liability dollar-for-dollar, to use toward tuition or tutoring. Teachers’ unions say they fear that tax credits, like tuition vouchers, would drain money away from public schools school districts and ultimately from teachers’ salaries.

The president of the United Federation of Teachers, Randi Weingarten, said yesterday that she believes the speaker is “moving away” from tuition tax credits. Calling the governor’s tax credit plan a “terrible proposal,” she said, “There are a lot of people in the Assembly who are very against it.”

The speaker has asked for assurance from Catholic leaders that the church wouldn’t use the tax credits as an opportunity to raise tuition and has gotten a commitment that they wouldn’t, according to sources.

Mr. Silver has also indicated that he wants any tax credit plan to be open to every school district, while Mr. Pataki’s plan limits the credits to parents who reside in a district that has at least one school that is failing according to federal standards. That demand is being met by the Senate, which last week came out with a $400 million tax credit plan that would be available to all school districts and would reduce the maximum per-student amount to $400 from $500.

A spokesman for the speaker’s office, Eileen Larrabee, said there was “a lot to be negotiated,” and a spokesman for Mr. Bruno’s office, John McArdle, said, “We haven’t completed our budget. It’s premature to say anything.”

An increase in the number of charter schools in the state – now limited to 100 – is also on the table. That issue may be resolved in exchange for increases in state school aid to Buffalo and Albany.